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The most consumed beverage in the world
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Sunday, 01 April, 2012, 08 : 00 AM [IST]
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Koushik S
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You walk out of the ‘hearth-warming’ comfort of the place you are put up at into the early morning chilliness of a hill station with little mist and cool climate and a familiar aroma whisks past your nose.
That’s the universal aroma of coffee that instigates the freshness and briskness for a long day at the office or something that recharges you, once you reach home after work.
Coffee is the most consumed beverage in the world - it is produced in over 70 countries, pre-dominantly around equatorial Latin America, South Asia, South-East Asia and Africa.
A farmer heads along with his mule to his coffee-drying patio looking to move his coffee cherries which have been left for drying and to save it from the looming rain. This coffee- grower of ours is already suffering from a shortage of coffee-pickers from the surrounding areas, and tags along to reach his coffee estate to start picking the coffee cherries for along with the rest of the labourers.
Challenges Faced
The challenges that are faced by these labourers are varied. To name a few, low cost for their produce, abysmal working conditions and bare minimum wages. The working conditions in these farms are harsh where people stay in temporary shelters in rows of bunk beds and it is the same water for them to wash, cook and bathe. There are a lot of corporate social responsibility activities that are taking place, which look into the working conditions of these labourers and things are beginning to look up.
Coffee being the second-most traded commodity in terms of monetary volume after crude oil is a big source of foreign exchange for quite a lot of developing countries.
Pricing Issues
Coffee that is coming out of Jamaica is facing pricing issues with the cost of production reaching an all-time high and diversification in the market. It has gone to the extent of Japan which used to import 90% of Jamaica’s coffee, has reduced it to about 40%. So the resulting situation is coffee that is grown, does not have a place to be sold. A possible solution to this problem would be to look for new and emerging markets.
Coffee being the mainstay of over 100 million people and most of them from poor countries, such falling prices give us opportunity to learn lessons. The recent crises the coffee industry is facing is a result of overproduction, falling prices and quality. This condition prevails even at the global level. As a result, industry participant and government bodies are beginning to address the problem. Another challenge facing the coffee industry is price volatility. It affects at two levels, at the macro level causing inflation and increasing political and food insecurity, at the micro level like stealing money from the livelihood of farmers.
10 Trends in Coffee
1. Innovation in Retailing
We have had our share of cup of coffee and salt and butter biscuit from the roadside coffeewala. But youth of today who are the majority of the population, are not looking for something which is so regular. They do not mind paying, but the catch is the concept that they want to experience. There are quite a few things that are being tried out:
Many retailers are serving coffee from more than one roasters. This gives them a chance to bring back a customer for a different coffee blend.
More people are beginning to realise the importance and the non-breakfast people are on the decline. So making coffee part of the breakfast combo would be the right thing to do.
2. Consumption of Coffee
The number of gourmet coffee-drinkers in the adult category reduced from 17% in 2008 to 14% in 2009, according to the National Coffee Association. But gourmet coffee- drinkers across all age groups increased from 32% to 40% across all age groups. The challenge is to retain the adult coffee-drinkers and to keep attracting the hep and happening youth crowd into coffee shops.
3. Consumer Behaviour
The general trend in coffee consumption has increased. The increase has been well distributed. There has been a 5% increase with coffees brewed at home and 10% more people are taking coffees in their flasks when they commute to work. The end-point is that packaged coffee has seen an increase in sales from 16.8% in 2008 to 17.3% in 2009, there has been a drop in coffee shop visiting from 12.5% to 12.1%.
4. Origin
5. Mermaid Manoeuvres
6. Speciality Tea
7. Tight Credit
Loans from banks have not been very forthcoming. Small business loans from large banks have been down by 4% and lending across all banks have been down by around 9%.
8. Sustainability and Staying Healthy
With the talk of carbon footprint becoming louder these days, it has become pertinent that we use our resources diligently. The retail outlets may consider giving discounts to people who bring their own mugs for coffee. Another aspect can be to switch off lights that are not in use in order to save current. Only when business operations are sustained, it becomes easier to adapt to regulations and legislations.
9. Grocery
Packaged coffee that has been bought from retail giants and supermarkets has seen a growth of 16.5% compared to 13% in the prior year. Another unexplored aspect of coffee retailing in selling liquid coffee of deli counters in supermarkets. All that the customer has to do is buy the liquid and make coffee at home.
10. RTD Coffee and Tea
Ready-to-drink coffee is another catching up trend where a lot of coffee houses have ventured into this line. Of course it is not a substitute to our good old freshly brewed coffee, but it comes very close.
To bring in an Indian perspective, the caffeine revolution of 2001 and the International Barista Championship in the same year has made the Indian coffee industry grow by leaps and bounds. The result of this revolution is what we see as more and more of coffee bars open up across all kinds of cities. Coffee has rather become an art form and it is that led to the International Barista Championship in the year 2001.
(The author is culinary operations officer at eatitude)
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