Global Coffee Market Overview, 2024-29

Market Dynamic

Market Drivers • Cultural Significance: Coffee holds significant cultural importance in many societies around the world. It is often associated with social gatherings, hospitality, and rituals. For example, in countries like Ethiopia, coffee ceremonies are a traditional practice that symbolises friendship and community bonding. Similarly, in countries like Italy, coffee culture is deeply ingrained in daily life, with espresso being a staple beverage enjoyed throughout the day. This cultural significance creates a strong demand for coffee, as it is not just a beverage but also a symbol of social connection and tradition. • Increasing Urbanisation: The global trend of urbanisation, with more people moving to cities and urban areas, is driving the growth of the coffee market. Urban dwellers often lead busy lifestyles and rely on coffee to fuel their day and keep them energized. Coffee shops and cafes thrive in urban environments, offering convenient locations for people to grab a cup of coffee on their way to work or during social outings. As urbanisation continues to increase, so does the demand for coffee, making it a key driver of the global coffee market's growth. Market Challenges • Social and Economic Inequality: One of the significant challenges facing the global coffee market is the prevalence of social and economic inequality within the coffee supply chain. Many coffee-producing regions are characterised by poverty, a lack of infrastructure, and limited access to resources and opportunities. Smallholder farmers, who account for a significant portion of coffee production, often face challenges such as low incomes, limited access to credit, and inadequate healthcare and education services. Additionally, there are disparities in wealth distribution and power dynamics within the coffee industry, with large corporations and middlemen often benefiting more than farmers from the sale of coffee. Addressing social and economic inequality is crucial for creating a more sustainable and equitable coffee industry. • Climate Change: Climate change poses a serious threat to coffee production worldwide. Rising temperatures, changes in rainfall patterns, and extreme weather events such as droughts, floods, and storms can negatively impact coffee yields, quality, and resilience. Coffee plants are sensitive to changes in climate conditions, and prolonged exposure to heat stress, pests, and diseases can lead to reduced productivity and increased vulnerability. Moreover, climate change exacerbates existing environmental challenges such as deforestation, soil degradation, and water scarcity, further compromising the sustainability of coffee production. Mitigating the effects of climate change and building resilience within the coffee sector are critical for ensuring the long-term viability of coffee farming and securing the livelihoods of coffee farmers.

Key Development

• September 2022: CoffeeB, a Swiss coffee brand, unveiled a groundbreaking innovation: compressed coffee balls heralded as "the next generation of single-serve coffee." These balls are wrapped in innovative seaweed-based material instead of traditional aluminum or plastic capsules, ensuring shape retention and sustainability. • January 2022: Starbucks marked a milestone by launching its first drive-thru in Italy in Erbusco, Lombardy. This initiative stemmed from a new collaboration between Percassi, Starbucks' exclusive licensee partner in Italy, and the Q8 service station company, showcasing Starbucks' expansion strategy. • March 2022: Melbourne's Beat Coffee introduced a specialty instant coffee packaged in single sachets, capturing the essence of quality, flavor, and convenience. This process preserves the coffee's vibrancy through freeze-drying, highlighting delightful caramel and honey notes in an instant format.