What’s Keeping Producing Countries From Growing Coffee Consumption?
Increasing the volume of internal consumption is something all producing countries can benefit from. However, many of these countries also face several significant barriers, ranging from a lack of consumer knowledge to logistical and bureaucratic hurdles.
With increased internal consumption offering significant advantages to producers and the coffee industry in general, understanding what’s keeping the local population from drinking more locally produced coffee is the first step towards helping producers to retain more money and increase their overall demand for coffee.
Here are some of the problems being faced, and what they mean for producing countries.
Lee este artículo en español ¿Qué Impide Aumentar el Consumo de Café en Países Productores?
A producer with a cup of coffee, and the beans used to make them. Credit: Café Compadre
Less Disposable Income
While many producing countries are making strides to grow their middle class and improve their citizens’ quality of living, many citizens lack the disposable income required to purchase quality coffee. For example, while Vietnam is the world’s second-largest producer of coffee beans and the World Bank estimates that about 70% of its population is economically secure – only 13% are middle class and have an income that covers discretionary spending. This means that for many, high-quality specialty coffee might be viewed as a luxury.
This is a reality in other producing countries as well, and in many cases, coffee isn’t viewed as providing sufficient value for money. Daniel Ochoa manages a coffee shop called El Cafecito in Quito, Ecuador. He says that “people can afford and are willing to pay for good coffee, but in a country like [Ecuador], where you can have a lunch [consisting of a] hot soup, second dish, juice and small dessert for US $2.50 to US $5.00, trying to sell espresso for US $2.50 to US $3.50 can be a bit complicated.”
Irina Orellana owns Ivo’s Café, a coffee shop in Los Naranjos, Honduras. She points out rural areas might experience less demand, as “ it’s difficult to pay US $1.25 for an americano. The prices in our coffee shops depend on electricity costs, rent, [and] taxes.” Some prefer instant coffee as it’s more affordable. Laban Njūgūna is the Founder and CEO of Zabuni Specialty Coffee Auctions, a company in Nebraska, USA that sources coffees from Africa for American roasters. He says, “less than 3% [of Kenyans] consume coffee locally… and the very few consumers that do drink coffee settle for imported instant coffee from Nestle, etc.”
Addressing this will mean educating consumers on the value of specialty coffee. It will also mean giving local producers finance incentives to sell their higher quality crops to local roasters and buyers before they offer it to international buyers – which will mean offering them a price that makes this feasible. Tim Willems is a Co-Founder of Bridazul, a business in Dipilto, Nicaragua, that supports local producers through coffee drying and commercialisation services. He says, “As long as the price paid for exporting coffee is higher than the price paid for coffee that’s being bought in-country, it’s an obvious choice for the producer [to export it]”.
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A bag of Colombian coffee for sale at Exigí Buen Café 2019. Credit: Exigí Buen Café 2019
Increased Bureaucratic Barriers
To encourage coffee exportation, many countries make it challenging for producers to sell it domestically. Martin Mayorga, Founder and President of Mayorga Organics, says, “Many coffee-producing countries have laws that promote export so much that it de-incentivises the development of internal consumption. Also, many coffee-growing countries are poor in comparison to many importing countries. This creates lower margin opportunities, so those with the financial resources to drive this change don’t have the incentive to do so.”
Some producing countries also restrict what producers can and can’t grow or export. For example, in 2013, a group of Colombian farmers from the country’s Western region sued the government for prohibiting them from selling their coffee internally. According to the article, at the time over 80% of all coffee consumed domestically was imported from Peru, Ecuador, and Brazil – even though local producers could meet this need with coffee of similar quality.
Reversing this will require assistance from the government and other governing bodies. Marcelo Pereira Magnere is an independent coffee quality consultant based in California, USA. He says while “the local economy and purchasing power are growing, the only reason coffee is not locally consumed is culture. This can only be solved by having [politicians] help the local roasters and industry, either through tax cuts, promotion, and education.”
A barista pours a latte at a coffee shop in Copán, Honduras. Credit: Gisselle Guerra
Insufficient Barista Training
Serving high value or specialty coffee is a one way that baristas can help open up discussions surrounding coffee as a product, as well as educating customers on the different beneficiaries and contributors involved in the coffee supply chain. It can also help put a face and story to the person behind the coffee, helping broaden customer’s horizons, and helping them understand why a premium might be charged for a certain cup.
If the people responsible for preparing and serving the coffee lack this kind of preparation, this won’t happen. Juan Mario Carvajal is the owner of Café Cultura, a café, roastery and barista school based in Santiago, Chile. He says that while he’s been working with producing countries for ten years and that the number of baristas has increased, many lack the necessary knowledge surrounding coffee and are used to dealing with low quality coffee.
Knowledgeable baristas will be instrumental in helping customers understand and accept the higher price accompanying specialty coffee. George Logothetis is Assistant Manager and Barista at Coffee Island UAE, a coffee shop in Jumeirah, Dubai. He says that for years, coffee shops and baristas used to provide customers with low quality coffee at a low price, and have suddenly switched to offering them higher quality coffees, and varieties at a higher price – without letting customers know that this has happened, and that higher-quality coffee comes with a higher price.
Having educated baristas strategically placed can significantly impact who takes up specialty coffee. Maximiliano Morales is a Business and Marketing Strategist who has significant experience in operating in the Chilean coffee market. He says that several baristas have started to offer specialty coffee as something consumers are willing to enjoy and pay for in coffee shops, businesses, and coworking spaces.
A barista prepares coffee at 4 Monkeys Coffee Roasters in El Salvador. Credit: Gisselle Guerra
Incomplete Consumer Education
While many factors impact how many local consumers choose to consume coffee produced in their own countries, all the efforts in the world won’t help if consumers aren’t willing to choose it over more affordable, but lower quality coffee-based beverages. For this to take place, roasters, café owners, and baristas will need to educate consumers on what specialty coffee has to offer them.
Daniel says “we need to educate our customers [on] good coffee. However, we need to do it from the bottom and with humility, [as] there is no bad coffee, only different market niches. Who are we to say to a 60-year-old that the bitter coffee they’ve been drinking all their lives is bad? So, education is important – but with the right approach. People… won’t notice vanilla, berries, and plums notes, but will… notice the difference with a balanced coffee”.
Some consumers could be used to adding sweeteners and milk to their coffee to conceal the taste and might need to be educated on the fact that specialty coffee can often be consumed by itself. Ronald Cortez is the Founder of Cortez Café, a coffee shop in Arizona, USA. He says, “There is a lot of drinking and preparing coffee education needed for [the] vast majority to get the subtle difference between fine and not so fine coffee. As long as there are retailers pursuing heavy sugar and milk-based drinks, [the advance of] specialty coffee will be delayed.”
This is something that could not only increase demand in roasteries and cafés, but also in consumer’s homes, as they start to take an interest in brewing coffee using their equipment. Rosario Juan is the Chief Extractor of Coffee at Commune Café in Makati City, in the Philippines. She says that her shop is swamped with customers wanting to try specialty coffee and that there’s an increasing interest in quality local coffee. She says, “There’s also a growing home brewer market composed of enthusiasts hunting for coffee and stocking up at home.”
A producer drinks a cup of coffee. Credit: Café Compadre
There are many barriers to increasing coffee consumption in producing countries. Acknowledging them is the first step towards finding a way over them. However, it’s something that will involve customers, coffee shop owners, and other coffee supply chain members doing their part.
With the number of coffee consumers around the world set to rise domestically and on an international level, focusing efforts on increasing local consumption could help the coffee industry and its producers to profitably and sustainably produce coffee for years to come.
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Written by Janice Kanniah. Featured photo caption: A barista opens a package of Guatemalan coffee. Featured photo credit: Mikel Chateau.
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