coffee in russia

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International business :

International business Presented to Prof. C.S.Balasubramaniam BGIMS MMS- Finance COFFEE EXPORTS TO RUSSIA

Group members:

Group members ROHAN HALDANKAR (66) POONAM RAHATE (88) DIPANSHOO SHENDE (98) NITESH SOLANKI (104) SHERVIN MASHREGHI PG(9 )

About coffee:

About coffee Coffee is a brewed beverage with a dark, slightly acidic flavor prepared from the roasted seeds of the coffee plant, called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries Green (unroasted) coffee is one of the most traded agricultural commodities in the world. It is one of the most-consumed beverages in the world.

Indian Coffee :

Indian Coffee Extraordinary among beverages India is the only country that grows all of its coffee under shade India has consistently produced and exported a remarkable variety of high-quality coffees for over one hundred and fifty years! Indian coffee grower pours his life into the crop.

INSTA coffee:

INSTA coffee

arabica:

arabica These trees produce a fine, mild, aromatic coffee. Represent approximately 70 percent of the world's Coffee production. Generally grown between 2,000 to 6,000 feet above Sea level.

robusta:

robusta Approximately 20% of the coffee produced in the world is robusta . Cheaper to produce. Robusta has about twice as much caffeine as arabica .

Travancore (Kerala):

Travancore (Kerala) Elevation : 400-1600 m MSL Rainfall : 2000-4000 mm Main coffee type : robusta Total area under coffee : 13,000 hectors Average production : 9,000 MT

Araku valley (Andhra Pradesh):

Araku valley (Andhra Pradesh) Elevation : 900-1100 m MSL Rainfall : 1000-1200 mm Main coffee type : Arabica Total area under coffee : 20,000 hectors Average production : 3,100 MT

Nilgiris (Tamil Nadu):

Nilgiris (Tamil Nadu) Elevation : 900-1400 m MSL Rainfall : 1600-2600 mm Main coffee types : Arabica, Robusta Total area under coffee : Arabica - 3,600 hectors ,Robusta - 4,000 hectors Average production : Arabica - 1,400 MT,Robusta - 2,800 MT

Exports by India:

Exports by India Year Quantity ( tonnes ) Value (US $ million) Value crores ) Unit value ( tonne ) 2007 214291 458.24 1907.83 89029 2008 213158 563.93 2362.00 110809 2009 180413 391.21 1931.03 107033 2010 291135 641.79 3007.80 103312

Exports of coffee from India to countries:

Exports of coffee from India to countries Country Year Value in (MT) 2009-10 2010-11 ITALY 47079 84216 RUSSIAN FEDERATION 27482 34154 GERMANY 13171 34792 BELGIUM 6680 21428 SPAIN 6169 11578

Introduction to Russia:

Introduction to Russia

Geography of Russia:

Geography of Russia Russia is the largest country in the world ; its total area is 17,075,400 square kilometres ( 6,592,800 sq mi). It lies between latitudes 41° and 82° N , and longitudes 19° E and 169° W .

demographies :

demographies Population: 142,905,200 (2010 Russian Census ) Growth rate: -0.06% (2010 ) Birth rate: 12.5 births/1,000 population (2010 ) Death rate: 14.2 deaths/1,000 population (2010) Life expectancy: 68.98 years (2010) Male : 63.03 years Female : 74.87 years

Business of Russia:

Business of Russia Imports in Russia Commodities : machinery, vehicles, pharmaceutical products, plastic, semi-finished metal products, meat, fruits and nuts, optical and medical instruments, iron, steel,tea and coffee. Exports in Russia Commodities : petroleum and petroleum products, natural gas, metals, wood and wood products, chemicals, and a wide variety of civilian and military manufactures.

Slide 18:

PESTLE ANALYSIS

Political environment :

Political environment Semi-presidential republic Political Instability Good economic relations with India

Economic environment:

Economic environment It is the 10th largest economy in the world by nominal GDP and the 6th largest by purchasing power parity (PPP) The average nominal salary in Russia was $640 per month in early 2010, up from $80 in 2004 Unemployment in Russia was at 6% in 2010,down from about 12.4% in 1999. The middle class has grown from just 8 million persons in 2000 to 55 million persons in 2009.

Social environment:

Social environment Demographics Consumer attitudes and opinions Consumer buying patterns

Technological enviornmnet:

Technological enviornmnet Russian president dmitry medvedev formulated top 5 priorities for the country's technological development Efficient energy use Space technology Nuclear energy Pharmaceuticalst IT

Legal environment:

Legal environment The legal regulations of the Russian government is very friendly with Indian companies and worldwide exporters of agro-based products

Environment factors:

Environment factors Cold atmosphere benefits consumption of coffee

Why Russia:

Why Russia Growth in 10yrs,changes in consumer tastes Promotion of coffee consumption. Coffee became a basic-needs product. Changes in lifestyle (leaded to opening of hundreds of coffee shops). Overall increase in consumer spending. Soluble coffee consumers moved to higher-quality freeze-dried coffee.

potentialities:

potentialities Quality of the product and service is still relatively low. General consumers perceive all R&G coffee as a gourmet product but don’t demand quality. Limiting factors of out-of-home coffee consumption growth: Lack of competition. “ People drink more coffee not because it is cheaper, but because it is higher quality.” Doctor Ernesto Illy

Slide 27:

Split between Arabica and Robusta: Equal in total imports Import of R&G coffee: 80% Arabica, 20% Robusta. Soluble coffee market is now comparable with traditional for Russia tea market. R&G coffee is still considered to be a gourmet product.

SWOT of Insta coffee:

SWOT of Insta coffee STRENGTHS: Quality products Low competition In house sourcing of coffee beans.

Slide 29:

WEAKNESSES: New in Russia market Distribution in small towns

Slide 30:

OPPORTUNITIES: Market is growing very fast. Most of Russian market is untargeted. Russian culture is changing. Expansion into retail operations. Expand into other territories.

Slide 31:

THREATS: International players Other established players

Marketing mix:

Marketing mix Price All coffees will cost between 70-100 rubel per 100gms pricing strategy Perceived Value Strategy Value for Money

Segmentation and Targeting :

Segmentation and Targeting Segmentation Working professionals and coffee lovers . Age 18 to 60 Years with different variants . Target Market Metropolitan Cities and railway network. Competing with LOCAL CHAINS: Shokoladnitsa , Coffee House, Coffeein,Cofemania,Coffee Bean. MULTINATIONAL CHAINS: Starbucks, Costa Coffee etc.

Packaging and labeling:

Name and Brand name of the product Country and region of origin Name and address of the local importer Usage to directions in Russian and regional language Date Marking, Manufacturing Date ,Expiry Date Storage Batch Number and Packaging Date(PKD) Bar Code Nutritional Value (different for various flavors,) Ingredients (different for various flavors). Packaging and labeling

Distribution:

Distribution Generally distributors stock the products in their warehouses and regularly supply to retailers . Tie-ups with many super market chains. We will follow 4 level channel of distribution involving our importer, distributors and retailers. Through our distributors product will reach out to all the major cities of Russia.

Promotion mix:

Promotion mix All leading newspapers Food and beverages magazines Television and teaser ads E-marketing Kiosk machines

Competitive strategies:

High quality green and roasted coffee from India Small sachets at affordable prices Rich aroma and taste of Indian coffee Competitive strategies

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