Many of us are aware that coffee consumption is rising. That’s good for producers, because rise in demand (with constant production or supply) puts upward pressure on coffee prices, potentially causing them to rise. However, countering the increasing demand for coffee-based beverages is a reduction in the amount of coffee beans used to make them.
Read on to learn more about how the reduced amount of coffee per serving could help soften the impact of increased global demand.
Lee este artículo en español Un Mayor Consumo de Café Quizás No Aumente Las Ventas Del Grano
An espresso-based drink with latte art.
A Potential Future Coffee Shortage
Coffee organizations in many producing countries are planning to expand planting to meet growing worldwide demand for the crop, which is coming particularly from the global east and emerging consumer markets. The increased demand for coffee is expected to significantly outpace supply. Without greater production, this would cause a global shortage, and, inevitably, a price increase.
In addition, climate change is expected to vastly affect the suitability of land for coffee production, which has some observers worried about future coffee shortages. Based on current estimates, if nothing is done between now and 2050, global coffee supply will be significantly diminished due to climate change.
If that occurs and demand projections hold true, the shortage created could make coffee a luxury item. We may nostalgically long for the days of free refills of diner-grade coffee.
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Coffee beans ready to be ground.
Different Brewing Methods Mean Less Coffee Per Serving
The impact of increased demand could be lessened by reduced coffee use in beverages. But why would people start using less coffee in their drinks?
One reason is the rise of single-serving methods, rather than batch brewing. Many homes and businesses around the world brew full pots or large carafes of coffee. What’s left at the end of the day, or whatever has been sitting on the hot plate for too long, is dumped out without remorse. Coffee is cheap, after all.
But in recent years, many homes and offices have switched to more precise single-serve brewers that use individually sealed packages of ground coffee. Although these capsules can create more waste volume than other brewing methods, they don’t waste coffee.
As the specialty coffee movement grows, many people have also invested in precision brewing equipment including scales, goose-neck kettles, and pour over devices. These also eliminate waste – when you go to the effort of making a hand brew with high-quality beans, you’re less likely to throw away half of it or brew more than you need in the first place.
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Brewing a pour over.
The amount of coffee used per drink is also related to trends started in the second wave, when consumers became much more familiar with espresso-based drinks. An espresso shot doesn’t necessarily use less roasted coffee than a cup of filter coffee, but as each beverage is made to order, wasted leftovers aren’t an issue.
Roasted coffee as a percentage of the total cost of a beverage is diminished as drinks depend more on condiments, syrups, milks, etc. This evolution is in no way negative, but when coffee market size figures in terms of currency include jumbo almond milk caramel creamsicle latte frappes as “one coffee drink,” we should adjust the impact on actual coffee demand.
Coffee grounds inside a Chemex filter.
The Impact of Using Less Coffee Per Serving
Using less coffee per drink is not always bad for roasters. Not only do single-serve capsules not waste brewed coffee, they also vastly reduce the amount of coffee used in making each drink. These pods contain just 5g of coffee, less than the 7–9g traditionally recommended by the SCA for a single espresso and as little as a quarter of larger filter brews. Capsules cost about US $1 in the US, the equivalent of about US 60 cents in Colombia, and the equivalent of about US 50 cents in Germany.
The lowest of these price examples works out to around US 10 cents per gram. A 12 ounce or 340 g bag of coffee at that price would be US $34, about double the price of high-end single-origin specialty coffee in most markets. So, if the roaster actually saw this price carried through the supply chain, single-serving capsules could be hugely profitable.
Pouring coffee into a cup.
Different Coffee Markets
We should also consider the diversity of coffee products within the projections. There is demand for single-origin microlots as well as for for 3-in-1 instant sweetened coffee with powdered milk, as well as many products in between. The coffee that is harvested and processed for each is mutually exclusive.
Several reports have predicted a polarization of demand, or a concentration in the very high and very low ends of the range of coffee quality. The growing popularity of specialty-grade and single-origin coffee has stimulated demand at the high end. It’s also raised the bar for what constitutes specialty, and therefore added barriers to entry for aspiring specialty growers.
At the other end, much of the new demand in the global east is for instant coffee and products that contain instant coffee among other ingredients.
Producers who offer coffee with cup scores in the low 80s in areas with a high cost of production could very well be left out of this polarized market. They would be unable to compete in the high-end market in terms of flavor and quality, but equally unable to compete on price for coffees destined for instant coffee powder.
Bags of green coffee beans.
The expected reduction in appropriate land to grow coffee and projected increase in global demand could be seen as hopeful prospects for farmers who have endured falling real coffee prices for at least 30 years. However, both are only predictions. And because more cups of coffee doesn’t necessarily mean more beans sold, it may be prudent to soften the overall demand projection, accounting for a potential reduction in coffee beans consumed per beverage.
Find this interesting? Check out How Much Should We Pay For Green Coffee?
Written by Karl Wienhold of Cedro Alto.
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