STiR coffee and tea magazine

20 STiR coffee and tea / Issue 2, 2018 (April / May) Tea Report: Peter Keen INDIA Small Growers Demand Support Reports on India's STGs (small tea growers) increasingly share one single word; "demand." In the face of climate change, they are demanding that government tax and subsidy policy become farm-centric instead of favoring large estate growers. They demand minimal voice supports for their leaf and strongly urge the government to introduce crop insurance. This growing advocacy and militancy seems likely to spread across growing nations where large numbers of small- holders depend on favorable climate conditions and know that they are chang- ing face and becoming unstable. CISTA (Confederation of Indian Small Tea Growers Association) represents over 250,000 farmers, each with plantations of under an acre. It claims to contribute over half of India's total processed tea yield, through STGs supplying the bought leaf factories not owned by large estates. (Official figures place it at 35%.) Its president, Bijoy Gopal Chakraborty, argues that the estates get government priority in support because they employ around 1.2 million workers. His counter is that there are 2.5 million engaged in the operations of the small growers. Examples of the disparity on govern- ment treatment of grower include a floor limit for tax deduction for bush replanting and irrigation facilities and tariff decreases in a proposed ASEAN trade agreement that are expected to open up a flood of cheap China imports. A January 2108 "charter of demand" for price support includes figures on the growing unprofit- ability of STGs. Assam production costs average INRs18 per kilo and prices are INRs14. In Tamil Nadu/Kerala, they are INRs18.50 cost and INRs7 price. How this will all work out is very unclear. Most estimates are that 8 million smallholders produce 70% of the world's tea. The CISTA situation seems typical and the issues it addresses have major social, economic and political implications. Order Fulfillment Software AI is artificial intelligence, more usefully and commonly defined today as machine learning. IoT stands for internet of things, where any object, however small, has its own internet address so that it can communicate, share data, and respond to request as if it were a mobile phone. Cloud is computing and data storage capacity on demand, directly analogous to electricity as a utility. Switch on and you get what you need without knowing where the power plant is or where your software and data are stored – they are "in the cloud." Chai Point is a rapidly growing Indian company that is both a leader in business innovation and in the forefront of applying these IT tools at POS – point of sale. Established in 2012, it is the largest hot beverage delivery firm in the country. From its inception, technology has been fused into its entire operations. It seems a bellwether for the industry in general. Chai Point was set up to fill a massive gap in the Indian market (one shared with the UK). Though 83% of Indians were mainly tea drinkers and only 17% coffee devotees, coffee shops were everywhere and tea houses almost nowhere. Consumption of cha was 15 times higher than coffee. Amuleek Singh Bijral brought a strong technology focus to his startup. He had been the country manager for a leading security software firm, RSA, and a Microsoft executive. He saw a number of opportunities in the problems of the tea market; • Lack of product variety and distribution. "Same old brands across the market… most of the teas packets that consumers buy are usually nine-to-ten months old." • No standardization, unlike coffee: "Everyone makes tea, as per his or her own taste and belief." • Lack of communication: "No tea brands were bothered to educate the customer at the last mile." He started with retail stores, which now number close to a hundred. Surveys showed that customers were far more diverse in potential but constrained by products and distribution. More than 70% consumed their tea outside the home, mostly in the office. A third had tea four times a day. Chai Point needed to offer end-to-end-solutions to a broader market with varied demands. The company launched four main innovations: • Order fulfilment for calls placed not just direct but through food delivery and restaurant ordering platforms, such as Zwiggy and Zomato. • Chai on Call (CoC): hot tea sachets ordered directly via the company's website or mobile apps. • CPG: Tea packets freshly packaged in the store. • Box C: a tea (and coffee) dispensing machine with full internet connectivity by plug-in socket, AI software (learning and hence customization) and IoT (connectiv- ity) to serve customers in their offices. Box C provides a wealth of informa- tion: tea quality and status, when to refill ingredient inlets, cups sold since the last reset, Data is sent to the central server every five minutes to provide inventory and performance indicators. Tea, milk, temperature, water acidity, etc. are monitored and AI-adjusted. AI maximizes details about customer behavior while IoT manages the machine functions. Box C uses the standard Android operating system to open up new services via mobile phone, including a prototype dispenser to be located just about anywhere – hospitals, airports, and public spaces. Box C is not "advanced" technology. It uses standard hardware, software and communication protocols that are ultra-advanced in their combination and packaging and in their tailoring to the firm's business model. All data are stored and accessed via Amazon's AWS, reducing the need for complex data center and network operations. None of Box C is futuristic. The message for other tea retailers and service providers is the adage "The Future is Now." India smallholders demand action

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