With 144 Years of Coffee Expertise Behind it, Allanasons is One of the Country’s Leading Coffee Exporters
By Heneage Mitchell
Aleading exporter of some of India’s finest coffee’s Allanasons is a family-owned company that has been doing business since it was founded in 1865. The company was into general trading in the initial stages and has now expanded into the FMCG sector based out of Dubai. In India its core business is trading in meat, spices, fruit pulps and coffee.
Trade in the coffee sector has remained stable for some time, according to Allanasons’ general manager MP Devaiah
"We have been doing around 25,000 to 30,000 tons of coffee exports annually, except in 2008, which saw a downturn due to economic factors gripping the world economy," he told Tea & Coffee Asia recently.
Allanasons has been one of the leading exporters of Indian green coffee - its export office is located in Bangalore - for the last 25-30 years and it has weathered similar economic storms of one sort or another in its long and storied history.
The company operates a processing plant in Hassan, Karnataka, and operates its own in-house testing laboratory for QC monitoring, one of the first in India to be operated by a private company.
It also has its own monsooning facility in the coastal city of Mangalore with a 1,500 to 2,000 tons capacity.
"We do the entire monsooning process from the beginning to the end, Allanasons is the only company that does this," --- Devaiah revealed. "We use good quality arabica or robusta cherries, A or AA grades, which are subjected to a series of operations including controlled exposure, bagging and rebagging to ensure the coffee absorbs the moisture very slowly to achieve the unique flavor profiles of monsooned Malabar."
Allanasons’ monsooned Malabar buyers are primarily from the Scandinavian countries, together with some Germany, Italy and the US.
"A well-prepared monsooned Malabar is in great demand, and the demand has been increasing over the last few years," said Devaiah. "It was high initially, then declined, now there are more inquiries and greater demand. Currently supply and demand is well-balanced, so one can expect the prices to remain relatively stable and demand to be sufficient over the foreseeable future."
Excellent relationshipsOver its many years of coffee trading, Allanasons has established excellent relationships with coffee growers. It knows the ins and outs of the Indian coffee trade as well as or better than anyone else.
Coffee is sourced directly from growers, through direct farm gate transactions, and also through agents that buy at farm gate. It also sources clean coffee through designated agents.
"These coffees may already be graded and we take the coffee from them," said Devaiah. "We have been trusted trade partners with our suppliers for many years. Around 60%-70% of our requirements are purchased as raw coffee - cherry or parchment. The balance is ready-to-market grades, the majority of which is sourced through the agents. Our plant can process between 15,000 to 18,000 tons of coffee per year, the balance of our needs is made up of clean coffee buying."
Export marketsAllanasons does supply small quantities to the domestic market but it is primarily and exporter. Europe has been the most important market for Indian green coffee for many years, Italy being the leading consumer. Aside from Europe, other regions of importance for Indian coffee exports are the Middle East and the Far East.
"The Middle East has traditionally been a buyer of Indian arabica," Devaiah said. "The traditional relationship that has been established over centuries of trading predisposes the market to Indian coffees in general. They are well accepted and the flavor profiles are preferred among Middle Eastern consumers, though Brazilian and Vietnamese coffees are making inroads into this region these days."
With regards to the US, a sophisticated consuming country that in theory could be a major importer of fine Indian coffees, its proximity to South American sources naturally puts Indian coffee at a disadvantage in that market. Africa buys some Indian coffee in small quantities primarily for blending purposes to compensate for lower quality Vietnamese coffees.
According to Devaiah, the Far East is not a large market for Indian coffee products.
"Japan are large consumers but traditionally buy from South America and Ethiopia. Price is less of an issue in Japan, but there are long-term trade relationships between Japan and Brazil that predisposes the market to Brazilian coffee. In South Asia, Indian coffee is used in roast and ground blends, but the quantities are not great. For Indian-produced soluble coffees the primary markets for are Russian and the CIS."
The global economic crisis has of course affected trade, with traditional markets showing signs of distress as the credit crunch bit hard at the end of 2008.
"Credit issues and supply demands have slipped in some markets due to the credit issues gripping the global economy" admitted Devaiah "Some traditional buyers have looked elsewhere for cheaper alternatives. However experts believe that the industry will remain faithful to Indian coffee suppliers in the long run as Indian coffee has superior quality, flavor and consistency over some of its cheaper competitors and most consumers these days demand a higher degree of quality in their coffees that Indian coffee provides."
Working in its favor, Indian coffee is essentially a relatively limited commodity that enjoys good demand.
"There is limited coffee production in India, consistently averaging 4.7 to 5 million bags over many years, so the requirement is to consolidate on what is being done and concentrate on getting better value, improving the quality and garnering higher prices," Devaiah said. "Strengthening the domestic market is another key to developing better returns for the growers but this would not necessarily benefit exporters or overseas fans of Indian coffee."
BullishAllanasons is bullish about the prospects for Indian coffee exports, seeing the demand for the unique flavor profiles and quality growing among discerning coffee drinkers worldwide. The company has a wealth of experience to draw on, and this is one reason why it has developed such a loyal following among international buyers seeking excellence and quality.
"We have been very consistent in quantities and commitments and qualities for many decades," Devaiah pointed out. "We have developed a very strong network on the supply side. We have developed a good reputation for our commitment to quality, quantity and on-time shipments over the last three decades. We also have developed the strength to source all four varieties of coffee from India - arabica washed and unwashed and robusta washed and unwashed - as well as monsooned coffees."
Allanasons is known to source speciality coffees directly from growers, supplying buyers of high quality coffee, and trading insmall quantities of certified organic.
"The demand for Fair Trade, Rainforest Alliance and organic coffees is increasing slightly, but the market fluctuates quite radically and it is hard to see a sustainable pattern emerging in this sector. In any case, the volumes are small," Devaiah concluded.
Having been in the field before the liberalization of the coffee industry in India, the company’s relationship with growers has been developed over a period of many years and the growers are very comfortable dealing with Allanasons due to on-time and fair payments to suppliers. Clearly, Allanasons is a one-stop solution for coffee buyers looking for excellence, quality and reliability. And, equally clearly, the company is going to weather the current financial storm and continue to prosper by serving its customers with its winning blend of integrity and care.