Bogota, October 6, 2016 (FNC Press)– Global market trends provide important opportunities for Colombian coffee in general and for Colombia's diverse specialty coffees in particular. This was one of the main lessons of the first day of ExpoEspeciales Café de Colombia's academic agenda.
Trends including millennials' growing demand for specialty coffees - particularly in the US market-, South Korea's growing demand for high-quality coffees and rising demand in the single-dose segment are major driving forces for the industry.
As noted by the day's moderator Felipe Robayo, Chief Commercial Officer of the Colombian Coffee Growers Federation (FNC), "if we put this together, there are interesting prospects ahead. Millennials support a Colombian coffee-oriented consumption. Out-of-home consumption is a driver for these generations."
Higher Production Concentration
During the "Global Coffee Supply and Demand" presentation, Neil Rosser, Head Coffee Research at Armajaro Research Ltd (ARL), revealed that, in recent years, coffee production and exports have concentrated in countries such as Brazil, Vietnam and Colombia. This has generated higher supply vulnerability to climate fluctuations and shocks.
Increased demand for Naturals and Robusta coffees has been at the expense of mild Arabica coffees, partly because of falling production in countries and regions such as Mexico and Central America. This, however, has not prevented countries, including South Korea, or single-dose manufacturers from preferring high-quality coffees.
The rise in global demand will uphold at a steady 2%, leading the industry's largest roasters and buyers to pay higher prices to producers in order to keep coffee supply sustainable, since farmers have to invest in their coffee plantations and increase production and productivity to be able to meet demand.
Millennials: a Driving Force
The conference "Speaking to New Generations About Specialty Coffees: Millennials and Coffee Consumption", led by David Piza, Head of Corporate Social Responsibility at S&D Coffee and Tea, helped the attendees better understand and connect with young consumers.
Based on a study by S&D, Piza stated that millennials in the US lead out-of-home consumption and view themselves as food and coffee experts. "This is a huge opportunity to encourage them to understand more about coffee origin." Although millennials are also aware of innovative coffee preparation techniques, only half of them have actually tried them; this represents an important growth opportunity.
The S&D study places in a pyramid the basic needs of young consumers (cleanliness of the establishment, freshness, and affordability), the conditions that help them connect with the beverage or brand (flavor variety, options, atmosphere) and the conditions that encourage them to be beverage or brand promoters (ethics, sustainability, etc.).
As Piza noted, when defining specialty coffees, millennials take into consideration brewing, personalization, quality, indulgence, origin and the stories behind the coffee growers who produce their coffee. These are all features and values for which they are willing to pay higher prices.
