|Title:||Brazil, Indonesia, Mexico, Vietnam, India green coffee total consumption, per-capita consumption, and consumption growth in bag units, kilograms, and percentages for 2006 and 2010|
|Source:||Tea & Coffee Trade Journal|
Start of full article - but without data
X X,XXX BAGS
COUNTRY 2006 2010
BRAZIL XX.XXX XX.XXX INDONESIA X.XXX X.XXX MEXICO X.XXX X.XXX VIETNAM XXX X.XXX INDIA X.XXX X.XXX
GROWTH RATE PER CAPITA COUNTRY PERIOD 2010 (KG)
BRAZIL XX,X% X% X,XX INDONESIA XX,X% X% X,XX MEXICO X% X,XX VIETNAM XX,X% XX% X,XX INDIA XX.X% X% X,XX
POPULATION GDP PER (MILLIONS) CAPITA COUNTRY (US$)
BRAZIL XXX XX.XXX INDONESIA XXX X.XXX MEXICO XXX XX.XXX VIETNAM XX X.XXX INDIA XXX * X.XXX
(Submitted by Coffee Confidential, compliments of P&A)
Producing countries already account for XX% of global coffee consumption. While world consumption grew from XXX million bags in 2009 to XXX million bags in 2010, a X.X% growth, the group of producing countries alone grew X.X%, totaling XX million bags in 2010.
Coffee Consumption In Producing Countries: Challenges For This Decade
Graph X (see next page) contains information about the countries that, together with Ethiopia, are currently the largest coffee consumers among producers: Brazil, Indonesia, Mexico, Vietnam and India. Coffee consumption has increased rapidly in these countries in recent times, especially from 2006 to 2010, and there are strong indications that it will increase even more in the future. These countries have large populations, booming economies, rising GDP and disposable income and Fast growing middle classes.
But things have not always been like that. With the exception of Brazil, where coffee consumption has grown steadily since the 1990s due to institutional programs funded by the industry first and also government later, coffee consumption in producing countries was stagnated for a long time, until 2003.
That year, the International Coffee Organization (ICO) hired P&A to create a Guide to Promote Coffee Consumption in Producing Countries based on the successful experience of Brazil. The methodology proposed by the Guide was used as the basis for programs to promote coffee consumption that P&A helped to develop in India, Mexico, El Salvador, Costa Rica and Colombia. As a result, coffee consumption growth accelerated in these countries and an additional annual demand for two million bags was created. These successful cases motivated other countries to promote coffee consumption. Consulting for the programs above confirmed that the strategies to promote coffee consumption can vary substantially from place to place and that institutional programs may not be required in certain cases, for example where coffee is new and trendy. The coffee industry in Indonesia and China is "generating" consumption by itself, without the need for institutional programs, because there is a natural enthusiasm towards coffee among local consumers.
On the other hand, in markets where coffee is already a traditional beverage drunk by most people, it is vital to have institutional programs that promote consumption and create more excitement around coffee. This is the case of Mexico, Colombia and Central America besides Brazil, where it all started. The main challenge to attract new consumers for coffee in producing countries lies on youngsters and the "emerging middle classes" that both have different preferences, interests and consumption patterns from those traditionally established. There is an evident need to adapt coffee products to these consumers' new life styles that translate into less time available and the demand for more convenience and practicality. Out-of-home consumption, specially in coffee shops but also in other food outlets, is important to reposition coffee as a sophisticated drink in these markets, while helping to drive at-home consumption and boost volumes among new and old consumers.
The strength of young consumers is notable in Indonesia, where a recent survey indicated that the country's consumption of "X in X" coffees--soluble coffee, non-dairy cream and sugar--is growing at a faster pace than soluble and roast and ground. "X in X" is a coffee favorite among modern urban Indonesian and Asian youth today.
The strength of the "new middle class" is notorious in China and India where hundreds of millions of people are being lifted into the consuming classes and coffee shop chains expand in the cities. Coffee consumption in India will soon reach two million bags per year with China already beyond the threshold of one million bags. Plans to expand coffee production in China will create further incentives for consumption. China and India are both expected to be net coffee importers as consumption becomes widespread.
[GRAPHIC X OMITTED]
The future of world coffee consumption depends on all markets: producing, emerging and consuming. Nevertheless emerging producing (country markets, led by the BIIC) Brazil, India, Indonesia and China, are likely to be the driving force behind the expansion of world coffee consumption in years to come. If the current trends persist, these four countries may exceed XX% of world coffee consumption by 2020 and push the participation of producing countries close to XX%.
Back To Basics: Coffee Yields And Sustainability
In round figures, Brazil and Vietnam produce almost XX% of the world's coffee but the area planted with coffee in these two countries accounts for only XX% of the world's total. With the help of statistics--production and planted area--and basic math, one concludes that whereas the average yield in Brazil and Vietnam is around XX bags/ha (X.XX tons/ha), the average for the rest of the coffee producing world is under X bags/ha (X.XX tons/ha). A closer view reveals that, to make matters worse, the lowest yields tend to be in some of the poorest coffee producing countries.
Dangerous as looking at "averages" alone can be, the calculations above send a strong message regarding sustainability. Can one expect coffee growers to be sustainable with low yields that directly affect their income and their ability to survive? In addition, low yields force growers to rely on more land to ensure survival with the risk of deforestation or encroaching on land that can be used for food production. Is this sustainable?
Can one expect a coffee grower to address environmental preservation or even attend to his or her social needs when income is not enough? By forcing growers to invest to address the environmental and social pillars of sustainability when income is at risk, are not sustainability platforms making growers worse off? The argument may go that sustainable coffee sells at a premium and that this premium should more than cover the investment in order to make the grower better off. Fine, if this is the case. But does this hold over rime, for the future?
It seems that besides setting codes and standards and measuring them in order to certify the product, which is an important achievement in itself, sustainability platforms should also address the basic issue of ensuring income to the grower. This will not be done by price premiums alone because in the mid-to-long run price premiums are likely to be squeezed by excess supply and then environmental and social requirements will become another cost.
What is the alternative? The figures at the beginning of this article show that sustainability platforms should also address the very basic issue of increasing yields, i.e., producing more coffee in the same area that the grower already has planted with coffee. How to do it? With technology! The examples of Brazil and Vietnam as well as those of other countries with high yields in the rest of the world (e.g.: Costa Rica) provide enough "food for thought" not to say benchmarking opportunities for sustainability platforms to consider, let alone for decision makers, researchers and extension services in low-yield producing countries to investigate, adapt and use. This may indeed be the duty of the latter--the coffee business in lowyield countries--but there may be also an important role for sustainability platforms to lead the process by including minimum yields in their sustainability codes and providing the necessary technical support for them to be reached.
This is all very polemical, but there is much room for a "green revolution", i.e., a yield revolution, in coffee production, with major impacts on the sustainability of growers ... and the planet too. Can the process of yield growth depicted in Graph X be duplicated in other countries?
How To Make Your "Coffee Id" Reach The Final Consumer?
Creating a marketing strategy for a single estate, a single origin coffee, or even for a whole coffee producing region is not an easy task. One of the most common mistakes is to treat marketing strategy as just advertising.
The other is to use strategies that are only applicable to intermediate industrial products. The difference is that your brand, your "coffee ID," will have to go through a long chain to reach the cups and the taste buds of final consumers. It is also common to see cooperatives, associations and farms trying to communicate with final consumers. This seems a good initiative at first sights but it is often naive, expensive and not efficient enough to capture the attention of consumers who are ever busier. A much better approach is to communicate with your real client, be it the coffee shop, the roaster, the importer or the exporter/trader, keeping in mind that the further down the chain you reach, the better your message will be transmitted and the greater the price premium is likely to be.
Messages get stuck in the middle of the chain because participants cannot see how your essential values, i.e., your coffee ID, can help them add value to their own marketing strategy. Of course, everyone agrees that specialty coffees, with history, shared values and quality, should command a premium price. But the premium price is the final result that can only be realized when your clients clearly perceive your values, your coffee ID.
The first step to communicate with your market is to understand what your clients really want. This is a matter of positioning yourself as the best option to respond to their demands. Do they need coffee for a blend? Do they need a sustainable/certified coffee to show commitment to consumers? Do they need a rare specialty option?
The second step is to adjust your production in order not to miss the point in the essential aspects of quality and supply: (X) stability of cup profile; (X) consistency in quality and volumes of each type of coffee produced; and (X) regularity of delivery, year after year.
The third step is to show to your clients that besides quality your coffee has values. It is important to have quality, but it is also important to "sell" quality, i.e., to communicate it properly to the client. It is also important to understand that once you start selling your coffee, you are already marketing your product and communicating with your business partner. So it is better to do it in the correct way from the beginning.
Consumers perceive quality differences in the cup and will always tend to associate these attributes with the origin of the product, e.g. French wines, Cuban cigars, Dutch beer, etc. If your marketing strategy is successful enough to have your origin (estate, association or region) identified in the coffee package, the consumer will be able to associate the brand and origin concepts with quality attributes. There is a willingness to pay for a differentiated coffee, and when consumers clearly identify your "coffee ID" in the package, you will be able to receive a premium price.
X X,XXX BAGS
COUNTRY 2006 2010
BRAZIL XX.XXX XX.XXX INDONESIA X.XXX X.XXX MEXICO X.XXX X.XXX ...