Global coffee market favoring higher quality, not higher volumes

NEW YORK, Oct 19 (Reuters) – The global coffee market is undergoing a transformational trend that will include higher quality and more expensive coffees but not higher total volumes traded as people increasingly use single doses and ditch traditional, large drop jars.

According to an industry expert, the COVID-19 pandemic kickstarted this movement as people were denied office coffee and started exploring new processes and qualities.

“There is no going back,” said Henrique Dias Cambraia, coffee producer, processor and president of the Brazilian Specialty Coffee Association (BSCA).

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“Coffee drinkers increased their knowledge, acquired equipment – they are willing to spend more for higher quality,” Cambraia said in an interview, adding that the market has seen the growth of single-dose offerings, with Keurig (KDP.O) dominating the US and Nespresso by Nestlé (NESN.S) leading in Europe.

“This trend will likely limit volumes because these processes use less coffee, but it will boost sales of more expensive specialty coffees,” he added.

The US National Coffee Association said in its latest data trends report in late September that 54% of Americans had at least one serving of specialty coffee in the previous week.

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Cambraia said the trend is stronger in richer countries, but also in emerging markets where there has been an improvement in incomes.

Farmers are aware of the change, he said, and are adapting to produce better coffee.

For example, Brazil, the world’s largest producer and exporter, which in the past was primarily a supplier of standard coffee, currently supplies several types of high-value products.

Cambraia estimates that around 20% to 25% of Brazilian Arabica coffee is currently considered a specialty. He expects this to increase as newer generation farmers gain knowledge of post-harvest processes to increase quality, such as B. fermentation, and apply this to family farms.

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Reporting by Marcelo Teixeira; Editing by Josie Kao

Our standards: The Thomson Reuters Trust Principles.

Marcelo Teixeira

Thomson Reuters

Covers agricultural commodities and biofuels, including manufacturing, trading and transportation, based in New York. Former Brazil correspondent and climate/environment reporter. Brazilian, holds a Bachelor of Journalism Degree and postgraduate studies in Environmental Reporting from Germany’s InWent Institute and Foreign Policy and International Political Economy from Harvard University. Enthusiastic football and tennis player.

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