Sri Lanka is the world’s fourth largest tea producer with just under 350,000 tonnes of tea produced annually, which amounts to 17% of the world’s tea crops. Therefore, it is surprising that the same country which is known for its high-quality tea is failing at a similar brew.
While the name Ceylon tea is known around the world, there was a beverage grown locally even before tea in Sri Lanka, then Ceylon. Historical records show that coffee predates tea by over a hundred years in Sri Lanka, with the first attempt at coffee plantations being recorded in 1740, and tea coming only in 1867.
By 1870, Sri Lanka’s coffee production peaked with over 275,000 hectares being cultivated, establishing itself as one of the major coffee-producing nations in the world, all the while the local tea industry was in its infancy. However, following this rise in cultivation, the local coffee industry faced a devastating fungal disease known as “coffee leaf rust” which plagued Sri Lanka as well as other Asian countries for the next 20 years. This brought down local coffee cultivation, which only amounted to 11,392 acres by the 1900s, and the rest of the estates were allocated for tea.
However, Colombo Coffee Company is now making plans to bring back this long-dormant industry to its old glory, according to its Deputy General Manager Kushan Samararatne.
The company is the flag carrier for Lavazza coffee, a world-renowned Italian brand of coffee, in Sri Lanka and is also the only total coffee solutions provider in the country. Having a track record of over eight years and serving over 250 clients across Sri Lanka, such as Shangri-La, Cinnamon Group, and SriLankan Airlines, Colombo Coffee Company is the largest coffee supplier to hotels, restaurants, cafes, and offices in the country.
[caption id="attachment_103407" align="alignleft" width="225"]
Deputy General Manager Kushan Samararatne.[/caption]
Speaking to The Sunday Morning Business, Samararatne stated that Ceylon coffee has the same potential as Ceylon tea to become an international brand of its own. This can be attributed to its higher quality compared to other coffee products that are currently available in the international market.
However, he explained that locally grown coffee is not being highlighted due to two reasons: High price due to high demand and low supply, and an inefficient internal industrial process.
“Right now, when you look at Sri Lanka, besides maybe one or two coffee processors who have gone into plantations, no one has given a significant effort to go and plant coffee up to the level of tea. Usually, you will find coffee plantations in areas like Matale, Nuwara Eliya, and Kotmale, where they will have a few coffee trees amongst some spices and other harvest.”
Samararatne stated that once a coffee tree is planted, it takes about two to three years to get the proper yield, after which the red cherry is plucked for optimal quality. In Sri Lanka, however, the process is to pluck the green cherries, which is the primary stage of the red cherry, process it into the green beans, and finally roast the beans before sending it into the market.
Therefore, the industry relies a lot on coffee farmers, according to Samararatne, and is at a stage where they have to go door-to-door collecting the coffee. This results in a lower supply of coffee, with both local and international demand increasing.
“Since India stopped exporting their coffee to Sri Lanka, even local demand has increased, but it is too expensive for the local market or even to compete in the international market.”
He stated that the reason for the high prices is that the process is ineffective, with the green cherry being bought from farmers at Rs. 100 per kilogramme, and the conversion of green cherry to green bean having a 1:10 ratio. He explained that if they were to export 1 kg of green bean, the raw material alone would cost them Rs. 1,000 before even adding in the transportation, packaging, and processing charges.
“If someone comes and offers the farmer Rs. 100 per kilogramme of green cherries, they do not care whether it is for the export market or local market. So the prices are currently high in the initial stage itself because the farmers are only looking at it from their point of view. In the larger context, there needs to be some sort of policy or pricing mechanism to solve this problem.”
Samararatne stated that in order for the local industry to compete in the international market, the first thing is to have a very competitive price; accordingly, that starts with having a green cherry to green bean conversion rate of at least 1:5 or 1:6.
He stated that another aspect the local industry needs to look at is maintaining a consistent quality. He explained that right now farmers sell the best-quality coffee, which is the red cherry; the average-quality coffee, which is the green cherry; and the worst-quality coffee, which is the overripe cherry.
“What is happening now is that farmers are selling anything they pick, and there are people to buy these as well. When they do this and mix all this excellent, average, and poor-quality beans together in one basket, everything just averages out and has an inconsistent quality to it.”
Samararatne stated that if the farmers were to specifically pick the good cherries and start processing them properly, Ceylon coffee will be of an excellent quality. He backed his statement up by pointing out that during an Australian Government-funded project which saw samples of Ceylon coffee being tested, the coffee’s cupping score, which is how they grade coffee, came to 90-plus, and this is branded as a “specialty coffee”.
He explained that this is why, as leaders in the local coffee industry, Colombo Coffee Company feels it is their responsibility to take Ceylon coffee to the next level. The company plans on going down to the grassroots level of the industry and investing in developing it from there.
He stated that they are currently working with coffee processors who collect the coffee from the farmers, and are trying to enter into an agreement where they only invest in the best-quality products.
“We are already working with some people from the Kotmale, Matale, and Nuwara Eliya areas to make this happen.”
Samararatne stated that this endeavour is supported by MDS, an Australian Government-funded organisation which goes to countries, selects a few industries with potential, and invests very deeply in them, while also giving them a proper understanding and plan to uplift the industry in a few years’ time.
“The idea here is to help Ceylon coffee as a whole industry grow. This is because when we look at our exports, we understand that the brand Ceylon coffee carries a lot more value than any individual brand.”
Speaking about changes that need to happen in a policy level, he stated that while Sri Lanka’s Export Development Board (EDB) has already got involved in the coffee industry by placing extension officers, they also need to come in and exercise their authority to create policy-level decisions for the farmers to follow.
“The Government already has several programmes which give farmers plants for free or at concessional rates, so they can also advise these farmers on selling the best-quality products.”
Once the initial issues facing the industry are sorted, Samararatne stated that the industry can start exporting to international markets including Europe, the Philippines, Indonesia, the Maldives, Malaysia, and even countries in the Gulf region, adding that our main competitors in the international stage would be other coffee-producing companies like Vietnam, Kenya, and India.
When entering the international market, he suggested that local exporters focus on being very price competitive and then focus on creating the Ceylon coffee brand reputation.
Samararatne explained that it will probably take the industry another two to three years to come to a meaningful level of exports, but that they hope to fast track it with the aid of coffee processors. He stated that if they are successful in entering into an agreement with the coffee processors, they can expect to start exporting at a small scale by either the end of this financial year or in the beginning of the next. However, scaling up coffee exports is expected to take at least another two to three years.
Colombo Coffee Company has also started a 100% locally sourced coffee brand called Toscana Ceylon. According to Samararatne, the brand also acts as a CSR (corporate social responsibility) project as the brand not only sources coffee locally from Kotmale, Matale, and Nuwara Eliya, but also helps farming families by providing them with school stationary and bags, and giving women in these areas an opportunity to work. The brand currently accounts for 15% of Colombo Coffee Company’s business.
“We are trying to develop the community and Ceylon coffee, together with our Toscana brand. But we cannot do this alone; other companies have to join us as well, if we are to promote Ceylon coffee as a brand.”
By 1870, Sri Lanka’s coffee production peaked with over 275,000 hectares being cultivated, establishing itself as one of the major coffee-producing nations in the world, all the while the local tea industry was in its infancy. However, following this rise in cultivation, the local coffee industry faced a devastating fungal disease known as “coffee leaf rust” which plagued Sri Lanka as well as other Asian countries for the next 20 years. This brought down local coffee cultivation, which only amounted to 11,392 acres by the 1900s, and the rest of the estates were allocated for tea.
However, Colombo Coffee Company is now making plans to bring back this long-dormant industry to its old glory, according to its Deputy General Manager Kushan Samararatne.
The company is the flag carrier for Lavazza coffee, a world-renowned Italian brand of coffee, in Sri Lanka and is also the only total coffee solutions provider in the country. Having a track record of over eight years and serving over 250 clients across Sri Lanka, such as Shangri-La, Cinnamon Group, and SriLankan Airlines, Colombo Coffee Company is the largest coffee supplier to hotels, restaurants, cafes, and offices in the country.
[caption id="attachment_103407" align="alignleft" width="225"] Deputy General Manager Kushan Samararatne.[/caption]
Speaking to The Sunday Morning Business, Samararatne stated that Ceylon coffee has the same potential as Ceylon tea to become an international brand of its own. This can be attributed to its higher quality compared to other coffee products that are currently available in the international market.
However, he explained that locally grown coffee is not being highlighted due to two reasons: High price due to high demand and low supply, and an inefficient internal industrial process.
“Right now, when you look at Sri Lanka, besides maybe one or two coffee processors who have gone into plantations, no one has given a significant effort to go and plant coffee up to the level of tea. Usually, you will find coffee plantations in areas like Matale, Nuwara Eliya, and Kotmale, where they will have a few coffee trees amongst some spices and other harvest.”
Samararatne stated that once a coffee tree is planted, it takes about two to three years to get the proper yield, after which the red cherry is plucked for optimal quality. In Sri Lanka, however, the process is to pluck the green cherries, which is the primary stage of the red cherry, process it into the green beans, and finally roast the beans before sending it into the market.
Therefore, the industry relies a lot on coffee farmers, according to Samararatne, and is at a stage where they have to go door-to-door collecting the coffee. This results in a lower supply of coffee, with both local and international demand increasing.
“Since India stopped exporting their coffee to Sri Lanka, even local demand has increased, but it is too expensive for the local market or even to compete in the international market.”
He stated that the reason for the high prices is that the process is ineffective, with the green cherry being bought from farmers at Rs. 100 per kilogramme, and the conversion of green cherry to green bean having a 1:10 ratio. He explained that if they were to export 1 kg of green bean, the raw material alone would cost them Rs. 1,000 before even adding in the transportation, packaging, and processing charges.
“If someone comes and offers the farmer Rs. 100 per kilogramme of green cherries, they do not care whether it is for the export market or local market. So the prices are currently high in the initial stage itself because the farmers are only looking at it from their point of view. In the larger context, there needs to be some sort of policy or pricing mechanism to solve this problem.”
Samararatne stated that in order for the local industry to compete in the international market, the first thing is to have a very competitive price; accordingly, that starts with having a green cherry to green bean conversion rate of at least 1:5 or 1:6.
He stated that another aspect the local industry needs to look at is maintaining a consistent quality. He explained that right now farmers sell the best-quality coffee, which is the red cherry; the average-quality coffee, which is the green cherry; and the worst-quality coffee, which is the overripe cherry.
“What is happening now is that farmers are selling anything they pick, and there are people to buy these as well. When they do this and mix all this excellent, average, and poor-quality beans together in one basket, everything just averages out and has an inconsistent quality to it.”
Samararatne stated that if the farmers were to specifically pick the good cherries and start processing them properly, Ceylon coffee will be of an excellent quality. He backed his statement up by pointing out that during an Australian Government-funded project which saw samples of Ceylon coffee being tested, the coffee’s cupping score, which is how they grade coffee, came to 90-plus, and this is branded as a “specialty coffee”.
He explained that this is why, as leaders in the local coffee industry, Colombo Coffee Company feels it is their responsibility to take Ceylon coffee to the next level. The company plans on going down to the grassroots level of the industry and investing in developing it from there.
He stated that they are currently working with coffee processors who collect the coffee from the farmers, and are trying to enter into an agreement where they only invest in the best-quality products.
“We are already working with some people from the Kotmale, Matale, and Nuwara Eliya areas to make this happen.”
Samararatne stated that this endeavour is supported by MDS, an Australian Government-funded organisation which goes to countries, selects a few industries with potential, and invests very deeply in them, while also giving them a proper understanding and plan to uplift the industry in a few years’ time.
“The idea here is to help Ceylon coffee as a whole industry grow. This is because when we look at our exports, we understand that the brand Ceylon coffee carries a lot more value than any individual brand.”
Speaking about changes that need to happen in a policy level, he stated that while Sri Lanka’s Export Development Board (EDB) has already got involved in the coffee industry by placing extension officers, they also need to come in and exercise their authority to create policy-level decisions for the farmers to follow.
“The Government already has several programmes which give farmers plants for free or at concessional rates, so they can also advise these farmers on selling the best-quality products.”
Once the initial issues facing the industry are sorted, Samararatne stated that the industry can start exporting to international markets including Europe, the Philippines, Indonesia, the Maldives, Malaysia, and even countries in the Gulf region, adding that our main competitors in the international stage would be other coffee-producing companies like Vietnam, Kenya, and India.
When entering the international market, he suggested that local exporters focus on being very price competitive and then focus on creating the Ceylon coffee brand reputation.
Samararatne explained that it will probably take the industry another two to three years to come to a meaningful level of exports, but that they hope to fast track it with the aid of coffee processors. He stated that if they are successful in entering into an agreement with the coffee processors, they can expect to start exporting at a small scale by either the end of this financial year or in the beginning of the next. However, scaling up coffee exports is expected to take at least another two to three years.
Colombo Coffee Company has also started a 100% locally sourced coffee brand called Toscana Ceylon. According to Samararatne, the brand also acts as a CSR (corporate social responsibility) project as the brand not only sources coffee locally from Kotmale, Matale, and Nuwara Eliya, but also helps farming families by providing them with school stationary and bags, and giving women in these areas an opportunity to work. The brand currently accounts for 15% of Colombo Coffee Company’s business.
“We are trying to develop the community and Ceylon coffee, together with our Toscana brand. But we cannot do this alone; other companies have to join us as well, if we are to promote Ceylon coffee as a brand.”