How Coffee Makes the World Go Round

INFOGRAPHIC How Coffee Makes the World Go Round Coffee is an $80 billion a year global industry that ties the world together in a dense web of economic, cultural, and political connections. The humble coffee bean, which began spreading from Africa and the Middle East in the 16th century, is now grown in and exported from approximately 50 countries. Total worldwide production this year is expected to be 132 million 60-kilogram (about 132-pound) bags, which amounts to nearly nine million tons of beans. TRADITIONAL COFFEE-PRODUCING NATIONS Annual production Primary type of coffee produced 45 million bags Robustas 30 Brazilian natural Arabicas 15 O Colombian mild Arabicas Coffee accounts for a The majority of beans grown here are the less expensive, lower-quality Data unavailable O O Other mild Arabicas third of all exports in its legendary birthplace. Robusta varieties. -Vietnam 19.5M Ethiopia 7.5M Colombia 8.5M Brazil 48.1M Indonesia 9.1M Brazil has been the world's largest coffee grower and exporter since the 19th century. 'One bag equals 60 kilograms. 2010 production data are used for this chart. Sources: International Coffee Organization, International Trade Centre Supply and Demand The price of coffee has been on a roller coaster ride in the past few years as the world has struggled to recover from the global economic downturn. Price fluctuations the often imperfect match between demand, which has seen steady growth over the past decade, and supply, which is always cyclical and can be affected by major weather events in coffee-producing regions. like this are not uncommon in the coffee market due to Annual average price Production and consumption? (in millions of bags) (in dollars/kg) -- Production Colombian mild Arabicas Robustas -- Consumption Other mild Arabicas Brazilian natural Arabicas 140 $14.00 120 12.00 For much of the last decade, coffee production has barely kept up with demand. 100 10.00 80 8.00 60 6.00 From 2008 through 2011, coffee prices soared before softening demand in Europe and forecast of a record crop in Brazil caused a recent price drop. 40 4.00 20 2.00 1990 2000 l2010 2 World production and consumption data for 2012 are not yet available. 3 Prices given for 2012 are year-to-date averages. Source: International Coffee Organization 2011 WORLD CONSUMPTION While the bulk of the world's coffee is destined for traditional markets such as the U.S., Germany, and Japan, consumption in 137.9 million bags Exporting countries Traditional markets 17.9% exporting countries and emerging markets is growing Emerging markets4 30.8% three times as fast, and 51.3% accounts for much of the growing demand. 4 Map shows only the major emerging markets identified by the ICO. Source: International Coffee Organization Coffee Cultures between at-home and out-of-home consumption. Another major cultural divide is between instant and Coffee is a supremely social beverage, and people in different countries and regions tend to differ not only in how much they drink, but in what they drink and where. In Eastern Europe, the U.S., Germany, and France, the fresh-brewed coffee. Although instant coffee is still dominant in markets such as the U.K. and Russia, fresh- majority of coffee is consumed at home, but in the café cultures of the Iberian Peninsula, the split is more even roasted coffee has become more and more prevalent in the past decade in the U.S., Japan, and Brazil. COFFEE DRINKING HABITS IN SELECTED COUNTRIES5 Finland Sweden The typical Finn consumes 12.1 kgs, about six cups of coffee a day. The Portuguese are most likely to drink their coffee outside the home. 100 - Denmark U.S. Switzerland Italy 90 10 Austria rway - The Netherlands France Spain 80 Belgium 20 Portugal Jаpan Although it is the largest consumer of coffee, the U.S. has a fairly low per capita consumption. 70 Germany 30 Poland 60 40 Annual consumption (in millions of bags) 50 50 20 Greece 10 * 40 60 -5 Cafés and coffee shops are only just beginning to arrive in these former Soviet Per capita consumption (in kgs/year) 30 70 U.K. Union countries. 10.1-12.5 20 80 7.6-10.0 O 5.1-7.5 O 2.6-5.0 Ukraine 10 Traditional Turkish coffee is laborious to make, lead- ing more people towards instant coffee. Russia Turkey 90 0-2.5 100 10 20 30 40 50 % Drinking outside the home 5 The selection of importing countries by the international Coffee Organization is based on the following criteria: an average national consumption of at least 2.5 milion bags during the period covered by the study, based on information received from members, and the availability of statistical data. 2010 data are used for this chart. Source: International Coffee Organization United States: The Coffee King Although expected to soon be surpassed by Brazil as the world's largest coffee consumer, the United States coffee comes from South and Central America, millions of bags of lower-quality Robustas from Asia are remains the world's largest importer. While most of this processed into instant coffee. U.S. COFFEE SUPPLY AND DISTRIBUTION (2010, in millions of bags) Brazil 6.67 Colombia 3.16 Vietnam 3.83 Indonesia 1.35 Mexico 1.79 Germany 0.63 Guatemala 1.31 Peru Costa Rica Canada 0.88 0.72 0.60 Others 3.44 Domestic Production 0.077 Opening 4.57 Total imports 24,38 inventories SUPPLY 29.02 million bags DISTRIBUTION 28.94 million bags Closing 3.97 inventories Total consumption 21.78 Decaf - 13% Caffeinated 87% Gourmet/specialty 60% Non-gourmet 40% 6 Canada and Germany process and re-export coffee to the U.S. and other markets. 7 Hawai and Puerto Rico are the only places in the U.S. where coffee is grown on a significant scale. 8 The discrepancy between supply and distribution is due to rounding. Sources: International Coffee Organization, International Trade Centre, U.S. Department of Agriculture, The National Coffee Association Re-exports 3.19 China: Coffee's Untapped Market the country is still one of the smallest coffee consumers And while domestic coffee production in southem China is growing, the country currently exports more than it consumes. The U.S. is the world's largest market for coffee, but China is thought to be its largest potential market. Despite having 20 percent of the world's population, ANNUAL TRADE (in millions of U.S. dollars) I Tea I Coffee Import | Export 8 36 42 547 '06 '07 13 48 50 604 '08 18 65 69 682 '09 17 51 81 |705 '10 48 70 102 784 MARKET SHARE STARBUCKS GROWTH IN CHINA In 2009, nearly 99 percent of the coffee consumed in Premium coffee retailers such as Starbucks have been China was instant. Instant coffee giants Nestlé and Kraft making inroads in urban areas. Starbucks is currently opening an average of one new store every four days in controlled 82 percent of the market. China, with plans to increase that pace in 2012. Roasted 1-30 stores 1,500 stores 1% Nestlé 68% Kraft 14% 570 stores Instant 99% .... 48 cities 70 cities Others 18% April 2012 2015 (projected) Sources: International Trade Centre, Starbucks T.ROWE PRICE Produced with Inf graphics.com CONNECTIONS % Roasted coffee % Instant coffee