Coffee is one of the most economically significant agricultural commodities in the world. According to data from the International Coffee Organisation (ICO), around 167.58 million 60kg bags were consumed between 2020 and 2021.
We know that most of the value in the global coffee market is created after coffee leaves origin. Figures from Statista predict that the revenue generated from the global roasted coffee market will amount to about US $334.60 billion by the end of this year.
Much of the value in particular is generated by roasting, after which coffee is marketed and sold. And although there are some roasters in origin countries, as the majority are based in consuming countries in the Global North, this is where much of the marketing takes place.
But why is this the case? To learn more, I spoke to four coffee professionals. Read on to find out what they told me.
You may also like our article on how producers can define sensory profiles for their coffees.
A brief history of marketing in the coffee industry
Although there are an estimated 25 million smallholder coffee producers in the world, farmers often don’t market their own coffee. There are a number of reasons as to why this is, many of which are complex.
Throughout the 1600s and 1700s, European colonial powers established the coffee trade as we know it. Part of this, in a much more rudimentary form back then, was marketing. The first printed advertisement for coffee is believed to have been published in 1652 by Pasqua Rosée, one of the first coffee houses in London.
This trend of marketing coffee in majority consuming countries continued over the following centuries. During the 1700s and 1800s, coffee was marketed as an “exotic” product that only the wealthy could afford.
At the beginning of the 20th century, however, in order to improve sales of roasted coffee, coffee businesses started to shift their marketing focus to meet demand. Coffee became more affordable and accessible to the masses.
From then on, in many major consuming countries (notably the US and across western Europe), coffee marketing evolved to continue its focus on the consumer. As such, even today, many just assume that by default, B2C marketing is the responsibility of roasters and coffee shops.
Why has marketing remained in majority consuming countries?
It’s no exaggeration to say that much of the marketing in the coffee industry comes from roasters and coffee shops, as these businesses are much closer to the consumer (even if they are B2B in some cases).
Norbert Niederhauser is the co-founder and CEO of Cropster. He explains why marketing in the coffee industry is largely the responsibility of roasters.
“Roasters market coffee because they have the last connection with (or are the closest to) the end consumer,” he says. “Many roasters also own coffee shops, so they have a direct line of connection with customers.”
As a result of this, coffee businesses in majority consuming countries retain most of the marketing expertise. Furthermore, many marketing and media industries are largely centred in the Global North, including Europe and the US. In 2021, the combined advertising spending of Europe and North America was over US $440 billion, while countries in Latin America collectively spent US $27 billion on advertising during the same period.
The business of roasting and selling roasted coffee is also inherently more profitable than growing and selling green coffee, for a number of reasons. It’s also worth noting that the coffee roasting segment is much more competitive than many other areas of the supply chain, whether B2B or B2C. As such, roasters have increasingly been pushed to use branding and marketing to set themselves apart in recent years.
Vanusia Nogueira is the Executive Director of the Brazilian Specialty Coffee Association (BSCA). “Producers sell raw coffee, but they don’t produce the final product,” she says.
“The BSCA promotes the trade and consumption of Brazilian specialty coffee, but we must do so in collaboration with those who sell the final product to consumers,” she explains. “Although we sell green coffee, we cannot sell the final product unless we work with other partners, including roasters.”
Coffee farmers largely sell green coffee to traders, roasters, and other professional green coffee buyers. As the audience is different and very much B2B, producers have had to use different marketing.
Moreover, the marketing industries in many coffee-producing countries are still relatively young compared to majority consuming countries, which have a much longer history of marketing. This is especially true for coffee production, which had little marketing presence before the mid-20th century.
Furthermore, as coffee farming provides a subsistence income for many, the opportunity to invest in marketing is often not viable. Even if producers do receive a large sum of money, the focus for a larger investment is likely to be on their farming infrastructure rather than their marketing techniques.
Additionally, most producers live in remote, rural regions which naturally makes it far more difficult to access consumer markets directly.
However, while most of the global coffee supply travels long distances to be roasted in majority consuming countries, roasting at origin is a growing trend. Operations such as Chica Bean in Guatemala and Big Island Coffee Roasters in Hawaii can roast coffee at origin and ship it internationally, thus retaining more of coffee’s value in producing countries.
How can producers scale up their marketing?
One of the biggest criticisms of the global coffee industry is that value is traditionally added once coffee has left the producing country. This largely means that farmers generally receive smaller proportions of the final price than other stakeholders. However, there are ways for coffee farmers to add more value at origin and increase the price they receive for their crop.
As we’ve mentioned, roasting coffee at origin is one of the many ways in which more value can be attained in producing countries, thereby potentially helping farmers receive higher prices.
Sunalini Menon is the President of Coffeelab Limited, and an Independent Director on the board of Tata Coffee, Asia’s largest integrated coffee company.
“Most roasters are based in coffee consuming countries,” she says.
Traditionally, this is because roasted coffee is an unstable product, meaning it can quickly lose its flavour. Green coffee is usually transported on cargo ships for weeks at a time. If roasted coffee were to be shipped in the same way, it would reach the end consumer as a stale product.
Besides roasting at origin, innovations in experimental coffee processing techniques have immense potential for producers to market more exclusive coffees. This is especially prominent in B2B marketplaces, as smaller-scale roasters usually have more interest in exclusive and rarer coffees than larger companies
In many cases, producers are also leveraging social media and digital marketing to promote these experimentally processed coffees.
Wilford Lamastus is the head producer at Lamastus Family Estates in Boquete, Panama.
“At Lamastus, we carry out various experimental processing methods, the latest of which is slow-dried anaerobic processing on raised beds,” Wilford says. “Roasters prefer to have different options, so we offer Gesha coffee processed in different ways.”
However, it should be noted that not all smallholder farmers have the capacity to carry out these experimental processing techniques.
Without adequate training and investment in sufficient infrastructure, the risk of financial loss is much higher. What’s more, there is no guarantee that there is a market for these coffees, and it is often costly to produce them anyway.
Challenges & opportunities to add value
Vanusia highlights that the ability to replicate consistent flavour profiles is essential for farmers who are seeking to market unique or experimental coffees in particular.
“There are marketing opportunities for these processing methods, as consumers are curious to try them, and new processing techniques can support branding strategies for the producer and their farm.
“However, producers must be able to replicate the unique profiles of experimentally processed coffees,” she adds.
Norbert adds how more advanced technology is helping producers to better understand how to control fermentation, ultimately creating a better quality product.
“Now, more than ever, coffee professionals are able to better understand how to control the variables involved in coffee processing.”
However, Sunalini highlights how producers should take great care when attempting to carry out experimental processing methods, especially if they typically use more traditional techniques.
“There are plenty of marketing opportunities, but farmers must understand this market and find out what consumers want first,” she says. “If producers can carry out these experimental techniques successfully and find the right market, then it will be a win-win situation for them and the entire coffee industry.”
Aside from experimental processing techniques, we can also consider roasting at origin. However, if coffee farmers want to start roasting and shipping internationally, the first port of call is to invest in establishing efficient distribution networks. This enables them to compete better with roasters based in coffee-consuming countries, as shipping times are then more likely to be similar.
However, developing these networks can be difficult, especially for smallholder farmers. As such, many producers may choose to not enter these international markets and strictly cater to domestic markets.
“We roast coffee in Panama for domestic consumption because we have a coffee shop at one of our farms,” Wilford tells me. “We’ve been roasting coffee for this coffee shop ten years and we don’t market the coffee we sell here internationally – we don’t want to compete with international roasters.”
Wider changes in the coffee industry
Although it’s not yet a widespread practice, more and more roasters are starting to operate at origin with a view to catering to international consumers. However, for roasters in coffee-producing countries, roasting for the domestic market is generally the most practical option.
“There are roasters in India and most of them cater to the domestic market,” Sunalini tells me. “Indian roasters understand the demands and preferences of local consumers, and green beans are readily available in the country.”
Norbert explains: “Producers can either roast coffee themselves or use local private label roasters to sell on the domestic market.”
Exporting roasted coffee internationally is possible, but it is difficult, especially when maintaining freshness is a concern. Roasters like Chica Bean, for example, deliver roasted coffee by air as opposed to cargo shipping. However, any delays can place these roasters at a disadvantage compared to roasters in consuming countries.
Ultimately, more than branching out into roasting at origin or experimenting with processing methods, structural changes are more important if we want to ensure that farmers receive higher prices.
Third wave coffee culture has a prominent focus on sustainability and transparency in the coffee supply chain. This includes a growing interest from consumers to become more aware of how much farmers are paid, as well as pushing for more financial equity.
For the coffee professionals who have the ability to do so, educating consumers on the entire coffee supply chain is the most significant way to support producers. In turn, consumers have the opportunity to become more informed and aware of the entire supply chain – particularly where production is concerned.
Marketing is an essential part of the coffee industry. And while it seems like the stage is set for much of it to remain with consumer-facing businesses, there is growing potential for it to scale up at the production end of the supply chain, too.
Although there are a number of challenges and limitations, opportunities for farmers to market their coffees are becoming more accessible. Ultimately, for other stakeholders across the supply chain, the best thing to do is simply provide support where you can – and represent farmers in a fair, authentic, and transparent way.
Enjoyed this? Then read our article on marketing in the coffee sector.
Photo credits: Lamastus Family Estates
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