"That is coffee powder."
Translation:Tio estas pulvoro de kafo.
Because that would describe "powdery coffee" and the subject of Duo's sentence is the powder, rather than the coffee. Put another way, "coffee" is an adjective describing the type of powder in this sentence. "Tio estas kafa pulvoro" works.
Shouldn't be. Whole sentence is odd; "coffee powder" isn't really a thing in English. Ground, maybe.