Union Commerce and Industry Minister Piyush Goyal, in a recent meeting with Assam tea planters, emphasized the importance of quality production and strict compliance with Maximum Residue Limits (MRLs). He urged the Food Safety and Standards Authority of India (FSSAI) and state governments to enhance monitoring to ensure compliance.

The production decline is largely attributed to adverse weather conditions in Assam and West Bengal, which have impacted yields. Minister Goyal reiterated that no extensions would be granted for manufacturing beyond the mandated closure on November 30, 2024, except for gardens producing high-quality tea that meet the Tea Board’s exemption criteria.

To sustain prices and maintain market stability, Goyal stressed the need to manage oversupply. Additionally, the policy of routing 100% dust-grade tea through auctions will continue to ensure better compliance and traceability. The meeting revealed that dust-grade tea has performed well in terms of price realizations under this system.

Impact of Production Ceasefire and Future Outlook
With tea manufacturing ceasing from December 1, 2024, India’s overall production for the year is expected to fall short of last year’s figures. While domestic prices have surged recently, the earnings gains are offset by the significant crop decline.

Industry concerns were raised regarding a noticeable price drop during November sales compared to September across auction centres in North India, with prices dipping by Rs. 15-40 per kilogram.

The Indian Tea Association has called for measures to stabilize the market as the sector navigates the dual challenges of reduced output and fluctuating prices.

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Currently operating 457 stores across 70 cities as of the September quarter, the joint venture (JV) between TCPL and Starbucks Corporation is eyeing significant expansion, despite plans for moderate short-term store openings.

“We see a huge opportunity in the coffee business in India,” said Sunil D’Souza, MD & CEO of TCPL. “Starbucks has already established itself as the largest coffee chain in the country, but the market remains significantly under-penetrated compared to similar economies. Our intent to reach 1,000 outlets by FY28 remains firm.”

The company is also focusing on its vending business, Tata MyBistro, which caters primarily to institutional customers with a range of coffee, tea, and other beverages.

D’Souza emphasized the profitability of the Starbucks business model, noting that as the JV scales, profitability is expected to grow. “The store profitability is not an issue, and we are confident of generating sustainable profits as we expand,” he added.

This long-term target aligns with TCPL’s broader strategy to capitalize on India’s evolving coffee culture while tapping into the growing demand for premium beverage experiences.

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Key Findings

Home Brewing Growth:

·        80% of Americans now enjoy at least one cup of coffee at home daily, up by 10% since 2017.

·        The average annual spend on home coffee is $75. Drip coffee remains the most popular brewing method, favoured by 45% of home coffee drinkers.

·        The US dominates the coffee machine market, accounting for 29% ($3.7 billion in 2024), projected to exceed $4.3 billion by 2030.

Decline in Coffee Shop Sales:

·        While 51% of Americans still purchase coffee from shops weekly, only 8% do so daily.

·        Monthly coffee shop spending is modest, with 54% spending $20 or less, a trend likely to persist as coffee prices rise—up 23% over three years.

·        Starbucks reported declining sales in 2024, reflecting this shift.

Changing Preferences:

·        Top Choice: Cappuccino is the preferred coffee style, enjoyed by 55% of consumers.

·        Milky Options on the Rise: 77% favour coffee with milk or creamer, and alternative milks like oat (+90%) and almond (+71%) are gaining traction.

·        Black Coffee Decline: Consumption dropped from 74% in 2022 to 18% in 2024.

Generational Differences:

·        Daily coffee consumption decreases by generation: Baby Boomers (83%), Gen X (74%), Millennials (66%), and Gen Z (42%).

·        Iced coffee is particularly popular with Gen Z, with 85% expressing positive views.

Emerging Trends

1. Sustainability:

·        70% of consumers prioritize environmental friendliness when buying coffee.

·        47% actively seek fair trade options.

2. Cultural Influences:

·        South Korean-inspired Dalgona coffee has surged in popularity, driven by social media.

·        Espresso martinis have seen a 79% increase in consumption since 2022, now enjoyed by 1 in 4 Americans.

3. At-Home Experimentation:

·        The rise of home coffee brewing coincides with the growing interest in unique recipes and brewing techniques.

Coffee remains a beloved ritual for Americans, but its consumption is evolving. With younger generations embracing new coffee forms inspired by global trends and social media, and inflation driving the shift to home brewing, we anticipate continued innovation in home coffee-making. This evolution presents challenges and opportunities for coffee shops and chains, especially during the holiday sales season.

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CEO and co-founder Matt Chitharanjan revealed that Blue Tokai will focus on scaling operations in cities such as Hyderabad and Chennai to capitalize on India’s $300 million specialty tea and coffee café market. The company is backed by Belgian investment firm Verlinvest and has raised $81 million since its inception in 2013.

Despite a surge in Indian consumer-facing businesses going public this year, Chitharanjan emphasized that Blue Tokai is prioritizing internal goals over immediate IPO plans. “Market conditions will fluctuate, and we are more concerned about reaching our internal benchmarks,” he stated, adding that the company’s patient investors are not pushing for a quick public listing.

Blue Tokai’s profitability strategy includes ensuring “healthy” profit margins, making it an attractive IPO candidate in the future.

The Indian café market is heating up, with global brands like Starbucks and Costa Coffee expanding aggressively. Starbucks, through its Tata joint venture, operates over 400 outlets, while Costa Coffee runs 179 outlets. Blue Tokai, however, remains unfazed by competition.

“We’re not at a stage where there’s intense competitive pressure,” Chitharanjan said. “It’s about growing the market rather than competing for share.”

Blue Tokai’s projected revenue run rate for 2024 is ₹370 crore, with the company focusing on rapid growth and market development to meet its ambitious goals by 2027.

With its strong growth trajectory, focus on profitability, and significant market potential, Blue Tokai is positioning itself as a formidable player in India’s thriving coffee culture.

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Sunil A. D’Souza, CEO and Managing Director of Tata Consumer Products, highlighted the company’s strategy to balance price hikes while remaining competitive in the market. He noted that the rise in tea prices was driven by a 20% drop in production and growing export demand, along with an early end to tea plucking this year, which will further impact supply.

D’Souza also emphasized that Tata Tea, which holds a 28% market share in India’s tea retail market, will implement gradual price increases over the next few months, aiming to equalize margins. The company is working to mitigate the risk of demand shocks by taking “calibrated price increases” over each quarter or fortnight.

The company is optimistic about a recovery in rural demand, buoyed by better monsoon conditions and expanded distribution efforts. Meanwhile, Tata Tea continues to face challenges from urban flooding and a sluggish rural economy, factors that have dampened overall volumes.

In a bid to streamline operations and enhance customer experience, Tata Consumer Products has announced a partnership with Salesforce to launch an integrated sales and service platform, “Mavic.” The company expects this move to drive revenue growth and reduce operational costs.

As the tea industry grapples with supply issues and rising input costs, Tata Tea’s strategic price hikes and focus on expanding rural demand signal the company’s commitment to sustaining growth in a competitive market.

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The refreshing drink, known for its bold coffee flavor complemented by a tangy hint of cranberry, has gained popularity both internationally and across cafe menus in India. Nishant Sinha, founder of Roastery Coffee House, expressed his delight at the beverage’s widespread positive reception, noting that it has become a staple order in their cafes. The success of Cranberry Coffee has also inspired other coffee brands, solidifying Roastery’s reputation for innovation in specialty coffee.

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The brand’s success is attributed to a blend of premium offerings, localized menus, and strategic expansion into key urban and semi-urban markets. Starbucks’ ability to resonate with Indian consumers—offering a mix of global favourites and regionally inspired beverages—has been a key driver of its growth. Additionally, its premium positioning has attracted India’s aspirational middle class, contributing to its surge in popularity.

Café Coffee Day, which once held the top spot, has struggled to maintain its lead due to financial challenges and slowing expansion. Meanwhile, Starbucks has capitalized on the gap, pushing ahead with rapid store openings and innovative customer engagement strategies, including loyalty programs and digital experiences.

Industry experts highlight Starbucks’ successful localization of its global brand while maintaining its premium image as a crucial factor in its rise. As India’s café culture continues to thrive, Starbucks is well-positioned to further strengthen its hold on the market.

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The scheme covers seven key areas, focusing on every stage of tea production—from plantation to consumption. It includes replantation support for large tea gardens, international brand promotion, technological advancements, and research initiatives. Indian tea companies, especially those registered with Start-Up India, will also benefit from brand promotion activities under this scheme.

The Tea Board emphasized that this comprehensive plan aims to strengthen the domestic tea market, enhance India’s presence in global tea exports, and contribute to long-term industry sustainability.

Five Food Tech Innovations Poised to Transform Commercial Kitchens

As the festive season approaches, commercial kitchens across the food industry are gearing up for increased demand. From restaurants to cloud kitchens and quick-service restaurants (QSRs), technology is playing a critical role in making operations more efficient and profitable. After reviewing recent developments, here are five food tech innovations set to revolutionize commercial kitchens.

1. On2Cook: AI-Powered Speed Cooking

On2Cook, the world’s fastest AI-integrated cooking device, combines induction and microwave technology to prepare food in record time. This innovation can reduce cooking times by up to 70% while saving 50% in energy, all while preserving vital nutrients. Suitable for any commercial kitchen, it allows chefs to prepare dishes ranging from biryani to cakes in a third of the usual time. On2Cook is an ideal solution for restaurants with limited kitchen space and promises faster service, improved quality, and zero food wastage, leading to better business growth.

2. BOX8: Specialized Food Delivery Partner

While Swiggy and Zomato dominate the food delivery landscape, BOX8 provides a specialized service focused on delivering desi meals in convenient, easy-to-carry boxes. Known for their “all-in-1” meals, BOX8 offers a wide range of Indian favourites, including biryani, wraps, and combo meals, with a delivery time of just 38 minutes. Operating in Mumbai, Pune, Gurugram, and Bengaluru, BOX8 can partner with restaurants looking to offer a seamless, high-quality food experience to customers.

3. Ecoware: Sustainable Packaging Solutions

As consumer awareness around climate change grows, the demand for eco-friendly packaging in commercial kitchens is increasing. Ecoware offers over 25 sustainable food packaging solutions made from farm waste that decompose within 90 days. As restaurants move away from plastic, biodegradable and edible packaging made from food-grade polymers like seaweed is becoming more popular. These solutions not only help the environment but also align with evolving customer preferences.

4. Scott Meat Processing System: Automated Food Processing

Automation in food processing is becoming essential for commercial kitchens, and the Scott Meat Processing System is leading the way. This robotic butchery machine enhances productivity while ensuring a safer work environment by reducing human interaction with hazardous equipment. This innovation is especially beneficial for non-vegetarian kitchens, as it streamlines meat processing and ensures higher efficiency.

5. SmartQ: Digital Solutions for Cafeterias and QSRs

For smaller establishments like cafeterias and QSR outlets, managing multiple tasks can be overwhelming. SmartQ, a Bengaluru-based B2B food-tech company, offers a digital platform that streamlines operations, from vendor integration to minimizing wait times and improving collaboration. Operating in over 13 countries, SmartQ’s innovative technology helps reduce queues, enhance customer experience, and improve operational efficiency.

These food tech innovations are shaping the future of commercial kitchens, making them more efficient, sustainable, and customer-friendly.

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The Master Origins Colombia Ready to Drink Coffee marks a significant shift for the brand, which has built a global reputation through its premium in-home and office coffee platforms. This limited-edition beverage, available only in the U.S., is crafted with Colombian coffee beans and sweetened with local honey, reflecting Nespresso’s commitment to quality and sustainability.

Starting October 2, the Master Origins Colombia Ready to Drink Coffee will be available in select Nespresso Boutiques, online, and through the Nespresso mobile app.

Coffee remains one of the world’s most beloved beverages, with global consumption reaching a 20-year high. According to the National Coffee Association, while home brewing is still the most popular method, an increasing number of consumers enjoy their coffee in multiple settings, driving demand for RTD products. The association noted that RTD coffee is now the third most popular form of coffee preparation, with its consumption more than doubling over the past year.

The RTD coffee market is booming, with global revenues estimated to reach $36 billion in 2024. According to Statista, the sector is projected to grow at a compound annual growth rate of 5.4% through 2028.

Nespresso, launched by Nestlé in 1986 and introduced to the U.S. four years later, gained widespread popularity for its premium brews and high-end customer service. During the pandemic, the brand thrived as consumers sought at-home coffee experiences, particularly with speciality brews. However, as more people return to their busy lifestyles, Nespresso is expanding into the portable coffee segment to meet evolving consumer demands.

Despite economic challenges like inflation, Nespresso has continued to perform well for Nestlé. In 2023, the brand saw double-digit growth in North America, capturing market share from competitors. This momentum carried into 2024, with Nespresso reporting mid-single-digit growth in the first half of the year and further gains in market share.

The introduction of Nespresso’s RTD coffee signals the brand’s ongoing innovation, as it continues to adapt to the needs of modern coffee drinkers nearly 40 years after its inception.

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The Tea Association of India (TAI) announced that tea production in 2024 is expected to fall by 160–170 million kilograms, compared to last year, due to a combination of unfavorable weather and pest issues. North Indian tea-producing regions have been hit hardest, with Assam recording an 11% drop in output and West Bengal experiencing a 21% decline by July 2024.

The unprecedented weather pattern saw insufficient rainfall early in the year, followed by excessive rain in June and July. This led to weakened tea bushes, worsening the crop outlook. Pest infestations, including the spread of Helopeltis and Looper Caterpillar, have also escalated the situation, with tea estates reporting substantial damage.

Sandeep Singhania, President of TAI, emphasized that both the environmental conditions and regulatory challenges, including the limited number of approved chemicals for pest control, have significantly affected production. While tea prices in North India have risen by approximately 13% due to supply shortages, the increase has not compensated for the sharp decline in output. Furthermore, export prices have dropped by 4%, adding to the industry’s challenges.

The tea industry in North India is calling for government support, particularly in West Bengal, to help mitigate the impact of this crisis and ensure future stability amidst rising costs and unfavorable conditions.

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