Coffee is one of the best-selling consumer goods produced in more than 60 countries. The coffee industry gives subsistence to over 25 million families of agricultural workers worldwide. Many of these countries are heavily dependent on coffee, more than 75% of their total export earnings. A few lines about the features of the global coffee industry will not only show how big the coffee industry is but will also be a good help when choosing coffee at home.
General Information About Coffee Industry
The International Coffee Organization (ICO) is an important international institution that regulates international coffee trades. The organization develops coffee production in producer countries and thus increases economic development and living standards in developing countries- exporters of coffee.
Due to ICO reports, the consumers can get objective and comprehensive information on the world coffee market. Let’s dive into the statistics and look into the situation from different sides.
4 Stages Of Coffee Development
The coffee industry is relatively young, but there are already three clear stages in its development. Currently, the industry is experiencing the fourth wave, and scientists are discussing the prospects and features of the upcoming fifth.
Stage 1 - coffee by the masses
The development of the modern coffee market began in the 19th century. Enterprising traders saw the potential in a bitter beverage and actively engaged in the expansion of retail space. Quantitatively - making coffee more accessible in different parts of the world, qualitatively - attracting new consumers through advertising. Not only whole but also ground coffee beans appeared on sale.
Stage 2 – the need for quality
At the end of the twentieth century, the demands on the quality of life in society increased. Coffee became a drink for pleasure. Mono-varieties and blends have appeared on the market, indicating the cultivation regions and the degree of roasting. The development of online coffee shops has influenced the spread of such terms as “espresso,” “latte,” “French press.” The atmosphere and variety of drinks were especially appreciated in the coffee shops.
Stage 3 - specialty coffee
It is believed that the third stage in the development of the industry started in 2002. Increased competition in the coffee market has forced producers to produce quality, tasty and aromatic coffee. The elite Specialty segment and new brewing methods have appeared on the market.
Stage 4 - coffee as an art
Baristas are developing alternative ways of brewing, and consumers are interested in coffee as a subject of gastronomic pleasure. Today you will not surprise anyone by brewing a drink in a Chemex, Aeropress, filter, funnel, etc. Coffee has become real science. It was in the fourth wave when barista championships and schools of latte art became popular.
How big is the coffee industry, and what to expect on stage 5? Experts’ opinions differ, but the general trend of moderate consumption and environmental protection will undoubtedly be the main issue. Coffee as a beverage has already reached a relatively high level of development, so producers are expected to pay attention to the environmental friendliness of production and packaging.
The IOC is currently concerned about global warming. According to IOC experts, if the temperature rises, there will be a shortage of coffee beans in world markets. As temperatures in coffee-growing regions have increased by half a degree over the past 25 years, farmers are forced to move higher to mountains with less fertile soil. According to the pessimistic forecast, coffee production will not be able to meet the growing demand.
According to the IOC, from 2001 to 2020, global demand increased from 62 million to almost 80 million. At the same time, production fell to 75 million tons. In general, in 2009, exports from coffee-exporting countries fell by 28%. In 2009, the growth rate of coffee prices increased by 20%. Coffee contracts are becoming one of the most popular speculative financial instruments.
Prices for Arabica coffee have risen to a maximum in a few years. The value of the July contract rose to $ 1,572 per pound - the highest since 2016. Due to the cuts in supplies from Brazil and transportation problems in Colombia, forecasts for this year's harvest have fallen sharply, and the 2022 season is also at risk.
Not only does coffee power your day, but it also helps power the US economy. The US has, by far, the largest coffee market worldwide, with revenues reaching over 80 billion US dollars.
- In 2015, the total coffee revenue in the US was $225,2 billion.
- The retail side of the market is a crucial factor. Global coffee retail sales, dominated by Nestlé, reached $ 83 billion in 2017, and the average annual consumption in the world was $ 11 per capita.
- In 2015, people spent around $75 billion on coffee.
- The coffee-related economic activity comprises approximately 1.6% of the total US gross domestic product.
- This huge industry will employ 19,222 people in 2021.
- The coffee industry generates nearly $28 billion in taxes.
How Much Money Does The Coffee Industry Make?
In 2019, the global coffee market gave revenue at about $102,15 billion and was expected to reach 155 billion by 2025.
Is the coffee industry growing or declining?
Has the Coffee Production industry in the US grown or declined over the past 5 years? The market size of the Coffee Production industry in the US has declined 3.4% per year on average between 2016 and 2022 due to pandemic impact.
World Coffee Consumption Over Years
How big is the coffee industry from the perspective of consumption? The International Coffee Organization (ICO) annually performs a statistical analysis of coffee consumption per capita, which is calculated for each country separately. The calculation of this indicator is very simple: its exports are deducted from the annual volume of coffee imports to the country, and the difference between these values is divided by the number of inhabitants. At present, the world average is 4.5 kg per person per year.
According to ICO, Norway, Switzerland, Canada, the European Union, Japan, and Australia have been leading importing countries over the past year. At the same time, among the EU countries, the undisputed leaders in coffee consumption are Luxembourg, Finland, Germany, the Netherlands, and Sweden.
There are no surprises among the exporting countries: Brazil, Costa Rica, Honduras, the Dominican Republic, and El Salvador are in the lead.
There is an opinion that coffee-producing countries have the highest consumption. This is true only in Brazil and Costa Rica.
Interesting Coffee Statistics
It is always a pleasure to expand your horizons with knowledge, numbers, and statistics. According to the figures, you can say how big the coffee industry is and which country is considered the most coffee-loving.
In the United States, coffee is almost as popular as regular water - 66% of respondents said they drink water every day, while 63% of respondents said the same about coffee. According to 2021, most coffee in the world is consumed in the European Union (34.4% of world production), the United States (18.2%), Brazil (14.9%), and Japan (5.2%).
The most popular coffee drinks globally are cappuccino, espresso, latte, Irish coffee, and flat white.
In the United States, women spend 17% more money on coffee than men. It’s weird, isn't it? Especially considering that women are traditionally more likely to be invited for coffee than men.
Coffee Data For The United States
The United States is the largest coffee market in the world in many parameters, including the total cost of retail drinks sold there and the overall profitability of that market. Therefore, a separate section will consider the statistics for this country (2020-2021).
- Annual volume of the commercial coffee market (beverages of all kinds sold at retail): $ 5.18 billion;
- 45.8% - the share of ground coffee; 54.2% - the share of instant coffee;
- Every day, the average American drinks 1.9 cups of coffee;
- 47% of all people between the ages of 18 and 24 drink at least 1 cup of coffee a week;
- 44% of Americans prefer to drink traditional black coffee. The remaining 56% like other coffee drinks, 40% take coffee with milk and/or sugar and/or cream.
Coffee For Professionals
Most recently, the American retail chain conducted a specific study, which surveyed 4,000 people of different professions on coffee consumption per day and their taste preferences. According to statistics, true coffee drinkers are medicine representatives: doctors and nurses (32%) said that it is black coffee that stimulates their work during the long working week. Next, the “coffee addiction” of different professions is as follows:
- hotel staff;
- architects, designers, designers;
- financiers, bankers, insurers;
- engineers, operators of mechanisms;
- civil staff.
At the same time, one of the key criteria in coffee consumption (among representatives of all professions) was the territorial proximity of the coffee shop to the workplace.
COVID Impact & 2021 Report
It doesn’t matter how big the coffee industry is. The COVID pandemic has caused a widespread crisis. The coronavirus pandemic has affected foodservice operators for many months - and continues to do so to this day. In 2021, takeaway coffee and the delivery of a stimulating beverage became the motto of the US coffee industry. From March 2020, coffee operators have had to adapt to ever-changing conditions. They had to do business while cafeterias were closed, not working at full capacity, or could reopen only if strict sanitary rules and regulations were observed.
Coffee operators see the main potential for growth in digitalization. Ordering coffee online and receiving it with home delivery is becoming more common due to the crisis caused by the coronavirus.
Market players report a significant increase in online orders for home consumption and, as well as an increase in demand for coffee-making equipment, which is sold mainly through online stores or online platforms. In addition, monthly coffee delivery subscriptions have become one of the drivers of growth in 2021.
Another trend is personalizing orders, such as choosing gluten-free dishes or orders with vegan milk replacers. Operators are also seeing a shift in consumer demand towards healthier food and local and organic products. Generation Z is creating a new wave of coffee lovers whose representatives are focused on drinks that do not look like traditional coffee.
Producing specialty coffee continues, and new ways of receiving/exporting the order by the customer grow. The report also notes fewer cash transactions as consumers and business owners switch to other forms of payment.
What Is The Future Of The Coffee Industry?
The price of coffee on the commodities market here at the start of 2021 has been hovering around $1,25, down from where it ended 2020 at $1,28, a three-month high.
- In the Coffee segment, volume is expected to amount to 1,316.5mkg by 2025.
- The market for the Coffee segment is expected to show a volume growth of 3.3% in 2022.
- The average volume per person in the Coffee segment is expected to amount to 3.7kg in 2021.
According to the latest World Coffee Portal forecasts, it takes not less than 3-4 years to increase turnover and return to pre-pandemic levels. And people will continue brewing good coffee at home, almost as a hobby.