Moneycontrol PRO
Open App

Indian coffee to shake off colonial hangover

The current session of Parliament will take up the repeal of the Coffee Act of 1942, which was enacted in the middle of World War II, ostensibly to safeguard the industry from its effects.

July 24, 2022 / 07:11 AM IST
The real fillip to coffee in the country came post-2000, as more Indians developed a taste for the beverage and entrepreneurs like Amit Judge and V.G. Siddhartha picked up on this trend. (Illustration by Suneesh K)

The real fillip to coffee in the country came post-2000, as more Indians developed a taste for the beverage and entrepreneurs like Amit Judge and V.G. Siddhartha picked up on this trend. (Illustration by Suneesh K)

An unwanted legacy of the colonial era will hopefully be consigned to the pages of history soon, and the cup that cheers the nation will finally be completely Indian.

For the last 80 years, the business of coffee in the country has been under the purview of an archaic British era law. To correct that anomaly, the current session of Parliament will take up the repeal of the Coffee Act of 1942, which was enacted in the middle of the Second World War ostensibly to safeguard the industry from its effects.

The Act empowered the Coffee Board, set up in 1907, to control the production, marketing and sale of coffee in the domestic as well as international market. It required planters to pool their coffee produce with the Board, which had complete control over its price and marketing. The all-powerful board was even responsible for making payments out of a specially-created pool fund to registered growers.

While it might have served some purpose then, its continuation even after subsequent amendments, has been irrational. For the large part, it escaped attention given the relatively insignificant role that coffee played in India.

For most of this period, coffee remained a drink for just a small minority. Tea, introduced to India by the British in the 19th century to counteract the monopoly of Chinese production, was the preferred beverage of millions of Indians. With good reason. Ever since the first plantations were set up in the Himalayan foothills around Darjeeling in the 1850s, India had become one of the major producers of tea. By 1860, more than 50 companies were producing tea in Eastern India and by 1928, the country was the leading producer of tea in the world. This also led to an increase in domestic consumption. From 10 million pounds in 1905, the Indian market size grew to 50 million pounds by the end of the 1920s.

Close

Strangely, coffee came to India much earlier, in the late 17th century. Legend has it that Baba Budan, an Indian pilgrim to Mecca, smuggled seven beans back to India from Yemen in 1670 at a time when it was illegal to take coffee seeds out of Arabia and planted them in the Chandragiri hills of Karnataka. In his honour today stands the Baba Budan Giri Hill Range or Chandra Drona Parvathais, home to the highest peak in Karnataka known as Mullayanagiri. Initially it was the Dutch who helped spread the cultivation of coffee across the country. Under British rule, some commercial coffee farming started but there was hardly any local market.

That happened when instant coffee came to the country. In 1963, 25 years after it began life in Switzerland as a soluble coffee powder, Nestle launched Nescafe in India. A few years after that, Brooke Bond, primarily a tea company, launched Bru Instant Coffee in the country. India’s first coffee- chicory mix instant coffee, it was the brainchild of the late T.S. Nagarajan, the former managing director of Brooke Bond.

But till the reforms of 1991, coffee growers sold their beans to the Coffee Board of India, which then auctioned the produce to buyers. Marketing was virtually non-existent and consumption was mostly inside homes.

The real fillip to coffee in the country, though, came post-2000, as a new generation of Indians developed a taste for the beverage. They were helped along by the many chains that spread the cult of coffee in the country, and increasingly coffee came to mean much more than just a warm drink. The cafes became a place to hang out, meet people, date and even conduct business. Entrepreneurs like Amit Judge who started the Barista chain and later V.G. Siddhartha who set up Café Coffee Day (CCD), spotted the changing taste of a new generation and grew the business exponentially. Today, another generation of entrepreneurs are pushing more specialty coffees through brands like Blue Tokai, Third Wave and Sleepy Owl.

The draft Coffee (Promotion and Development) Bill, 2022, then couldn’t have come a day too soon. With the idea and the need for pooling and marketing of coffee, the main thrust of the 1942 Act, becoming redundant, new legislation is sorely needed to position India as one of the top coffee producing and exporting countries in the world.
Sundeep Khanna is a senior journalist. Views are personal.
Sections
ISO 27001 - BSI Assurance Mark