Coffee Round Up-q2-09

Thailand

Thailand’s aggressive True Corp, whose core business is communications, tapped into a captive market of customers passing through its many phone, internet and cable TV retail centres and set up a chain of coffee shops inside some of its larger facilities some years ago. Customers could pay their True utility bills, surf the internet, ogle at the latest phones – and have a cup of coffee all in the same place. The brand has since expanded beyond its own in-house locations and now operates 41 shops, of which nine are in universities.

True is planning to set up another 18 shops in universities in 2009, preferring to stay away from the archetypal shopping mall locations where it established its name as a trendy hang out for lifestyle consumers. A downturn in consumer spending has made True cautious about expanding its up-market mall locations unless there is proven high visitor volume, and university campuses score well in this regard, according to Papon Ratanachaikanont, True Corp’s managing director overseeing the lifestyle retail business.

(Reported by Glenn John and Heneage Mitchell)

Vietnam

Singapore’s Jayangti Pte. Ltd. is investing VND288 billion (US$16.2 million) in a new instant coffee plant in Dray Bhang commune, Cu Kuin district, Dak Lak province in the coffee-rich Central Highlands .

The plant, which is expected to break ground in June and to be completed in May, 2011, will have an annual capacity of 6,000 tons of instant coffee and will be the largest facility of its kind in the country.

Dak Lak has been trying to attract foreign investors to the region for some time and has given growers easy credit to upgrade storage and processing equipment in an attempt to raise the quality of the coffee produced locally and make it more attractive for exporters.

Read more

India

At the Tea & Coffee World Cup/ASIA 2008 (TCWC) held at Hyderabad, India in November 2008, AZACONSA of Spain participated to showcase to the Indian consumers their world class product – SHIP sweetener, an aspartame-based sweetener approved by FDA.

The company was assisted by Emmen Consultant & Investment Co, Mumbai to exhibit the products at the exhibition and create product awareness among the Trade and Consumers.

TCWC became the launch pad for SHIP Sweetener in India and the official distributors in India, Emmen Consultant & Investment Co, Mumbai, received tremendous response from the hospitality industry, agents from different parts of India and consumers.

Read more

Brazil

Brazil’s agriculture minister Reinhold Stephanes has said the government will pay coffee growers up to 23% more than the current benchmark for up to 3 million bags of arabica from November 2008 to March 2009 to help push up prices.

Brazil exported around 26.1 million bags of coffee in 2008. The government move will in effect reduce the amount of exportable coffee available in 2009, compounding the effects of a natural decline as most coffee plants enter the slower half of a two-year growth cycle and cost-conscious farmers use less fertilizer which in turn lowers yield.

According to data from the Brazilian Institute of Geography and Statistics, or Ibge (the Brazilian Census Bureau), Brazil’s 2009/10 coffee crop will come in at 39.9 million bags, up 1.4% from 39.3 million predicted earlier. It estimates that 2,406,466 ha is planted with coffee and productivity is predicted to be 18.45 bags per ha.

Russia

Russia is Nestle’s sixth largest market, and a recent decision to invest US$207 million expanding capacity at its Timashevsk coffee factory in the Russian Krasnodar region reinforces its commitment to the market.

"Nestle is still committed on investing in Russia, its sixth-largest market in terms of sales volumes," according to Stefan De Loecker, head of Nestle’s Russian operations

Citing high prices and weak consumer demand De Loecker said the company’s earnings in Russia are forecasted to rise by 5% in 2009, a slower pace than the 8.3% growth of 2008. Nonetheless, "Russia is expected to outperform the group’s global sales," according to De Loecker.