As demand rises for premium coffee, fears loom over how supply will keep up and the impact it could have on coffee prices. The International Coffee Organisation estimates current production of all coffee is 143 million bags, consumption in 2014 was at 150 million bags and growing.
LONDON, ENGLAND, UK (RECENT – 29 JANUARY, 2016) (REUTERS) – Coffee lovers across the globe could see the price of their favourite cup of premium coffee rise because the supply of speciality beans is struggling to keep up with demand, according to Allegra Strategies, food and drink market analysts based in London.
“There are some worrying concerns at the supply level. Certainly the massive growth of speciality coffee on a world wide basis is increasing at 12-15% worldwide, this is happening all across the globe not just in Britain,” said Jeffrey Young, Managing Director and founder of Allegra Strategies.
The European branded coffee shop market also showed stronger growth in 2015 compared with 2014. The total number of branded outlets is estimated at 19,472 stores, with 1,615 stores added in 2015. This represents growth of 9% per annum, according to Project Café16 Europe, the latest report from Allegra World Coffee Portal.
In Asia, the market also showed solid growth, with the total number of outlets estimated at over 14,300 stores in 2015. 2,040 outlets were opened across the region, representing 14% year-on-year growth in the last 12 months for the same period, according to the same report.
China is reportedly opening the equivalent of four new coffee shops a day. In Europe they’ve added 2,000 more in less than two years.
And last year the number of coffee shops in Britain surpassed 20,000.
There are other external factors that could further exacerbate the supply chain.
“We’ve got climate change, we’ve also got farmers who have to make economic decisions for their families and farms tend to be very small, there’s very low returns and hence they would perhaps prefer to work or send their children to work in the cities where they can earn more perhaps in the building sector and other parts of economies,” said Young.
Experts say the industry badly needs investment and a new strategy, but that could take years.
In the meantime customers are facing the prospect of paying more for their favourite cup of coffee and not everyone is happy about that.
“It would become more of like having a glass of wine that you just do once in a while as a luxury,” said Lassi Jarvela, coffee drinker.
“I already watch how many coffees I have a day so yes it would make a big difference,” added Elisa Kaczynska.
Steve Hall, Chief coffee buyer at Caravan, a wholesale coffee supplier and restaurant, said it was a real problem.
“If coffee production goes down the whole world is going to be screaming out for coffee and we’re going to have to look for other ways to get around this,” he said.
The International Coffee Organisation estimates the current production of coffee is 143 million bags, consumption in 2014 was at 150 million bags and growing annually by 2.5 percent.