! ! ! !
! The introduction of competing private labels that will probably confuse consumers and dilute the market presence of the existing organic and fair trade labels.
! !! !
! Need for considerable funds to further promote the Max Havelaar label in mainstream channels.
! !! !
! Respondents claimed that the bureaucratic government complications make the direct import of organic coffee into France quite difficult.
Key factors for growth
Members of the industry were asked to, “Rate the importance or value of the following factors for expanding your sustainable coffee business.”
! !! ! ! Quality of cup ! !! !
! Consistent and reliable supply
! !! !
! Price relative to conventional coffee
! !! !
! Clarity between different types of
certifications, criteria, and labels
! !! !
! Awareness of consumers about these coffees
If the industry does not fulfill these factors it is likely that its future growth will be constrained.
The State of Sustainable Coffee The State of Sustainable CoffeeThe State of Sustainable Coffee The State of Sustainable CoffeeThe State of Sustainable Coffee
108 108 108 108 108
Respondents were offered 4 choices ranging from “not at all important” to “very important” (figure 10.9).
French coffee firms believe that customer awareness and the pull of their demand is the most important factor for further expansion. This is closely followed in importance by the consistency and reliability of supply and then by the actual quality of coffee.
Most respondents lauded the quality of the available organic coffees but pointed out that further improvement can still be achieved. The fair trade consumer will accept paying a slightly higher price.
Although supermarkets have been driving the recent growth, their awareness and interest in sustainable coffees are still quite low.
Figure 10.8 Sustainable coffees as percent of the French market (by volume)
The State of Sustainable Coffee The State of Sustainable CoffeeThe State of Sustainable Coffee The State of Sustainable CoffeeThe State of Sustainable Coffee
110 110 110 110 110
The overall market context
In 2001, overall green coffee consumption rose by 0.2 percent to 549,500 tons (figure 11.1). Consumption of soluble coffee grew by 3 percent to 37,830 tons of green coffee. Soluble coffees thus constituted 6.9 percent of the market by volume.
Although per capita coffee consumption has fallen from its recent highs in the early 1990s of more than 7 kg per person, it is still among the highest in the world. In 2001 consumption remained stable at 6.7 kg (figure 11.2). The German coffee industry believes that the downward trend in coffee consumption that started in the early 1990s has come to an end, and now expects continuing, modest growth. The development of new products (such as flavored solubles) and the positioning of coffee as a
Source: European Coffee Federation, 2002.
Figure 11.1 German coffee consumption (Metric tons green)
11.
Sustainable Coffee in
111 111 111 111 111
Source: European Coffee Federation, 2002.
life-style product are considered to be contributing factors. Moreover, Germany has experienced a growth in the number of coffee bars and specialty coffee shops, thereby attracting a younger generation and presenting a new image.
German coffee industry revenue decreased slightly in 2001 for the second year in a row, to 3.86 billion euro. The decrease was attributed to lower consumer prices.
There is limited official data about “out of home” consumption and its market share although there are indications that it is experiencing considerable growth.41 The European Coffee
Federation (ECF) notes that 20 - 25 percent of coffee is consumed out of home. Yet, this figure may be underestimated, since it is significantly lower than in similar markets like the Netherlands and Belgium. The proliferation of new Seattle-style cafes in towns and cities is helping to fuel this growth.
The market is unique for the presence of a considerable number of health-oriented coffees that, among other things make claims to being: mild, soft, cleansing, stomach-friendly and, partly or totally, decaffeinated. Some of these, particularly decaf and “half decaf” coffees have important market shares. In line with health concerns, coffee-substitutes based on rye and chicory and other products are also broadly supplied.
In 2001, sales of espresso coffee continued to grow peaking at 8,500 tons. Italy is the largest source, providing 84 percent of the total (ECF 2002). Within soluble, the instant specialties increased to more than 23,000 tons to dominate the business with about 70 percent of the market in 2001. In 1990 instant specialties only accounted for 14 percent of instant coffee sales.
The major instant specialties, according to the ECF (2002) are cappuccino (71 percent), flavored
41 German Coffee Association, personal communication.
The State of Sustainable Coffee The State of Sustainable CoffeeThe State of Sustainable Coffee The State of Sustainable CoffeeThe State of Sustainable Coffee
112 112 112 112 112
coffees (12 percent), ice-coffee (6 percent) café - au - lait (4 percent) and others (1 percent). It should be noted that these new instants contain very little coffee (often below 5 percent), so even if their increase is an important trend, the impact on coffee volume sales will be small or even negative.