Fresh from a rebrand and off winning two Great Taste awards in 2023 (for Little’s Smooth Colombian instant coffee and Little’s Creamy Caramel coffee pods), Little’s is now a thirty-strong team and is creating new jobs in Devon.

MD, Will Little, saw the potential in manufacturing in house and made the decision to champion British manufacturing and create local jobs.

Will Little, commented, “We’re so excited to announce we’re commissioning our own Nespresso capsule production line. Not only does this represent the most significant investment in the company’s history, but it also makes us the only brand of capsules in the UK to actually make their own capsules in the UK. By bringing this manufacturing in-house we’re increasing our agility, quality, profitability, and helping create jobs here in the Southwest.

“We’ve been working closely with two outstanding machine manufacturers to bring this line to life. Both based in Spain, we’re utilising the most up-to-date production technology including a cartoning machine built by renowned robotics experts IMASD. This will be the first machine of its kind in the UK and utilises cutting edge Siemens automation. This is all housed in our new 3,000 sqft facility dedicated solely to capsule production.

“The new line is now fully operational and will allow us to also offer own label and contract packing solutions in early 2024.”

Little’s flavour-infused coffee is vegan friendly, 4kcals per cup and contains no added sugar. Little’s is the first instant coffee in UK supermarkets to go 100% plastic free, instead utilising UK-made glass jars with UK-made aluminium lids, for freshness.

The Little’s range is available via the Little’s web shop or from Sainsbury’s, Tesco, Waitrose, Amazon, Ocado, Selfridges & Co, Harvey Nichols Harrods, Booths, Whole Foods and Holland & Barrett. Its prices vary from RRP GBP £4.99 for its 50g jar of Premium Instant Coffee, £3.50 for its flavoured instant coffees, £4.00 for a pack of ten capsules, and £3.29 for a 100g pack of ground coffee.

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“Even in an extremely competitive marketplace, demand for our coffee and tea products, especially our nationally famous Santa’s White Christmas coffee, is strongly combined with the ability to maximise and internalise usage of our high-capacity Dietrich roasting equipment,” stated CEO of Barnie’s Coffee, Ron Pecora.

In 2023 alone, more than 10 million cups of Santa’s White Christmas Coffee were consumed year-round. The total roasted coffee production in 2024 is projected to be more than 500,000 pounds.

Barnie’s Coffee & Tea Company, founded in 1980, offers whole bean and ground coffee, plus flavoured single serve cups. Next year, six new Limited Time Only flavours will be created and available to sip. Barnie’s Coffee plans to bring customer favorites back from the Barnie’s vault, too.

In addition to their online store, the 43-year-old company offers products on other online platforms such as Amazon and in select grocery stores like Publix and Winn Dixie throughout the Southeast. Barnie’s Coffee & Tea Company has a flagship café located in Winter Park, but also operates in collaboration with partnered cafés in the Orlando International Airport Terminal C, the Hitt Library at the University of Central Florida, Stetson University, Rollins College, Seminole County Schools, and the Orlando Science Center.

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Green Coffee Price
The ICO Composite Indicator Price (I-CIP) averaged 151.94 US cents/lb in October, a 0.8% decline from September 2023. The I-CIP posted a median value of 151.58 US cents/lb, having fluctuated between 145.99 and 160.09 US cents/lb.

The Colombian Milds and Other Milds increased by 0.5% and 0.2%, to 185.97 and 183.95 US cents/lb, respectively, in October 2023. The Brazilian Naturals presented the strongest growth of 0.9%, reaching an average of 155.52 US cents/lb. However, Robustas retracted 4.1% to 118.83 US cents/lb. ICE’s New York market grew by 1.5% whilst the London Futures market shrank by 3.4%, to 155.91 and 105.40 US cents/lb, respectively.

The Colombian Milds-Other Milds differential grew 38.5% to 2.02 US cents/lb. The Colombian Milds-Brazilian Naturals differential shrank 1.1% to 30.45 US cents/lb, whilst the Colombian Milds-Robustas differential also expanded 9.9% from September to October 2023, averaging 67.14 US cents/lb. Meanwhile, the Other Milds-Brazilian Naturals differential contracted 3.1%, reaching 28.43 US cents/lb. However, the Other Milds-Robustas and the Brazilian Naturals-Robustas differentials expanded 9.2% and 21.1%, averaging 65.12 and 36.69 US cents/lb, respectively, in October 2023.

Arbitrage, as measured between the London and New York Futures markets, widened by 13.7% to 50.51 US cents/lb in October 2023.

Intra-day volatility of the I-CIP remained stable at 6.3% between September and October 2023. The Colombian Milds’ and Other Milds’ volatility also increased to 6.8% and 7.6%. Meanwhile, the Brazilian Naturals’ volatility rose by 0.5 percentage points to 8.6% from September to October 2023. The Robustas presented the smallest volatility increase, with a 0.1 percentage point gain, averaging 7.5% for the month of October. The London Futures market’s volatility decreased by 0.6 percentage points to 6.7%. Lastly, the New York futures market’s volatility moved in the opposite direction to that of London, expanding by 0.4 percentage points and reaching 8.1%.

The New York and London certified stocks moved in the same downward direction, where London retracted by 7.9% to 0.67 million 60-kg bags, whilst certified stocks of Arabica coffee reached 0.44 million 60-kg bags, a 10.7% decrease and the lowest figure since October 2022.

Exports by Coffee Groups – Green Beans
Global green bean exports in September 2023 totalled 7.8 million bags, as compared with 8.83 million bags in the same month of the previous year, down 11.6%. For coffee year 2022/23, exports of green beans were down 5.5% to 110.81 million bags from 117.28 million bags in coffee year 2021/22. The global macro-economic environment was not conducive to consumer confidence in coffee year 2022/23, with global inflation and interest rates in many of the key advanced economies high and rising, increasing the cost of living and thus reducing disposable income levels for a very large section of the world.

These conditions seemingly support a downturn in the consumption of coffee and consequently in global exports of green beans. Nevertheless, the global economy was not only projected to expand in calendar year 2023, but the outlook was also raised between April–October 2023 by the International Monetary Fund (IMF), which suggests otherwise. The drop in global exports of green beans in coffee year 2022/23 may therefore lie more with logistics/the supply chain than the economy and actual consumption of coffee. Average green bean exports amounted to 118.13 million bags in coffee years 2018/19–2021/22, as compared with an average 109.59 million bags for coffee years 2014/15–2017/18, a jump of 8.54 million bags. This suggests a build-up of stocks in non-producing countries which have been heavily drawn down in the past 12 months.

Shipments of the Other Milds decreased by 13.1% in September 2023 to 1.57 million bags from 1.8 million bags in the same period last year. For coffee year 2022/23, exports of the Other Milds were down 12.1% to 22.11 million bags from 25.16 million bags in coffee year 2021/22. Green bean exports of the Brazilian Naturals decreased in September 2023, falling by 13.4% to 2.69 million bags. For coffee year 2022/23, exports of the Brazilian Naturals were down 8.5% to 34.17 million bags from 37.33 million bags in coffee year 2021/22. Exports of the Colombian Milds increased by 6.7% to 0.87 million bags in September 2023 from 0.82 million bags in September 2022. For coffee year 2022/23, exports of the Colombian Milds were down 11.2% to 10.77 million bags from 12.14 million bags in coffee year 2021/22. For coffee year 2022/23, total green bean exports of the Arabicas were down 10.1% to 67.05 million bags from 74.63 million bags in coffee year 2021/22.

Overall, for the Arabicas, exports were seemingly negatively affected by the drawdown of stocks in consuming countries, with buyers staying away from the markets in coffee year 2022/23. Furthermore, substitution towards the more competitively priced Robustas, induced by the increased cost of living and reduced disposable income, would have also added to the downturn (see Green Coffee Price).

Exports of the Colombian Milds fell below the 11.0 million bags mark for the first time since coffee year 2012/13. These exports were primarily driven by Colombia, the main origin of this group of coffee, and weather-related disruption affected supply throughout most of coffee year 2022/23. Indeed, Colombia’s green bean exports contracted for the first 11 months of coffee year 2022/23, with only September 2023 showing an expansion. Figures for the year show that, overall, the country’s exports declined 13.1% to 9.42 million bags, the first time they have dropped below 10.0 million bags since coffee year 2013/14.

Green bean exports of the Robustas amounted to 2.67 million bags in September 2023, as compared with 3.09 million bags in September 2022, down 13.8%. For coffee year 2022/23, exports of the Robustas were up 2.6% to 43.76 million bags from 42.66 million bags in coffee year 2021/22. Of the four groups of coffee, the Robustas were the only group to experience positive growth in coffee year 2022/23, benefitting from macro-economic-induced substitution away from less competitively priced Arabicas.

The September 2023 exports represent the lowest September volume for the Robustas since the 2.58 million bags shipped in 2012 and were a result of the 43.4% decrease in exports from Vietnam, the world’s largest producer and exporter of the group, which only shipped 0.81 million bags – the lowest September exports since 2008 (0.79 million bags). Vietnam has been struggling with supply since the start of Q4 of coffee year 2022/23, when very low in-origin stock levels were reported at a time when the start of the harvest still remained three to four months away. The low September 2023 export levels appear to be a continuation of the industry’s deepening struggle with supply issues.

Exports by Regions – All Forms of Coffee
In September 2023, South America’s exports of all forms of coffee decreased by 3.4% to 4.74 million bags. For coffee year 2022/23, the region’s exports were down 11.0% to 50.59 million bags from 56.83 million bags in coffee year 2021/22. The region’s two largest producers and exporters, Brazil and Colombia, saw their total exports fall by 7.9% and 12.8%, respectively. South America’s fortunes are closely tied to the fortunes of the Arabicas and many of the same factors that explain the latter’s double-digit fall also explain the former’s. After all, from coffee year 2018/19 to 2022/23, 93.2% of the total green bean exports from South America were Arabicas, on average. The drawdown of stocks in consuming countries and substitution towards the Robustas are the two main factors. Two specific and additional factors are that (i) Brazil’s export performance was poor due to its relatively limited supply following two consecutive years of below-par harvests; and (ii) Colombia struggled with weather-impacted supply conditions that negatively affected the origin’s export volume.

Exports of all forms of coffee from Africa decreased by 1.9% to 1.21 million bags in September 2023 from 1.23 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 1.4% to 13.53 million bags from 13.73 million bags in coffee year 2021/22. The relatively strong global demand for Robustas was the fundamental source of Africa’s positive export growth rate in coffee year 2022/23. Moreover, particularly during Q4 of coffee year 2022/23, the reduced volume of exports from the Asia and Oceania region, and more pointedly from Vietnam, strengthened Africa’s own export performance. Uganda, the largest producer and exporter of Robusta coffee in Africa, took the opportunity to fill the gap in the market left by Vietnam and the Asia and Oceania region as a whole.

In September 2023, exports of all forms of coffee from Mexico and Central America were down 9.2% to 0.74 million bags as compared with 0.81 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 3.1% to 15.3 million bags from 15.78 million bags in coffee year 2021/22. The downturn was primarily driven by Guatemala and Mexico, which suffered 11.5% and 16.5% decreases, respectively. However, the mitigating factor that limited the region’s fall in exports to a low single-digit decrease was Honduras’ 13.5% increase.

Exports of all forms of coffee from Asia and Oceania decreased by 35.7% to 1.91 million bags in September 2023 as compared with 2.98 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 0.9% to 43.56 million bags from 43.95 million bags in coffee year 2021/22. Asia and Oceania’s fortunes are closely tied to the fortunes of the Robustas and many of the same factors that explain the latter’s single-digit increase also explain the former’s. From coffee year 2018/19 to 2022/23, 89.1% of the total green bean exports from Asia & Oceania were Robustas, on average. In coffee year 2022/23, Vietnam’s exports were up 0.4% to 28.29 million bags from 28.19 million bags in coffee year 2021/22.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 27.3% in September 2023 to 0.75 million bags from 1.03 million bags in September 2022. For coffee year 2022/23, soluble coffee exports were down 5.7% to 11.47 million bags from 12.16 million bags in coffee year 2021/22.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 8.7% in September 2023, down from 10.4% for the same period a year ago. For coffee year 2022/23, soluble coffee’s share of the total exports was 9.3%, the same as in coffee year 2021/22. Brazil is the largest exporter of soluble coffee, having shipped 0.27 million bags in September 2023 and 3.77 million bags in coffee year 2022/23.

Exports of roasted beans were down 26.7% in September 2023 to 55,203 bags, as compared with 75,355 bags in September 2022. For coffee year 2022/23, roasted coffee exports were down 16.0% to 0.71 million bags from 0.84 million bags in coffee year 2021/22.

Production and Consumption
Under the current circumstances, the estimates and outlook of production and consumption for coffee years 2021/22 and 2022/23 remain the same.

World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in a number of key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23. Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23.

The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year. Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built up during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22. Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). To download the full CRO or for more information, visit the ICO website: icocoffee.org.

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Global coffee production for 2019-2020 dipped 2.5 per cent to 168.84 million bags compared to the previous year, except for Africa where green coffee-producing countries posted an average modest growth of 0.5 per cent for the period, according to the International Coffee Organization (ICO).

Africa’s production of green coffee has been fluctuating in the last few years with new projections of a 0.3 percentage point decline from 19.33 million bags in 2020-21 to 19.27 million bags for the 2021-22 coffee year. The projections may be slightly above or below the actual output figures once the production figures across the continent are confirmed.

Previously, the ICO said production of both Arabica and Robusta in Africa increased by 7 per cent between 2017 and 2019, from 17,354 thousand 60-kg bags, an output that declined by 1 per cent between 2019 and 2020 from 18,686 thousand 60-kg bags to 18,514 thousand 60-kg bags.

On average, the decline in production between 2017 and 2020 among Africa’s coffee producers was 0.9 per cent, with the biggest individual drop for the 2019-20 period being notable in Burundi (-6.4 per cent), Cote d’Ivoire (-8 per cent), Kenya (-8.1 per cent) and Rwanda (-8.3 per cent) according to the May 2021 ICO statistics.

Favourable conditions for growth

Despite the slight dip in production for the 2019-20 period, a growing domestic coffee consumption rate, an increasing demand for Africa’s green coffee in key markets such as Europe, favourable weather conditions and elaborate coffee nursery programmes to replenish ageing farms, especially in Uganda and Ethiopia, could keep the continent’s green coffee output steady in the long term.

Demand for green coffee output in Africa is lately being driven by the surge in the continent’s consumption levels, currently estimated at 7 per cent of the total global intake. Coffee consumption has grown by 3.2 per cent since the 1990-1991 when 4.9 million bags were consumed to 11.67 million bags in the 2018-19. Nearly 70 per cent of this consumption is in Algeria, Ethiopia, South Africa, Morocco, and Egypt.

Elsewhere in the global market, consumption in 2019-20 period dropped by 0.9 per cent to 167.59 million bags, hence easing demand on green coffee supplies. The opposite is true of Africa for the same period where demand for green coffee was estimated at 12.02 million bags for the 2019-20 when domestic coffee consumption surpassed 11.67 million 60-kg bags with more than 70 per cent of it consumed in Ethiopia, Algeria, Morocco, South Africa, and Egypt.

Although the Covid-19 pandemic appeared to suppress consumption in markets such as Uganda due to prolonged lockdowns, Africa’s consumption is expected to grow by 2.4 percentage points to 11.7 million bags from 11.4 million bags in 2020-21 according to the ICO.

Coffee drying in Uganda. Image: Jada Coffee Uganda

Moreover, demand for green coffee within the African market is expected to grow even further, driven by the expanding urban population, especially in sub-Saharan Africa (SSA). The World Bank estimates SSA’s urban population to have grown from 209 million people in the year 2000 to 469 million people in 2020—a 41 per cent increase. This urban population growth is linked to the increase in coffee consumption in the region and the subsequent demand for more green coffee, hence fuelling output.

Furthermore, there is continued demand for Africa’s green coffee in leading coffee-consuming markets such as EU-28 that could trigger the desire to ramp up production of green Arabica and Robusta coffee to meet requirements of international buyers. For example, the European Coffee Federation says between 2016 and 2018, Africa’s top green coffee producers including Uganda, Ethiopia, Kenya, Tanzania, Cote d’Ivoire, Cameroon, and Burundi sold 328,545 tonnes to the EU-28 market with Ethiopia and Uganda being the top suppliers.

Mixed results among top producers

Green coffee production among Africa’s top producers paints a picture of mixed performance for the period between 2017 and 2020 when Ethiopia and Uganda reported a modest increase in output while Cote d’Ivoire, Kenya, Democratic Republic of Congo (DRC), Tanzania and Guinea reported a decline, particularly between the 2019 and 2020 harvesting period.

Ethiopia, Africa’s largest green coffee producer and consumer of processed coffee, has enjoyed steady growth in production for three years to 2021 driven largely by the presence of suitable growing conditions with projection indicating the country’s output could reach 7.62 million bags during the 2021-22 year, with up to 55 per cent of the production expected to be consumed domestically according to USA’s Department of Agriculture (USDA).

Between 2019 and 2020, Ethiopia’s production grew 0.4 per cent lower than the 1.2 per cent to 7.55 million bags earlier projected by ICO. This modest growth in output coincided with the enactment by the Ethiopian government of a new marketing and export policy that allows direct coffee exports by smallholders with minimum of two hectares of land and by commercial farms to“encourage vertical integration and improve coffee traceability,” according to USDA.

Growth in coffee production was also reported in Uganda for the 2019-20 period when the landlocked country reported a 2 per cent increase in output to 5.62 million bags according to ICO statistics, up from the previously projected 1 per cent surge to 4.75 million bags. The output was expected to reach 6 million bags during the 2020-21 coffee year supported largely by the maturity of new coffee plantings under a state-sponsored plan for farmers to take old trees out of production via stumping according to projections by USDA.

“We have seen coffee production increase from 4.2 million 60-kg bags in 2015-16 to 8.06 million bags in 2020-21 while coffee exports have increased from 3.6 million 60-kg bags in 2015-16 to 6.1 million 60kg bags in 2020-21,” said Emmanuel Iyamulemye, managing director, Uganda Coffee Development Authority.

He said that this is mainly attributed to the planting of new coffee trees. “Cumulatively, 1.167 billion coffee seedlings were generated and distributed between 2015-16 and 2020-21.”

In Côte d’Ivoire, one of West Africa’s top Robusta coffee producers, known to be of medium quality, the output declined by 8 per cent between 2019 and 2020 to 1.8 million bags defying predictions by ICO of a 4.1 per cent dip in production that could have totalled 2 million bags. The country had reported a 41.6 per cent increase in output to 2.09 million bags in 2018-19.

Guinea, one of Africa’s smallest coffee producers, posted the biggest decline in output by 15.9 per cent between 2019 and 2020 from 178,000 bags of green coffee to 150,000 bags. However, green coffee production statistics for Guinea have remained inconsistent with one report saying the only consistency is “the fact that production volumes have been low.”

Coffee pickers carrying dried coffee in Kenya. Image: Rainforest Alliance

Some of Africa’s bigger green coffee producers including Kenya, and the Democratic Republic of Congo (DRC) also reported a decline in output of 8.1 per cent and 4 per cent respectively between 2019 and 2020.

This decline in output for Cote d’Ivoire, Kenya, DRC, Tanzania, and Guinea seem to have partially been compensated by the positive growth in production by Rwanda, Cameroon and Uganda at 6.3 per cent, 4.4 per cent and 2 per cent, respectively.

A bright future

Africa’s green coffee production and uptake, similar to many coffee markets globally, was impacted by the Covid-19 pandemic that the ICO says caused “unprecedented joint supply and demand shock to the global coffee sector.”

The Covid-19 pandemic not only triggered a competitive coffee price regime in the global market but also constrained supplies, especially in 2020 and 2021, due to pandemic containment measures, including cessation of all forms of transportation. In addition, the pandemic ushered in a new normal where unprecedented lockdowns led to a general increase in home coffee consumption as nearly all hotels, restaurants and catering services remained closed, and a huge portion of the working class was restricted to working from home.

According to 2019-20 ICO chairman Iman Pambagyo, “the pandemic aggravated issues such as the coffee price volatility, thus generating instability and uncertainty.”

The future of Africa’s green coffee production and trade looks bright especially with the ongoing coffee farm programmes such as the current stumping in Uganda and Ethiopia as well as the emerging demand-trigger trends such as the expanding middle-class segment of the population in Africa and the entrenched café and coffee shop culture in consuming markets that rely on Africa for coffee supply such as the Middle East and Europe.

• Shem Oirere is a freelance business journalist based in Nairobi, Kenya. He has spent more than 25 years covering various sectors of Africa’s economy including the region’s agribusiness. He holds BA in International Relations and Diplomacy from the University of South Africa and earned a higher degree in journalism from the London School of Journalism and is also a member of the Association of Business Executives (ABE).

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“Coffee Support helps brands efficiently scale their business avoiding the cost and risk of expansion by offering the first of its kind one-stop-shop,” said Jason Kyle, CEO of Coffee Support. “Our 40,000 square-foot state-of-the-art facility allows detailed control from start to finish.”

Coffee Support begins with a mission-driven coffee importing division where traceable coffees from farms around the world are sourced and secured. Coffees are then roasted using environmentally friendly and ultra-consistent 70 kilogram single bag Loring roasters. Cold Brew customers enjoy brewing and canning in a climate-controlled environment using the industry’s latest brewing equipment. The one-stop-shop improves expenses, logistical issues, delivery times, and most of all quality. Gone are the days of multiple vendors needed to create and package products.

If hands-on roasting is your hurdle, you can remotely control and view the Loring roasters in real-time from your location anywhere in the world. Coffee Support says it is committed to working with brands that value quality.  An extremely clean and welcoming co-op facility approach helps to create coffees that are second to none. All services are also offered individually.

Sourcing

Whether businesses are looking for a 90+ point coffee or just a daily drinker, Coffee Support can source the perfect coffee by utilising its network of farm direct relationships. Clients of Coffee Support have direct access to the same relationships, adding value to the story of their coffee. Using these coffees is not a requirement. Some clients simply send coffee to be roasted and packaged. Either way, Coffee Support’s on-site green coffee storage facilities are climate controlled to ensure raw coffee is managed with care.

Roasting

The Coffee Support roasting staff has years of experience and a passion for the art of coffee. Whether using the lab to create a new custom profile or using a tried and true blend, the multiple Loring S70 single bag roasters and staff will maximize quality and consistency. For clients who have exacting roast standards requiring their direct interaction during the roast process, Coffee Support offers both onsite and remote roasting interfaces. This gives roaster clients as much hands on interaction as they desire while Coffee Support does the heavy lifting.

Cold Brew 

The on-site, no expense spared Cold Brew facility is second-to-none, according to Coffee Support. The brewing process starts in a climate-controlled environment using a water purification system that produces Specialty Coffee Association standard mineralisation which is 100% microbial free. The unique pasteurisation system flash pasteurises and cools product instantaneously. Flavour and quality denigration are no longer an issue while creating products superior to many of those on the market today.

Packaging

Several packing and canning formats are offered by Coffee Support. Customers with their own packaging can take advantage of storage solutions to shorten lead times and cut costs.

Coffee Support is located in Phoenix with roasting availability for new clients beginning 1 September 2021.

For more information, visit: www.coffeesupport.com

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Véléz noted that although the weather has not been the best in many growing areas throughout Colombia, the coffee quality has been good, and the FNC is expecting the volume of coffee to be similar to last year with a production of 14 million bags (60 kg). He added that Colombia is dealing with many challenges including the peso being down and Covid is now moving from more urban areas to more rural ones.

Hernando Duque, the FNC’s chief technical officer, provided a coffee production overview, sharing that the projection for the first semester of 2021 is more than six million green bags. Broken down by geographical zones, the estimated crop production in Colombia is:

• Center: 3,441,249 bags — up 56.8%
• North: 219,072 — up 3.5%
• South: 2,399,824 — up 39.6%

In the last phytosanitary survey, which was conducted in January, Duque reported that there are no problems in the short term. The national coffee berry borer – the main coffee pest in Colombia – average infestation was 2.03%, which is a low level. The national average infection of coffee leaf rust was 6.5%, which is almost normal. He said that although this is not a high infection level, it’s being monitored carefully.

Regarding labour availability, there are minimal difficulties. For coffee harvesting (national level week 16), 89% of producers claimed they have enough labour, with 11% saying they have insufficient labour. Duque said there is also a normal supply of labour for agronomic management of the crops, with 88% reported having enough, and just 12% saying that they have insufficient labour.

There are also no problems related to coffee commercialisation at farm level, that is, producers can pay for labour. “Up to this week [16], there are no major problems to face, at national level, that could bring risk to the mid-term crop,” said Duque.

Juan Camilo Ramos, chief commercial officer of the FNC, provided a logistics, operational, commercial update, sharing that the FNC has been working hard to secure coffee supply while generating value for Colombia coffee growers.

He said that although coffee production in 2020 decreased by 6% compared to 2019, the 2021 crop is already higher than the same period in 2020 (up 2%) and exports have also been higher (up 4%) during coffee year 2020/2021 vs 2019/2020. Illustrating how coffee consumption is developing in the world, Ramos noted domestic coffee consumption in 2020 increased by 12.4% compared to 2019.

“The internal coffee flow in the first months of 2021 has been much better than last year,” said Ramos. “We have been able to maintain our operations in warehouses, milling plants, roasting plants, and Buencafé’s freeze-dried factory.” He added that they have also been able to deliver coffee to the three main ports resolving initial limited transport problems, representing a 39% increase in deliveries to ports vs 2020 during the same period (March to April), which they have been able to do despite logistics operations being severely impacted in 2021 — 47 vessels cancelled or rescheduled resulting in 171 containers being affected.

Ramos pointed out that as world coffee consumption is growing and the demand for high quality coffee continues to increase, producers are embracing higher quality. Furthermore, internal prices have peaked during the pandemic and are considerably higher than previous years. Another important trend is that as Colombia’s domestic consumption is becoming stronger, local roasters are providing higher quality coffee, more specialty coffee, “which is why we see consumption growing,” Ramos explained.

Juan Estaban Orduz, president, Colombian Coffee Federation, Inc, the North American subsidiary of FNC, said that the third World Coffee Producers Forum will take place in two parts, with the first being held virtually on 15 July. Part two will be held in person in July 2022 (location TBA at a later date).

• Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
  Keep in touch via email: vanessa@bellpublishing.com
  Twitter: @TCTradeJournal or LinkedIn: Tea & Coffee Trade Journal.

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To drive the immediate and urgent individual and collaborative efforts needed to meet this 2050 goal, members of the Challenge announced the following targets for 2025:

• Restore 1.5 million hectares of tree cover and protect 500,000 hectares of forest, securing 100 million tonnes of carbon dioxide;
• Meet the growing global demand for coffee by increasing smallholder production by 7% (11.9 million bags) through renovation, rehabilitation and investments on existing farms;
• Fully protect the labour rights and wellbeing of coffee workers and establish living income and wage benchmarks in at least 80% of ICO member producing countries and initiate public-private interventions to close and surpass living income and wage gaps;
• Ensure that at least 50% of global coffee purchased by roasters and retailers is sourced according to sustainable practices that protect the labour rights of farmers and workers, conserve natural resources and provide benefits back to communities where coffee is produced.

The goals and 2025 targets were agreed to at a virtual gathering of the Challenge’s members, held on Monday 7 December 2020.

“With nearly 160 members from across the coffee sector, the Sustainable Coffee Challenge is uniquely positioned to work together to achieving coffee’s enormous potential to provide livelihoods for millions, help stabilise the climate, and help engage billions of coffee consumers in the quest for a more sustainable future,” said Bambi Semroc, acting senior vice president, Center for Sustainable Lands and Waters, Conservation International.

To meet growing global demand, coffee production is expected to double by 2050. Without improving growing practices, that could mean the destruction of millions of hectares of carbon-rich forests to make room for coffee crops. However, if grown sustainably, coffee could instead serve as a “natural climate solution” says Shyla Raghav, Conservation International’s vice president of Climate Solutions. According to research led by Conservation International’s Bronson Griscom, these solutions, which include the protection, restoration and improved land management of carbon-rich landscapes, could deliver at least 30% of emissions reductions needed by 2030 to avert climate breakdown.

“The coffee sector has a choice to make, to either be a driver of the climate crisis – or serve as a climate solution. Coffee is produced in landscapes that, if more sustainably and effectively managed, can actually sequester carbon. By optimizing the production of coffee, we build a more resilient and secure future for us all,” said Raghav.

Yet achieving this potential will remain elusive without also improving the livelihoods and well-being of coffee farmers – an effort that is central to the work of the Challenge. “Farmers must first be able to provide for themselves and their families,” said Semroc. “Otherwise, labour abuses and unsustainable practices will continue.”

“We are setting an ambitious goal so farm workers in coffee can receive a living wage,” said Miguel Zamora, director of Markets Transformation at the Rainforest Alliance in a recorded message to the Challenge’s virtual gathering. “All coffee families should have access to healthy food, clean water, decent housing, education for their children and access to health care. We all deserve the chance to thrive from coffee.”

In joining the Challenge, partners commit to contributing in four action networks: sustainable sourcing; resilient coffee supply; farmer and worker well-being and prosperity and forest and climate.

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The monthly average of the ICO composite indicator rose by 1.3% to 116.25 US cents/lb in September 2020. While prices have increased, they remain low compared to the long-term average of 135.34 US cents/lb between 2007 and 2018. The daily composite indicator started on a high note, remaining above 120 US cents/lb until 14 September, when it fell to 116.97 US cents/lb. It continued to fall during the rest of the month, reaching a low of 108.09 US cents/lb on 29 September. The Brazilian real also fell from mid- to late-September, erasing the gains made over the preceding three weeks.

Prices for all group indicators rose in September 2020 for the third consecutive month, though at a much slower rate compared to August. The largest increase occurred in the average price for Other Milds which grew by 2% to 166.56 US cents/lb. Colombian Milds increased by 0.7% to 168.36 US cents/lb. As a result, the differential between Colombia Milds and Other Milds decreased by 54.7% to an average of 1.80 US cents/lb due to tightness in supply of Other Milds compared to Colombian Milds. Brazilian Naturals rose by 1.8% to 113.81 US cents/lb, and Robustas by 0.1% to 72.77 US cents/lb. The average arbitrage in September, as measured on the New York and London futures markets, rose by 1.1% to 58.73 US cents/lb. After falling for seven consecutive months, stocks of certified Arabica increased by 68.7% to 2.45 million bags in September 2020 compared to August 2020.

Certified Robusta stocks amounted to 1.85 million bags, unchanged from August 2020. Additionally, the volatility of the ICO composite indicator price decreased by 0.2 percentage points to 8.7%. The volatility for Colombian Milds remained unchanged at 8.5%, but the volatility for Other Milds fell by 0.5 percentage points to 8%. Brazilian Naturals volatility declined by 1.2 percentage points to 12.3%, while the volatility for Robusta prices increased by 2.1 percentage points to 8.4%.

In August 2020, world coffee exports fell by 7.5% to 10.04 million bags compared to August 2019. This was the lowest volume of shipments in August since 2015 when exports totalled 9.14 million bags, and may indicate a decline in demand, particularly as prices have increased in recent months while the outlook for global economic growth remains bearish. Shipments of Arabica fell by 6.7% to 6.35 million bags, and Robusta exports decreased by 9% to 3.69 million bags. Other Milds recorded the largest decrease in August, falling by 10.2% to 2 million bags. Exports of Colombian Milds fell by 8.4% to 1.19 million bags, and Brazilian Naturals declined by 3.6% to 3.16 million bags.

From October 2019 to August 2020, global coffee shipments fell by 5.6% to 116.54 million bags compared with the same period in coffee year 2018-19. In the first eleven months of coffee year 2019-20, Robusta exports recorded the smallest decrease, declining by 2.6% to 44.61 million bags. Shipments of Other Milds fell by 9.7% to 23.42 million bags, Colombian Milds by 6.8% to 12.93 million bags and Brazilian Naturals by 6% to 35.58 million bags. Global output in 2019-20 is estimated at 169.34 million bags, 2.2% lower than in 2018-19. Arabica output is estimated to decrease by 5% to 95.99 million bags, while Robusta output is expected to rise by 1.9% to 73.36 million bags. The decrease in output is attributed primarily to the reduction in Brazil, as this was an off year for its Arabica production, as well as to the ongoing low prices. Harvesting in most countries had already concluded by the time the pandemic occurred.

Production in the five largest producing countries increased in 2019-20, except for Brazil, which accounts for around 35% of global output. In 2019-20, Brazil’s Arabica crop was in the off year of its biennial cycle, and the total harvest is estimated at 58 million bags, 10.9% less than in 2018-19. Brazil’s Arabica output declined by 17.4% to 37 million bags while its Robusta output rose by 3.4% to 21 million bags. Vietnam’s harvest is estimated at 31.5 million bags in 2019-20, 0.7% higher than last year. Colombia’s total production in 2019-20 is estimated at 14.1 million bags, 1.7% higher than in 2018-19, as strong growth in the first three months of the coffee year was followed by falling prices and adverse weather. After three years of decline, production in Indonesia is estimated to rise by 16.5% to an estimated 11.2 million bags in 2019-20 due to beneficial weather. Output in Ethiopia has grown steadily after falling by 19% to 5.56 million bags in 2010-11, and in 2019-20 is estimated to increase by 2.1% to 7.7 million bags due to beneficial weather and adequate rain.

Heading into 2019-20, global demand for coffee seemed strong following coffee year 2018-19 when world consumption grew by 4.3% to 168.7 million bags, which was well-above the long-term average of around 2%. However, in 2019-20, global coffee consumption is estimated at 167.81 million bags, 0.5% lower than last year. While there was a surge in demand at the start of the pandemic from panic-buying and stockpiling, consumption in the remaining months of the coffee year is estimated downwards due to ongoing pressure from a global economic downturn and limited recovery in out-of-home consumption, particularly as many countries are starting to experience a second wave of covid-19 at the end of the coffee year.

Compared to the previous year, demand in the top five consumers, which represent 63.7% of global consumption, slowed considerably in 2019-20. After two years of strong growth, consumption in the European Union is estimated at 45.04 million bags, 1.3% lower than last year. In the United States, the world’s second largest consumer, demand is estimated to fall by 0.6% to 27.58 million bags while consumption in Brazil, the third largest, is estimated to decrease by 0.9% to 22 million bags. Demand in Japan is estimated at 7.5 million bags, 0.8% lower than in 2018-19, while consumption in Indonesia is estimated to fall by 1% to 4.75 million bags.

Although both production and consumption decreased, 2019-20 is seen in surplus, with global output exceeding consumption by 1.54 million bags. The ICO composite indicator reached 107.25 US cents/lb in coffee year 2019-20. This compares to an average of 100.47 US cents/lb in 2018-19 when the surplus reached 4.4 million bags. This surplus, coupled with the majority of Brazil’s 2020-21 crop, an on-year in the biennial Arabica production cycle, reaching the market in the next few months, will limit further recovery in prices.

For more information, visit: www.ico.org.

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Available for mobile devices and desktop computers, TCCA tracks the entire cycle of coffee operations and production, from farming to processing to purchasing. By improving coffee farm production at the source, the application increases efficiency and provides insight into the entire process as a complete resource for capturing data to ensure quality product. TCCA also helps track the authenticity of the origin of the coffee source, including verifying organic certification and the region in which it was produced.

“TCCA is the most comprehensive application for farmers, as a key data resource while also creating essential connections in the process of moving coffee from point to point,” said Jean Orlowski, ECropOrigin founder.

“The ability to trace the process from the field all the way to the cup of coffee people are drinking, ensuring quality and authenticity, is a valuable asset to coffee production that builds trust in the industry.”

TCCA’s interface provides inventory management, reporting and accounting tools, and increases transparency and interaction to all involved in coffee production, including:

• Farmers, who can utilise real-time dashboards to create logs and records to track all parts of farm procedures, processing, inventory and accounting, providing valuable information that can improve a farm’s bottom line; convenience of mobile application in the field. The TCCA app is free for farmers.
• Brokers or Buyers, who can see logs created by farmers including details on picking dates, types and regions; able to purchase directly or create purchase requests through TCCA. The application automatically updates inventory availability.
• Roasters, who can track company inventory to see availability of coffee beans by region, including type – whether cherry, parchment, or green – as well as grade and origin.

• Consumers, who view QR codes on coffee packaging that trace the farm origin and provide historical data, including picking date or organic certification.

A screen grab of a picking log in the TCCA app.

A screen grab of work logs in the TCCA app.

For more information about ECropOrigin’s new app, visit: ecroporigin.com.

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Rooke joins the BCA following 25 years at the Agricultural Industries Confederation (AIC) where he held the position of head of policy and external relations. His new leadership appointment comes at a crucial time for the UK coffee industry as the deepening impacts of Covid-19 are felt and as Brexit negotiations start to shape future trade, tariffs and labour movement and environmental policy continues to shape the UK’s circular economy and infrastructure.

Commenting on his appointment, Rooke said, “The coffee industry is, like many other sectors, facing a period of massive upheaval and business uncertainty from Covid-19. Coffee is an everyday part of so many peoples’ lives and we will be looking to ensure its production and availability to customers can be maintained during this very difficult period and those members whose businesses are facing immense pressure can get some respite from the measures Government is introducing.

“Whilst I am of course excited to be joining the UK coffee industry, we recognise that there is an immediate need to support our members, and UK coffee, through this crisis.”

2020 will also see several key government resources and waste consultations on the environment and packaging, along with ongoing work for the BCA around wider sustainability issues such as improving the resilience of coffee farmers and driving responsible sourcing practices across its supply chains.

At the start of the year, the BCA Board developed an ambitious set of new objectives and goals for the association that will provide new routes to growth, expand capabilities and continually improve the relevance of the association for its members. These renewed objectives will be pivotal to Rooke’s role in moving the organisation forward.

BCA chair, Thomas Blackwall, commented, “Paul’s extensive background working in policy and external affairs for wider trade associations will be hugely beneficial for the BCA, we couldn’t be happier that he has accepted the role.

“With Paul coming on board we will start to see the BCA go through a rapid phase of expanding capability, building capacity and becoming an even stronger voice for the UK coffee industry. This is even more important given the business impacts from the coronavirus crisis and in prioritising the health, safety, and wellbeing of people working throughout the coffee sector.”

Rooke will report into the BCA chair and board and will work closely with the heads of the BCA Committees, notably across Technical & Regulatory, Sustainability, Communications, and Trade & Logistics.

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Those in the coffee industry are responsible for making sure all products leaving our manufacturing centers undergo the strictest quality control processes which, as we know, is absolutely essential since the goal is to provide a consistent, high level product each day to coffee lovers all over the world.

One way to deliver a safe and consistent product is to have a strong Quality Control Culture and Program in place and working reliably. Quality Control involves having multiple procedures to confirm the products we make are food safe and that the taste, feel and smell of our products are always outstanding.

At Aspen Coffee, for example, our coffees stay in storage for several days after production so that we can evaluate anything that could potentially harm our dedicated and loyal customer base. Critical control points must be established to make certain customers are satisfied with the final product and that the coffee they have purchased tastes exactly as expected. The process is applied from the time the green beans arrive at our facility through roasting and processing.

In the case of producing cold brew coffee, ready-to-drink beverages should never leave facilities without measuring microbial counts no less than 48 hours after production. In addition, production and quality assurance teams should ‘cup’ (taste) all ready-to-drink products before leaving the facility to ensure high product standards.

Another key aspect of quality control is addressing customer service issues since there are always issues that arise. In order to provide excellent customer service, all problems must be addressed quickly and efficiently.

Quality control also plays an important role in new product development so that all new products are produced with the highest quality. Companies need to spend significant resources in developing customised coffees that meet their customers’ needs. This is accomplished by listening to your customers:

• What are your customers trying to accomplish?
• What flavours are they trying to create between sometimes proprietary coffee blends, roast levels and types of coffee?
• How can you help your customers create an emotional connection with consumers?

None of this happens by accident. At Aspen, our product development teams spend weeks, months and sometimes years working with all levels of coffee expertise to create special products. We do this because we have passion for what we do and a desire to create something unique.

In conclusion, Quality Control is all about certifying that coffee manufacturers produce a consistently high quality product every time, whether we spend time creating a customised and special product or simply using our current offerings. Creating trust with an expectation of greatness is what we as coffee manufacturers do.

This week’s guest blog is contributed by Dan Weingart. Dan is the chief commercial officer of San Antonio, Texas-based Aspen Beverage Group which has been providing customer coffee solutions since 1993, specialising in coffee extracts and concentrates.

Image courtesy of Andy Upton

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Brazil’s ample agriculture sector is subject to strict environmental laws. Large coffee farms take these norms especially seriously, knowing that the best practices of a single estate can impact thousands of hectares of ecosystems and human health in an even greater radius.

Ecoagricola grows coffee in the Serra do Cabral plateau at 1,100 meters above sea level in the Chapada de Minas region of Minas Gerais. “Our family has farmed these lands since the 1970s, always with a sustainable and preservation-oriented approach. We preserve large areas, almost half our property, such as the Borralha Private Nature Reserve, which includes more than 2,000 hectares of land,” offered Ecoagricola’s founding partner, Marcelo Flanzer.

Created by legislation enacted in 2012, the Rural Environmental Registry (CAR, Cadastro Ambiental Rural) is an electronic public register within the scope of the National Environmental Information System – SINIMA. Farms register with CAR to record environmental information, including Permanent Preservation Areas, native vegetation, forest preserves, and to combat deforestation.

“The Borralha Reserve is full of trees, streams, and animals, such as the concolor puma, which is the top of the food chain and proof that the ecosystem is well preserved,” said Flanzer. “This area is a refuge to birds that migrate from north to south. Year-round, we [maintain a] native species nursery and donate seedlings to neighbours, city councils, parks, and schools to develop nature education programs.”

Ecoagricola’s irrigation is made with pivots in the low-energy precision application system and every plant receives just the water it needs. “We pump the water during the night when energy costs are lower and keep it in reservoirs at the top of the farm. When we need to irrigate, we use gravity, saving energy and resources.”

Institutional Support and Collaboration

In the Cerrado Mineiro region, the Cerrado Coffee Growers Federation, which is a federation of seven cooperatives, acts as a liaison between producers and entrepreneurial and agricultural support organizations. To promote both sustainable farming practices and the production of quality coffees among its members, the Cerrado Coffee Growers Federation collaborates with EPAMIG (Minas Gerais state research institute) and SEBRAE (Brazilian support service agency for small business).

“The coffee cultivars validation project aims to test and analyse the productivity, cupping profile, pest and disease resistance, and agronomic characteristics of commercial farm management,” said Juliano Tarabal, director of the Cerrado Coffee Growers Federation. “The purpose is to generate reliable data for new planting recommendations.” The project is now in its fourth year with 16 participating towns and 12 varieties planted in each.

The Cerrado of the Waters Consortium is a collaborative public-private platform “to strengthen the coffee sector’s actions regarding the challenges of reconciling agricultural production and the conservation of biodiversity and ecosystems,” explained Tarabal. “The project started at the end of 2015 with the revitalization of the water supply for the city of Patrocinio and can be replicated in other cities.”

In addition to assisting producers in maintaining sustainable practices, the Cerrado Coffee Growers Federation established the Cerrado Mineiro Designation of Origin, indicated with a seal of origin and quality, to communicate both the sustainability and quality of coffees from Cerrado Mineiro.

Gustavo Guimarães, international market promotion coordinator for the Federation, identifies communication between producers and the Federation, roasters, retailers, and consumers as essential to understanding the origins of coffee quality. “The main traceability tool is a QR [quick response] code that comes with the certificate of origin. The 19-digit code on the seal of each exported sack of coffee or on retail bags of roasted coffee can be typed into the Cafés do Cerrado website.” Giving more supply chain actors, all the way to the consumer, access to the full production profile of the coffee is evidence of the integration between sustainable practices on the farm and final quality in the cup.

The Cerrado Coffee Growers Federation works internally with national and state agencies to maximize the training and research resources available to producers. Structured support affords growers the agility to offer tailored products to clients through coordinating origin visits. “The Authorial Coffee project is an initiative where the roasters decide, on the farm, how coffee will be harvested and processed, resulting in a special edition launched in local supermarkets with the producer directly serving the consumers. This project was done in 2018 with Whole Foods Market in Austin, Texas,” said Guimarães.

Planning for Sustainability

Much of coffee quality depends on timing and attention to detail; cherries must be harvested at optimal ripeness and moved between phases of processing to keep flavours intact and avoid defect. Similarly, growing coffee in symbiosis with the surrounding environment requires constant observation and adjustment. These jobs require many eyes and hands, making the coordination of seasonal and permanent workforces essential to producing sustainable quality coffee.

Exportaciones Agropecuaria Farallones is a coffee producer and exporter in Antioquia, Colombia, the department with the greatest number of large estates in the country. “Our farms maintain the balance between sustainable best practices and coffee quality through our practical knowledge of coffee cultivation, careful planning, and execution of organized work plans by trained personnel,” explained Farallones export manager Ángela María Mosquera Vélez. Farallones also coordinates with CORAntioquia, the regional arm of Colombia’s environmental ministry.

Responsible agricultural practices begin with plans made by the farm’s administrators; on large farms, there also must be employee training and motivation to make sure the plans are carried out. Vélez said that “another important aspect to the balance between sustainable practices and coffee quality is the generation of formal employment under dignified conditions. Stable employment increases the sense of belonging and ownership.”

Rather than relying on seasonal labour only for the harvest, sustainable farm practices are lower input and therefore more labour intensive. This creates opportunities for full time positions where employees have a greater investment in carrying out best practices, making coffee more sustainable and higher quality.

In Serra do Cabral, Flanzer describes how Ecoagricola “uses biological controls to avoid pests, such as the pheromone trap, which attracts the berry borer insect in simple recycled bottles painted in red. We produce our own mineral-organic compost to fertilize the soil. We use precision agriculture control where we measure the soil every hectare and use resources and inputs to their specific needs.” Precision agriculture requires a team of experts, further generating demand for coffee farm labour that is both manual and professional. When the whole team working on a coffee farm is invested in both the land health and the quality of the product, the two pursuits become intertwined, and better coffee means tastier and more sustainable coffee.

Flanzer and his brother began planting coffee on Ecoagricola in 2007, when there was already a baseline industry awareness of the importance of sustainability. Adequate planning makes it possible to produce coffees of exceptional quality at different volumes while maintaining low-impact production. “We take great care in all lots, from microlots to full container sized lots,” said Flanzer. “We plan correct inputs and irrigation, from picking to drying.”

Similarly, Agropecuaria Farallones has “a policy in our business to prepare and train our team to fulfill the obligation to care for the environment during the production process and assure traceability for our clients,” said Velez. “Aspects like expertise of our personnel and excellent agriculture practices create the ideal conditions for an excellent final product from Agropecuaria Farallones.”

The Cerrado Coffee Growers Federation also emphasises the administrative components of sustainability. They lead an annual Technology and Innovation Meeting where producers have access to research results in the form of presentations at field stations and mini courses. Producers, consultants, and researchers discuss issues related to the coffee production chain. Additionally, the Educampo program supports groups of 15 producers through training and consulting on agricultural and financial management. The program started in 2009 and today supports around 210 producers from five cooperatives.

Rewarding Sustainability and Quality

There is no shortage of competitions in the coffee industry that reward coffee quality based on cup score alone, but a growing number of sustainability-oriented competitions reward the responsibility of the production process.

The Sustainable Farm Award is held annually in Brazil by Globo Rural Magazine in partnership with Rabobank, the World Wildlife Foundation and the Espaço Eco Foundation. It evaluates all types of farms – from soybean to cattle ranching – and coffee farms are regularly among the top finishers, demonstrating the coffee sector’s commitment to sustainability in the world’s largest producing country. Competing farms receive technical visits and the resulting evaluation reports are the basis for the selection of the winners by a judging committee.

To be considered, farms must be registered with the rural environmental register (CAR), comply with the New Forestry Code and have Permanent Preservation Areas on the property. The award selection committee considers a full environmental analysis, which includes agricultural and social analyses. Participating farms must demonstrate minimal environmental impact, the greatest social benefit, and the greatest productivity per hectare to use fewest hectares possible for agriculture, devoting more land to preservation and reforestation. (For more information about the award, click here).

Certifications also play a role in encouraging sustainability and rewarding quality. Both Agropecuaria Farallones and Ecoagricola are Rainforest Alliance certified. “In this journey we’ve had two Cup of Excellence winners, a first place at the Rainforest Alliance Award as best sustainable certified coffee in Brazil, and two Minas Gerais state prizes representing Chapada de Minas,” stated Flanzer. “Our Serra do Cabral coffees are roasted as components of specialty blends, as well as single origin in many parts of the world.” Sustainable quality at scale means that award-winning microlots and consistent container-sized lots for blending can come from the same farm, one that produces all its coffee with the least impact to the environment and greatest benefit to dignified employment and ecosystem restoration.

According to Flanzer, “the specialty clients we have, together with our certifications, attest we are on the right path to assuring coffee quality, independent of the lot size. Our greatest prize is being able to produce high quality coffees, preserve nature, and work with such an amazing team and great clients.”

As consumers come to expect both high-quality products and social responsibility from the coffee companies they patronise, coffee production at scale makes it possible for both goals to be achieved together through careful planning that recognises the connection between coffee’s sensory attributes in the cup and the impact of the production process that yielded them.

• Rachel Northrop has been covering coffee for T&CTJ since 2012, while she lived in Latin America’s coffee lands writing When Coffee Speaks. She lives in Miami, Florida. She may be reached at northrop.rachel@gmail.com.

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With two of the top five coffee producers in the world – Brazil and Colombia – South America maintains its relevance not only as an exporter, but also for its current consumption standards. According to new data published by Euromonitor International, it is among the top regions in the world for total volume sales in 2019, with more than 1.3 million tonnes, only after Asia Pacific and Middle East & Africa.

Over the last five years, the region increased total volume sales by a three percent compound annual growth rate (CAGR) – among the fastest-growing regional markets in the world. Such a positive performance, however, is not expected to slow down. South American coffee sales should grow at a four percent CAGR between 2019 and 2024, per Euromonitor.

This may sound counter-intuitive at first, since the market is already so mature, coffee is so traditional and South American economies have struggled with recent economic and political crises. So, where is growth coming from?

Proposing a New Understanding Model

While a common denomination to refer to countries’ coffee development level is waves, ranging from those with incipient consumption to those in which it is omnipresent. These definitions are not always clear or even consistent enough for companies to base their strategic planning. Especially in South America, where social inequality is such a big issue, classifying a coffee market based on trends mostly present in urban areas is likely to discredit important social and economic movements in peripheral regions.

For that reason, Euromonitor International proposes a new way of understanding differences between markets and anticipating opportunities to further growth: premiumisation, income, population and soft driver markets. Premiumisation-led growth markets are those in which consumers are increasingly interested in products with higher added value, through greater understanding of products or even unique experiences. Income-led markets refer mostly to those where coffee is not perceived as essential, therefore more attached to available income. Usually, these markets tend to prefer other beverages, for example, yerba mate for countries like Argentina and Uruguay.

Population-led markets have growing market potential as the key driver, despite the possible competition with other beverages. With so many new consumers trying the beverage, the need to beat competitors and conquer share of throat is lower. Finally, soft-drivers-led markets are the ones in which most important factors are not related to macroeconomic or social-demographic factors, but on how the industry responds to new market movements. These are the markets in which companies have the highest power of influence, therefore less subject to market volatility.

While the waves model is mostly focused on the stages of development for the coffee market per se, the new rationale on the current growth model proposed by Euromonitor not only can be replicated to many other types of consumer goods, but also helps understand the local dynamics, new political, economic, demographic or even market scenarios that can accelerate or regress development.

No General Growth Roadmap for Sales

Looking at South America’s coffee volume sales outlook in the next five years, the most dominant growth drivers are still soft ones. On a regional level, this is particularly interesting, as many countries have been, currently are or will soon be in challenging economic and political scenarios. According to Euromonitor International’s Industry Forecast Model, the way the industry responds to market movements and new trends will be a key success factor in the future, potentially offsetting or at least smoothing negative impacts of other drivers.

A closer look into key coffee markets, however, is welcomed to help companies better adjust their growing strategies in the region. Brazil alone accounts for 72 percent of total volume sales in the region in 2019, per Euromonitor. While the country struggles to resume economic growth, coffee sales suffered only a light deceleration in 2016, quickly recovering since. The main reason being the industry’s fast reaction with new launches, focus on communication and advantage of non-fulfilled consumption occasions to grow in per capita consumption – soft drivers led growth. Even though trends might differ between urban and peripheral areas, many players were able to accommodate in their portfolio brands ranging from the most affordable to the most premium.

Colombia is the second largest coffee consumer in the region, with more than 82,000 tonnes in total volume in 2019, per Euromonitor. Despite being an important coffee producer and exporter, Colombia presents a hybrid future growth-led movement; volume sales should be boosted both by income and soft drivers. Demand for high-quality and premium coffees continues to rise with companies like Juan Valdez and follower brands. This is directly related to consumers’ available income; although more expensive, these offerings are in line with the quality level expected.

The third largest market in the region, Argentina, is registering 30,000 tonnes in 2019. As the country’s economy still faces instability, many consumers are resistant to spending money eating out and are more interested in at-home social experiences because of committed available incomes. Argentina has a high penetration of yerba mate as a significant hot beverage, which forces companies to have even more creative strategies to engage consumers.

Apart from the momentary relevance of prices level to final consumers, the industry’s response – the soft drivers – is the key growth driver to smooth retraction in volume sales. Investments in high-quality instant coffee and pods to help consumers replicate the foodservice establishment experience at home, as well as price incentives for new entrants in the category, have been an important strategy adopted by major players and should continue to be.

A Safer Approach to Business Plans

Brazil, Colombia and Argentina represent a significant portion of South American coffee and similar characteristics in market development. Such similarities, however, are not enough to explain growth movements in the future, as the drivers are different in each of them. The generalisation of these factors could result in misleading interpretations of opportunities to grow in the future.

Although the waves classification still provides significant value for the coffee industry to map the biggest coffee market changes at a global level, other rationales can be used to help stakeholders better anticipate future demand. A model that allows growth decomposition can bring more actionable insights, especially for such an unstable, dynamic – and fantastic – market, like coffee in South America.

In this article, the South American region includes: Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, Peru, Paraguay, Uruguay, and Venezuela.

• Angelica Salado is research manager at London-based market intelligence firm, Euromonitor International. She is based in the Chicago, Illinois office.

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Average prices for the Arabica group indicators rose in July 2019. Prices for Brazilian Naturals experienced the largest increase, averaging 105.43 US cents/lb, 4.7% higher than in June 2019. Other Milds increased by 4.4% to 135.47 US cents/lb while Colombian Milds rose 3.1% to 137.63 US cents/lb. In contrast, Robusta prices decreased by 0.1% to 73.93 US cents/lb, which is 13.3% lower than the start of the coffee year.

In July, the arbitrage between Arabica and Robusta coffees, as measured on the New York and London futures markets increased for the fourth consecutive month to 44.18 US cents/lb, 13.2% than in June 2019.

June exports rise by 3%

In June 2019, world coffee exports rose by 2.8% to 10.94 million bags compared to June 2018. This growth was led by shipments of Colombian Milds, which grew by 19.9% to 1.23 million bags. Exports of Brazilian Naturals grew by 8.8% to 2.91 million bags, while exports of Other Milds rose by 0.6% to 2.93 million bags. Robusta exports decreased by 4% to 3.86 million bags in June 2019.

Production estimates revised

In coffee year 2018/19, world production is estimated at 168.77 million bags, one million bags higher than estimated in the June report. Arabica output is estimated at 103.79 million bags, accounting for 61% of production, and Robusta is estimated at 64.98 million bags, representing 39% of the total. Output in the five largest producers this coffee year would account for 73% of world production.

Brazil’s production in crop year ending March 2019 increased by 18.5% to 62.5 million bags, which is reflected in the 20.6% increase in its exports this period, reaching 37.13 million bags. Brazil’s Robusta production has recovered from the previous drought as evidenced by the growth in green Robusta exports.

Vietnam’s production is estimated to be 1.3% lower at 30 million bags as adverse weather conditions affected the yield in crop year 2018/19. Its exports in the first nine months of the year declined by 3.9% to 21.1 million bags.

Output from Colombia is estimated at 13.95 million bags in 2018/19, 1% higher than last year.  Its shipments of soluble exports have grown steadily in recent years. In 2015/16, soluble exports represented around 5% of total exports, while in 2018/19 they represent around 6%. Colombia’s imports in the first half of coffee year 2018/19 increased to 865,024 bags from 288,115 bags during the same period in 2017/18, with imports of green coffee accounting for 95.8% of total imports this year.

Indonesia’s production declined by 5.6% to 10.2 million bags, and shipments declined by 33.7% to 5.15 million bags in its crop year ending March 2019. In addition to the decline in output, steadily increasing consumption has reduced the availability of coffee for exports. Around 75% of Indonesia’s green coffee exports are shipments of green Robusta, which reached 2.06 million bags in the first nine months of the coffee year compared to 2.44 million bags last year. The share of soluble in the total exports has increased from 5.9% in 2010/11 to 20.7% in 2018/19.

Production in Ethiopia is estimated at 7.5 million bags, 0.6% higher than in crop year 2017/18. While Ethiopia is the world’s fifth largest producer, it is the ninth largest exporter given the high rate of domestic consumption. In 2018/19, Ethiopia’s consumption is estimated at 3.8 million bags, which represents 50.7% of its expected output.

World coffee consumption is estimated 2.1% higher in coffee year 2018/19 at 164.84 million bags with the largest growth in Asia & Oceania where demand rose by 3.6% to 35.91 million bags. Despite this growth, world production is expected to exceed consumption by 3.92 million bags, resulting in a cumulative surplus of 8 million bags over the last two seasons.

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Despite having 600,000 coffee growers, Burundi is a small player in international coffee markets and is operating in an environment of aggressive competitors. The improving productivity and competitiveness are not going to happen merely because of a production increase, and the local leaders know this. What’s really needed in this small African nation, is quality improvement along the value chain and a focus on the lucrative specialty coffee markets. Such efforts will allow the country’s products to be differentiated. It will also provide a better buffer for the inevitable periods of low prices.

Local leaders have come to a consensus, amongst themselves about the business principal which can drive improvements: quality starts at the farm level, and it can only be maintained through proper processing and storage.

Coffee production in Burundi is mostly smallholder-based, with approximately 122 million coffee trees and a production area of 70,000 hectares. Arabica is the species which is mainly grown, though some Robusta is also planted. The average production of coffee cherries is estimated at about 164,800 tonnes and around 20,000 tonnes of green coffee, of which about 70-80 percent are fully washed. Average coffee cherry production per tree is about one kilogram, which is far below the yields of 2.5 to 3.0kg observed in other coffee-growing areas, for instance in Asia and Latin America. Registered production of green coffee in Burundi in 1990-91 was 33,912 tonnes while observed figures in 2011-12 were about 15,000 tonnes. For coffee year 2017-18, that number dropped to 13,517 tonnes, according to Autorité De Regulation De La Filière Café Du Burundi (ARFIC).

According to the World Bank’s World Integrated Trade Solution (WITS) report of 2015, the current Burundian economy is predominantly based on agriculture. That one sector accounts for 40 percent of GDP and employs more than 90 percent of the population. Coffee and tea are Burundi’s largest exports, and coffee accounts for about one third of the country’s total export income.

The country’s highest pick was registered in 1994-95 with 40,985 tonnes. The cyclical swing of seasons sometimes leaves the country with limited quantities to export. Of course, there are many practical factors which have made consistent production a tricky matter, not the least of which were both a long civil war and devastating floods, which come and go. For instance, the floods of April 2018 were, according to organizations like ReliefWeb, some of the region’s most horrific.

Improving Declining Productivity

Despite the current low and declining productivity level of the coffee sector in Burundi, it continues to play a vital role in the country’s economy and represents the main industry and export product – accounting for up to 80 percent of foreign currency earnings. During the harvest of raw and green coffee, the sector plays also a key role in stimulating the rural economy.

The associated industry (de-pulping and washing stations) and traders inject an important sum of cash into rural areas, which in turn increases spending in purchase of goods for rural households, manufactured products, payment of social expenses, and reimbursement of credit.

The construction of washing stations in rural areas led to a modest first stage of industrialization, off-farm jobs for local labour during the coffee campaign and, most importantly, the development of rural access roads to the washing stations which are also used for other purposes.

The coffee industry was one of the priority sectors targeted for deregulation reforms and privatization in the structural adjustment program (initiated in 1986) that aimed to limit the state’s involvement in the productive sector. Due to the civil war and subsequent recovery challenges, coffee sector reform and privatization of state entities experienced some delays.

However, it subsequently led to two positive developments: the establishment of both a new Regulatory Authority of Burundi Coffee Sector (known by its French language acronym, ARFIC) and an inter-professional association (aka Intercafe); and an effective deregulation of de-pulping and export through the construction of new washing stations by private investors and by the Burundian food growers associations, which are all known in the French language as Solutions Gestion Alimentaire (Sogestal).

Today, the government is eager to push forward with the long-term privatization process. The current focus is on some 77 washing stations and a mill – although different actors of the value chain have different ideas about how this should be carried out. For instance, coffee farmer associations are determined to take part in the privatization. Naturally, the emergence of such associations adds a political dimension to the on-going reform and privatization process.

Even if some of the competing interest groups are small, their diverse backgrounds (from differing political, regional and ethnic groupings) have made coffee reform into a central peace-building focus for post-civil war Burundi.

While several steps have been taken toward improving the performance of Burundi’s coffee sector, the whole economy is experiencing serious instability and declines which cannot be explained by chance, nor by climatic conditions alone.

Among the causes behind this situation are the following:

• The persistence of structural deficiencies, such as inefficiencies in the governance of the value chain. The institutions and the actors involved in the value chain are facing several constraints (incomplete reform and privatization process, lack of technical and managerial capacity for emerging farmers’ association, non-transparent pricing mechanisms, etc) that hamper their operations and, consequently, limit the development of the coffee sector in Burundi.
• A low state of productivity, due to insufficient technical and financial support to farmers. Lack of investments in productivity enhancing technologies following the liberalization of the market resulted in low and highly fluctuating productions, poor maintenance and degradation of the orchards, low input application as well as pest and disease problems, etc.
• Limited competitiveness of the firms involved. This helps to explain a decrease in both quantity and quality of product, as caused by the ageing of orchards at the farm level (28 percent are more than 30 years old and 62 percent are between nine and 30 years), limited technical know-how moving downstream to support quality improvements (milling, tasting, etc), and inefficient marketing structures for promoting the Burundi brand.
• Primary production has also not kept pace with the expansion of processing capacity, leading to a situation in which all raw materials are competitively sought with little price differentiation. Many washing stations have experienced low profitability due to high operational costs (partly related to capacity underutilization) and management limitations.

Under such circumstances it will be extremely difficult for Burundian coffee producers to be able to compete with the world coffee industry (or even maintain their competitiveness at the regional level). The resulting economic and social consequences are quite severe for Burundi.

Positive Factors Exist

Despite these weaknesses, Burundi’s coffee value chain is not entirely without its strengths. These positive factors are helping the World Bank and others to justify new (and potentially transformative) investments that aim to reverse current trends. Among the moves which are being made in new Burundi-focused World Bank programs, the emphasis is on adapting to climate change. Burundi’s climate is shifting rather quickly.

Much of this new international development assistance funding is aimed at achieving multiple outcomes: helping farmers to shift their altitudes in order to produce specialty Arabica coffee, which attracts premium world market prices; opening the sector to private investors; finding more local agri-producers who are interested and experienced in growing coffee; supporting emerging farmer associations; supporting the development of advanced processing infrastructure, especially washing stations and dry milling capacity to support increased production of high quality coffee.

The over-arching goal of the international development organizations is to increase worldwide consumption of coffee. During the last 50 years the average annual growth rate has been 1.9 percent. International experts at the World Bank and elsewhere are expecting a continued rise in demand for specialty coffee growing and processed in the markets of the “Global South.” These developing economies, which are poor as measured in per capita income, will certainly benefit from such a boost.

As the data clearly shows, Burundi is so heavily dependent upon coffee export proceeds that some advocates for change have taken to saying that “failure is not an option.” Since coffee is a perennial, and since the land is already tied to it for the lifecycle of the tree, it is not easy to convert and diversify the production base. Thus, they have no choice but to invest in all of the various options – in better practices, easier finance, smoother logistics – which, taken together, can help ensure Burundi’s rising coffee production.

For those readers seeking to investigate the situation further, there are two outstanding sources which are well worth reviewing if one must choose from among the many useful documents/websites: “Trading Economics” (2018), and “Doing Business Project: Measuring Business Regulations” (2018).

Gordon Feller is a freelance writer based in California who travels the world reporting about innovations that can change our economies and strengthen small enterprises. He can be reached at Gordon.Feller@gmail.com

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