An Analysis of the Coffee Industry

A beverage that is considered a morning by many around the world, coffee is a universal drink that has become a staple in many people’s daily routine. The coffee industry is a large one that dominates trade and consumerism. Behind the thriving coffee industry is an intricate web of economic transactions that allow it to flourish.

Overall, coffee is the world’s second most valuable commodity that is traded globally. Across many continents, the coffee industry creates jobs for growers, roasters, and retailers of the beans. To allow these jobs, the export and import business is fast and growing when it comes to coffee.

First of all, the production of coffee is a major industry in itself. Approximately 1.1 million hectares of the farmland in the whole world are used purely for coffee. Brazil is a main coffee farming place as well as many countries in Africa. According to Statista, in 2012 Brazil was the leading coffee producer with about 3 million metric tonnes of coffee made.

We often forget how much effort goes into a cup coffee before it is poured from a machine into a mug to warm our insides. In the commodity chain of coffee, there are many people involved. These people include the farmers and producers, the middlemen, exporters, importers, people who roast the beans, the retailers who sell, and the consumer who enjoys it in beverage form at long last.

The global demand for coffee has meant there are some inequalities in the trade of coffee. As the prices and profits rise for coffee consumers, the income in countries that produce coffee decreases. This is referred to as the coffee paradox. Climate change and issues with drought in coffee-growing countries affect the supply and demand, but it is often the producers who are affected the most, not the consumers.

Around the world, Europe, United States, and Japan account for over 50 percent of the world’s total coffee market. These are the parts of the world importing the most coffee and where it being consumed the most. Interestingly, in developed countries, there is an increasing demand for coffee from the millennial generation of people aged 19 to 34 years old. This is partly because of the increasingly trendy and fashionable ‘cafe culture’ is on the rise in the developed world.

There is also an increased demand in developed countries for ready to drink coffee on the go. This correlates with the decline in soft drinks and sodas as the caffeine in coffee is replacing the stimuli from these.

In the coffee industry, Arabica coffee holds the highest shares in the coffee market with about 70 percent. The international coffee market is divided into three sections of arabica, robusta, and Iberica. Europe holds the highest shares worldwide in the global coffee market. It is predicted that the Middle East will rise as a strong competitor for this as the coffee industry and culture continue to grow there.