December 2, 2021

What is the fourth wave of coffee? Scalability, not science


The fourth wave of coffee remains an elusive concept in the industry. There are a range of definitions, all of which indicate change and evolution from the third wave.

However, while there are many interpretations, we’ve interviewed experts and come to a conclusion: the emerging fourth wave isn’t about taking the science of coffee to the next level, but instead about scalability. 

The fourth wave is about bringing higher-quality coffee to the masses; it focuses on expanding from a small corner of the market to bring it to more and more people. It is characterised by the commercialisation of quality coffee, which becomes more accessible and widespread in the process.

I spoke to Vanusia Nogueira from Brazil Specialty Coffee Association, Hernan Manson from the International Trade Centre’s Alliances for Action, and Matthew Swenson from Nestle to try and understand what the fourth wave is really about. Read on to find out what they told me.

You might also like our article on third wave coffee and how it’s different to specialty.

A coffee lab that will help shape the fourth wave of coffee.

What are the limitations of the third wave of coffee?

Trish Rothgeb, Director of Q and Educational Programs at the Coffee Quality Institute, has classically described the third wave as, in many ways, a reaction.

“It is just as much a reply to bad coffee as it is a movement toward good coffee,” she said in a 2002 publication by the Roasters Guild.

In the years since, the third wave has offered craftsmanship, specialty, and individuality to a coffee industry that was, until then, largely mainstream. This was a direct response to a new generation of consumers concerned with more transparency, better quality, and a desire for a product that catered to the individual, rather than the masses.

Limitations in scalability 

Hernan Manson is Head of Inclusive Agribusiness Systems at the International Trade Centre (ITC). He tells me that specialty coffee still represents a small percentage of overall consumption and targets small consumer segments. 

This means that however well-intentioned third wave coffee actors are, and however sustainable their practices, the volumes traded within it are still not enough to achieve true systemic change and turn coffee producers’ livelihoods around.

“Many third-wave actors are coming to accept that, to be successful, a certain economy of scale is needed,” Hernan says.

“For them, it means moving away from the ‘passion project’ characteristic of the third wave and towards a more commercial focus that can yield long-term profit.”

Exclusivity: “Too much sophistication can be daunting”

Vanusia Nogueira is the Director of the Brazil Specialty Coffee Association (BSCA). She draws an interesting parallel between the wine and coffee sectors to illustrate what is happening with the third wave and specialty coffee. 

“In the past, Argentina had the highest wine consumption per capita in the world,” she says. “When Argentina decided to add value to its Malbecs and other wines, it distanced itself from national consumers and made it less accessible. 

“While they rose to fame with their fine wines and increased exports, national wine consumption fell. I see a similar pattern in Brazil’s coffee sector now.”

She explains that the niche specialty coffee market is too far removed from the average coffee drinker. 

“For me, this is the limitation of the third wave,” she says. “Too much sophistication can be daunting for the average consumer group.”

The average coffee drinker – which understandably represents a large segment of coffee consumption – does not have the knowledge or tools to understand the nuances between the different brewing methods, tools, and varieties. 

“The price is not the obstacle,” she says. “The exclusivity is.”

A coffee worker harvests cherries in Ethiopia.

Is there a fourth wave – and what is it about?

While there is wide consensus on definitions of the first three waves of coffee, the fourth wave of coffee remains a blurred and debated concept.

“I think nobody really knows what it is,” Vanusia says. “People are trying to be more scientific and sophisticated, but also more inclusive. These are two concepts that actually work against each other and create confusion.”

The democratisation & commercialisation of high-quality coffee

Hernan is co-author of the ITC-Alliances for Action Coffee Guide, the International Trade Centre’s popular publication. This document recognises the fourth wave of coffee and defines it as “commercialising speciality” by scaling up the objectives and characteristics of the fourth wave.

“One aspect of the fourth wave is about democratising the consumption of specialty coffee,” he says. “It’s not just about specialty coffee from South to North, but also South-South trade and the creation of consumer markets in producer countries. 

“Specialty coffee is also gradually becoming more accessible to the average consumer – we are breaking down barriers.”

A cold coffee revolution

Matthew Swenson is the Director of Coffee at Nestlé. He says the “the science of coffee” isn’t really a part of the fourth wave, but rather a deeper extension of the third wave. 

This is because people going deeper into the science behind coffee flavour and terroir doesn’t disrupt, drive, or influence consumption levels on a macro level.

According to him, if there is a fourth wave, a key part of it is the “cold coffee revolution”.

Matthew says: “When we look at disruptive movements within coffee, the biggest disruption in the past decade has been cold coffee or RTD coffee. 

“Today, 50% of Starbucks beverages are now sold cold in their retail stores. A billion-dollar cold coffee category has developed mostly in the past 10 years. These are types of consumption disruptors that I think lay the groundwork for the “next wave” of the coffee industry.”

This “revolution” is transforming soft drink consumers into coffee drinkers as it becomes a viable cold option, and therefore massively influencing the consumption of coffee quality. It’s also worth considering that many of these RTD and cold coffee beverages are a healthier and naturally flavoursome alternative to sugary soft drinks.

Ultimately, a cold coffee revolution opens up new groups of consumers and will create new ways to drink coffee as it becomes viable all-year round.

Seedlings at a coffee farm.

Scaling up quality: Can it be done?

So, the fourth wave means that high-quality coffee is becoming more accessible, more available to the general public, and less focused on building an elite circle of coffee aficionados. 

As a result, more and more consumers are starting to accept that automation doesn’t necessarily detract from the quality of the resulting product. 

Mass premium pushing forward

It is only natural that the coffee industry innovates and expands to appeal to more new users. As a part of this, we’ve seen more commercial second wave or “mass premium” brands scaling quality and offer better products at more accessible prices.

At the same time, many third wave coffee brands are embracing a more commercial approach, and offering products such as capsules, instant coffee, and ready-to-drink options. 

Hernan explains that the Coffee Guide identifies the mass premium segment as a powerful agent for democratising good-quality coffee and scaling up the third wave business model. 

“Applying a second-wave commercial approach to the third wave greatly increases its socioeconomic impact,” he tells me.

“Developing the mass premium coffee market segment means tapping into a much bigger consumer group while preserving parameters of quality and sustainability.”

For Vanusia, the mass premium segment is good news. She says it has the capacity to buy large volumes, which is crucial for producers, and also make good quality coffee accessible to consumers, even on the retail market.

“In Brazil, we produce 9 million bags of coffee, premium and specialty combined. It’s a lot of coffee, and we need to shift it,” she says. “This premium segment has the potential to absorb producers’ supply of high-quality coffee.”

The co-operative model can “shift volumes” 

“However, while specialty prices are fantastic, producers need to shift volumes,” Vanusia explains. In other words: selling small volumes of high-quality coffee will not impact producers at scale. 

Vanusia believes that coffee farmers need to gather into co-operatives to leverage market power, and the market needs to value and evaluate this accordingly.

“The market needs to see co-operatives as intermediaries; organisations that are there to facilitate the process,” she explains. “The third wave often pushes this romantic vision of direct trade that is, in reality, quite restrictive.

“On their own, producers pay a fortune to ship let’s say five bags,” she adds. “Co-operatives have more experience and leverage, allowing them to make bigger shipments and bring down costs.”

Ultimately, it seems that selling more coffee at a fair price will benefit the coffee supply chain – and especially producers – far more than selling small amounts at a high price. 

As a result, the fourth wave’s focus on the wider commercialisation of quality coffee could help to inject more value into the supply chain at scale.

Coffee workers inspect coffee cherries.

Who will be the main drivers of the fourth wave?

The first and second waves of coffee were heavily driven by traders and large brands, because of their reach. They were all about growing coffee consumption and marketing a social ritual. The third wave was instigated by a movement of smaller independent coffee roasters and more conscious consumers. 

I asked my interviewees who is driving this commercialisation of quality with the fourth wave of coffee, and received a mixed response. The common thread across their answers, however, was that new trends in coffee will no longer be shaped by the private sector alone, nor solely by traditional coffee consuming countries.

Hernan tells me that for him, the fourth wave is about system transformation that enables higher consumer access to good quality products and more equitable market forces. However, he also says that this transformation will require partnerships between governance, production, brands, and consumers.

The brands

The most prominent figures in the fourth wave of coffee are likely to be the brands that are leveraging their market power and global reach to bring better quality to more consumers.

We can already see examples of this with Coca Cola acquiring Costa to launch a cold RTD “coffee Coke” beverage – tying in with the cold coffee revolution – and the consolidation of “classic” specialty coffee brands (such as Nestlé’s acquisition of Blue Bottle Coffee in 2017).

On the other side, there are also the classic second wave coffee brands who are trying to outline a focus on quality. Starbucks opening “Reserve” stores around the world (which sell single origin coffees) is a perfect example of this.

The consumers

According to Matthew, consumers will always be the driving force for any past, current, or future wave. 

“You’ll certainly have businesses and innovators that catalyse consumption trends, but ultimately it’s up to consumers to buy into the movement at scale,” he tells me.

He says that during the first two waves, brands supported and grew a consumer base that was already trending that way, simply by following their cues.

He compares this to the steady growth in cold coffee, which he says was already trending as an output of third wave cafes. Brands noticed that, and jumped on the wagon by developing new products.

The producers

Vanusia tells me that coffee producers will play a central role in the next wave, in terms of influencing trends and the geography of consumption. 

This, she says, is a result of new communication platforms that allow producers to get organised and lead the discussion. Some examples are events like the World Coffee Producers Forum and ICO’s Coffee Public-Private Task Force.

“Today, producers have a lot more market power because they can rally and communicate through these platforms; we find the solutions together,” she says.

“The pandemic played a big role in this. Before Covid-19, producers used to avoid these communication platforms and preferred to remain in their respective closed circles.”

She explains that producers are now more comfortable with virtual meetings, which has opened up communication and empowered them. 

“With this kind of approach, we can view producers as equal players in the fourth wave,” she concludes.

Darker roasts like these may be unpopular in the fourth wave of coffee.

The fourth wave of coffee, as with the three that came before it, is about a transformation. Its focus on the commercialisation and democratisation of high-quality coffee is already shaping the industry in a number of key ways. The “cold coffee revolution”, as Matthew Swenson calls it, is already upon us. 

Ultimately, breaking away from the exclusivity and elitism that has defined the wave will be a good thing for everybody across the supply chain. Producers, roasters, traders, baristas, and even coffee consumers – all will benefit from more people drinking better coffee.

You might also like our article on understanding single origin, single farm, nano lot, and micro lot coffee.

Photo credits: Meklit Mersha, Brazilian Specialty Coffee Association, ITC – Alliances for Action

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