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Tata Coffee’s Managing Director Hameed Huq on India’s industry.

From the February 2011 issue.

As the world watches the outcomes of Tata Coffee's supply and roasting deal with Starbucks, its Managing Director Hameed Huq talks off-shore expansion, a long-term vision and a sustainable business model not reliant on high prices.

Story by Jane O’Connor

India’s expanding coffee industry has, according to Tata Coffee’s Managing Director Hameed Huq, learned its key lessons from times of plenty. “In times of shortage, anything will sell.”

But if you consolidate the quality of production, then the expansion can begin. Huq says that Tata Coffee has reached that stage, where it’s not using its production output as a sole measure for success, but strategically upscaling and diversifying its business. The forward push and business expansion will be towards the “mature” markets, further building on strong market share in the United States and parts of Asia, capturing more of the Russian and eastern European territory – and other target countries, including Australia – with the soluble, freeze dried output.

The balancing act for Tata is to keep building its quality and then to maintain that standard while expanding yields and production. This involves a two-pronged approach. All of Tata’s Indian grown Arabica is shade grown on its southern plantations and to date more than 80 per cent of its income has been derived from export sales. This growing method has meant that yields are lower, but it produces a more succulent, high quality bean that is easier to process. The unblemished washed beans are the type of premium coffee that is not only most sought after, but also returns higher profit margins. Until recently, an insect pest has also played havoc with domestic organic production yields. But, Huq says, research has now come up with a solution and 40 year old trees are currently being replaced with intensive plantings of the new, hardier varieties.

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