Entrepreneurial start-up forays into India’s first soluble coffee – Taking Indian coffee global.Title Description
Over a multiyear effort, Sathguru helped an Indian start-up (later acquired by an Indian business group), access relevant technologies, establish a manufacturing facility and develop a business plan to foray into India’s first export oriented soluble coffee business.Challenge/Problem statement/Situation analysis
Our client, a greenfield Indian company, promoted by individuals of with diverse backgrounds, was keen on venturing into coffee sector with a prime focus on exports. The Indian coffee exports at that stage were primarily in the form of coffee beans which were low in value. Company sought assistance from Sathguru to devise a strategy and support them through the process of business incubation.Scope
The scope of Sathguru’s engagement included:
- Identify global opportunities in the coffee business.
- Suggest product portfolio, potential markets and manufacturing technologies.
- Provide technical and managerial support for business incubation.
The coffee exports segment in India was dominated by large players who typically owned large estates and exported minimally processed coffee beans. As this segment was highly competitive and capital intensive, Sathguru’s approach was to identify a technology oriented niche opportunity that maximizes return on investment.
To achieve this, Sathguru:a) Conducted detailed value chain analysis:
- Analyze value additions at different stages of the coffee value chain.
- Understand and project key growth trends of different coffee products and identify products with export potential
- Analyze global consumer trends and emerging expectations.
- Analyze the competitive landscape and assess competitors value proposition.
c) Develop a strategic plan for accessing the identified markets and handhold the client through the incubation process.
Based the assessment of the Indian market and global opportunities, Sathguru made the following recommendationsa) Avoid the highly competitive and capital intensive coffee beans export and explore high value added niche segment of instant coffee.
b) Build state-of-the-art infrastructure with technology that was futuristic to maintain the niche.
c) Recommended initial focus on US markets and a staggered approach to other markets.
The client was a pioneer in establishing country’s first export oriented soluble coffee plant and setting trend in the value added coffee segment. This not only helped the client but also helped the coffee industry to establish an identity for Indian coffee in global markets and move up the value chain.