Online marketplace to quench global thirst for India's rich and dark coffee

As consumers in developed markets increasingly sip Indian coffee, an online marketplace for India’s own rich and dark varieties is the government’s latest bet to help more than 360,000 coffee farmers and improve the brand recognition of Indian produce globally.

The government’s latest foray into the online space makes abundant use of complex blockchain technology to establish traceability for every sack of Indian coffee being sold domestically and abroad and seeks to directly connect global buyers with growers. 

Launched on Thursday, the app-based marketplace is currently a pilot project and will be scaled up accordingly.

“This is the first time such a portal has been established anywhere in the world. Other major coffee-producing nations such as Ethiopia and France had put in place similar mechanisms to establish the authenticity of their produce but no one has ever made a coffee-only marketplace,” Coffee Board Chairman Srivatsa Krishna said.

Focusing on the traceability of coffee to boost its brand value, the marketplace operates a decentralised, locked ledger for users. The Coffee Board hopes this will lead to better price discovery for farmers and double their average earnings by 2022. 

“Currently a farmer realises only 5 cents from every cup of coffee sourced from India, but sold at $4 in New York,” Krishna said. 

Many producers may for the first time be able to gauge the value of their coffee in the global markets, receiving verifiable details from the government as well as information at all stages of the supply chain. 

Apart from a stronger negotiating position for producers, the portal will provide an online secure framework for sharing ledgers and transactions.

The portal had been under development since September last year, when Commerce and Industry Minister Suresh Prabhu had announced it. He promised to speed up the process of providing geographical indicator tags to various types of coffee, which remains in the works.

While coffee cultivation in India has expanded to about 454,000 hectares, production is highly fragmented with more than 360,000 farmers in it. Of these, 98 per cent are small-scale, according to official estimates. Despite India being the seventh-largest producer globally, more than 90 per cent of the yield comes from them.

Cultivation is primarily confined to Karnataka (54 per cent of the total), with Kerala (19 per cent) and Tamil Nadu (8 per cent) forming traditional coffee tracts that have led to highly prized varieties. 

In 2017-18, the crop harvest data showed coffee production in the country at 316,000 tonnes, of which 95,000 tonnes was of the Arabica variety and 221,000 metric tonnes of the Robusta variety. 

“This transformative initiative will help to create a brand image for Indian coffee through traceability, reduce growers’ dependency on intermediaries by having direct access to buyers, and find right coffee suppliers for exporters and in the stipulated time," Commerce Secretary Anup Wadhawan said.

Aiming at boosting the visibility of Indian produce in major foreign markets, the board is in talks with global coffee giant Starbucks on sourcing from India. 

It outlined major initiatives such as drones to monitor pre- and post-harvest crop conditions and mobile apps that allow farmers in rural communities to get access to industry and quarantine data. 

It is setting up coffee-vending machines and serving special brews at major monuments in the country.