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Coffee and Tea Reports
from the Front Lines

Carving a Niche in Coffee for the Masses
TOKYO, JAPAN - A recession proof formula, including low prices and few rivals has led to roaring success for the Dutor Coffee Co., reported The Nikkei Weekly recently. The chain of European-style coffee bars is extremely popular and is expanding rapidly. Low prices have given Doutor Coffee a certain immunity from the recent recession. This is confirmed by the fact that existing store sales are running ahead of last year. As of the end of September 1999, major chains operate over 1,000 selfservice coffee shops in Japan and about 70% of these are Doutor coffee shops.

Doutor Coffee’s success is also attributed to the absence of potential rivals. Powerful competing coffeeshop chains started entering the market seven to eight years after Doutor Coffee started expanding. This enabled the company to lock up lucrative spots in Tokyo. Seattle-based Starbucks Coffee entered the Japanese market in 1996 and had opened 82 coffee shops by the end of September 1999. However, the entry of foreign coffee chains does not pose a threat to Doutor Coffee at this point.

Supplying products to franchises is the main source of profit at Doutor Coffee. Although profit margins are high at directIy managed stores, personnel costs and capital investment are a heavy burden. While the profit margin on supplies to franchise shops is low, it assures steady profit at a relatively low risk. This is further supplemented by royalties. Because the potential for opening new stores in Tokyo is decreasing. To sustain the high glowth rate, Doutor Coffee will begin expanding outside the Tokyo metropolitan area.

The company is also trying out several other types of coffee shops in different price ranges. These include “Cafe Colorado,” a conventional coffee shop; “Exceisior Cafe,” a coffee shop that serves liquor at night; “Olive no ki,” a spaghetti-shop chain; and “Le Cafe Doutor,” a chain of prime-location shops.

India Remains Largest Supplier of Tea to Russia
ATHENS, GREECE - India remains the largest supplier of tea to Russia, reported New Europe recently. Kumar Chakraborty, the director of India Tea Board’s Russian department stated Indian tea accounts for over 65% of Russian tea imports, with tea from Sri Lanka (Ceylon tea) accounting for 20% and China 5%, he said.

Russia imported 118,465 tons of tea in the first nine months of 1999, including 84,004 tons of Indian tea, up 158% and 6.65% respectively from the same period in 1998, when Russia imported 116,617 tons, including 78,768 tons of Indian tea, the Russian state statistics committee said. The share of Indian tea on the Russian market in January-September 1999 amounted to 70% compared with 67.5% in the same period in 1998. Leading Russian tea trading companies include Orimi Trade, Grand Trading House, Maisky Chai, Nikitin, Yuta, and Yuta, Russian Product and Moscow Tea, Chakraborty said.

Exports of tea to Russia account for less than 12% of overall production, which amounted to 806,000, tons in 1999, down 7.6% from 870,000 tons in 1998, Chakraborty was quoted as saying. The fall in production occurred due to unfavorable weather conditions in tea growing regions. The share of Indian tea on the Russian market in January - September 1999 amounted to 70% compared with 67.5% in the same period in 1998.

As regards Russian tea imports from other countries, Russia imported 17,878 tons of tea from Sri Lanka in the first nine months of 1999, down 31.2% from 26,000 tons in the same period in 1998. The third largest supplier of tea to Russia is China. Russia imported 5,989 tons of Chinese tea in January - September 1999, up 14% from 5,254 tons in the same period in 1998.

Bad Coffee is Forbidden in Italy
ROME, ITALY - Italy is trying to halt the decline of one of its great national symbols, espresso, by awarding a special seal of approval to cafes and restaurants that serve coffee “as it ought to taste,” reported The London Times recently. The National Italian Espresso Institute, based in Brescia, says standards are falling under the impact of instant coffee, known in Italian as caffe all’ americana - or, sometimes, acqua sporca (dirty water). A real cup of espresso should consist of 25 mls of “chestnut-brown liquid, brought to life by a tawny reflection,” Luigi Odello, director of The National Italian Espresso Institute said.

Together with wine and grappa, espresso is the lifeblood of Italy. La Repubblica newspaper said that the espresso institute, which represents the interests of coffee importers and coffee machine manufacturers in Italy, had been inspired by the example of the pizza industry, which moved to halt “the decline of another Italian national symbol” by laying down strict standards governing ingredients, including plum tomatoes, mozzarella cheese, and correct cooking methods that include the use of a wood-burning stove.

However, many baristas are letting standards slip, “for example by not grinding the beans correctly,” or by making it too bitter, Odello added. Cafes and bars whose coffee passes muster will be issued with special coffee cups decorated with stripes in red, green and white, the colors of the Italian national flag, “so that customers can be sure they are drinking the real thing,” an Institute spokesman said.

Scandinavian Per Capita Coffee Consumption Saturated; Vietnam to Increase Production
CARTAGENA DE INDIAS - Per capita coffee consumption in four northern European countries is expected to remain stable at 10.75 kilos per year - the highest in the world, according to Arne Vittrup of Caftrading S.A.

Vittrup, who was speaking to attendees at Expocafe’s 15th anniversary celebration, said coffee consumption in Denmark, Sweden, Norway and Finland had gotten to its saturation point in terms of both per capita consumption and the volume of imports because of little population growth. The four nations imported 4.314 million 60-kg bags of coffee in 1998 - and 97% of exports were Arabica coffees, he said.

High quality standards, cold weather, low prices compared to other beverages and little use of milk are some of the reasons for high per capita coffee consumption in northern Europe.

Vietnam aims to increase coffee output to 10.8 million bags by 2010, up 2.8 million bags. The Vietnamese government plans to increase coffee production by 2.8 million 60-kg bags over the next 10 years to 10.8 million bags, according to a Japanese trader. The bulk of the increased output will be Arabica coffee, while Robusta production will remain fairly stable, he said.

“The 2010 project by the Vietnamese government will increase coffee production by 2.8 million bags - 2.5 million of it Arabica - to a total of 10.8 million bags,” said the trader. The trader noted that Vietnam had already experienced tremendous growth in coffee output. Vietnamese coffee production grew from some 1.4 million bags in 1991/92 to about 8.0 million bags - 98% of which is Robusta - in the current 1999/2000 season, he said.

Coffee, planted on 30,000 hectares in 1991/92, is now grown on 375,000 hectares, he added. The trader, who was speaking to attendees at Expocafe’s 15th anniversary celebration, requested anonymity. (Patricia Avidan, Hencorp Research)



Tea & Coffee - March 2000
Triestespresso

Coffee & Tea Fest


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