For some, coffee is just a pumpkin spice latte (it is the season, after all) – but for others, it is deeply politicised. More than a product, coffee is also heavily politicised tool for economic development. USAID’s Coffee Alliance for Excellence (CAFE) will leverage $14 million over its 7-year partnership. Are foreign donors and governments helping farmers, pushing their own agendas, or both?
Over the years, coffee lovers have increasingly turned to the convenience of delivery services. However, once-absorbed “invisible” delivery fees are now being passed directly to the customer. Prices have surged by up to 30% for the same products. As venture capital dries up, consumers are left footing the bill.
FOR more than 24 years, the Specialty Coffee Association – the industry’s long standing authority on coffee quality assessment – has relied on a universal form. It has now evolved into the new Coffee Value Assessment form – released in 2023. The industry remains divided on whether it truly adds value to coffee evaluation.
Smaller product sizes for the same price might sound like robbery in broad daylight, but brands are getting away with it across various industries – including the coffee sector. Companies are scrambling to save their bottom line, and consumers are forced to comply.
“Dynamic pricing models” are becoming ubiquitous across industries, and consumers aren’t happy about it. As coffee businesses take up surge-style pricing to benefit their bottom lines, it may also damage consumers’ trust and loyalty to brands.
Auctions like Cup of Excellence offer specialty coffee producers an opportunity to gain international recognition, elevate their profile and improve the prices received for their coffees. However, despite the potentially large gains that can be made from programmes like these, they aren’t the right fit for every producer.
Skimping on quality and service in the name of efficiency and padding the bottom line has always been a go-to strategy for businesses, especially in times of economic stress – a phenomenon known as “skimpflation.” Investors are exacerbating the trend by investing in coffee shops embracing automation. But consumers are paying more attention to both quality and their wallets – so how long can it last?
Competitions and awards have enabled many individuals to become “big names” in the coffee industry – with significant influence over trends, innovations, and the popularity of certain products and methods. However, times are changing, and the “OG” stars and big names of the coffee sector no longer carry the weight they once did. Today, new generations of consumers want more diverse and authentic content and celebrate new industry voices.
Growing interest in coffee farms from the ultra-wealthy and powerful is hastening significant changes in the world’s largest coffee-producing country. As global economic circumstances worsen and coffee production and the industry at large become increasingly hard to maintain, let alone profit from, this begs the question – why? Brazil is one of the largest destinations for foreign direct investment, with a big focus on agriculture. And in the space of 2 years, China jumped from 20th to 6th largest buyer of Brazilian coffee.
Specialty coffee has long been associated with progressivism and left-leaning ideologies, helping to drive its identity in opposition to commodity products and large-scale industry. More politically outspoken coffee brands have recently risen in popularity. Black Rifle Coffee is now valued at more than $1.7 billion USD. As the global political landscape becomes more tense, politicised consumption will continue to grow.
Success for many specialty coffee roasters builds on community – capturing the attention and loyalty of their local markets. As they grow, some may seek to expand beyond their local regions and become national or international competitors. However, scaling up a business is a step that requires careful planning.
Once considered a product inferior to what the specialty market offered, instant coffee was reimagined as a product that could make specialty grade coffee accessible, and expand market share. However, high production costs and a saturated market mean specialty instant coffee isn’t the hit it hoped to be.
Taking a gamble on showy gimmicks is an old marketing trick – an easy (but expensive) way for brands to stand out and grab attention. But for some, they highlight an uncomfortable disconnect with the harsh realities upstream of the coffee supply chain. Despite this, investment in party tricks continues to flow as a core strategy for brand growth.
Change is afoot in Cuba. Once a big coffee exporter in the mid-1950s, its production and exports have been declining over the years. Today, some supply chain actors are trying to reverse this trajectory with a broader focus on improving long-term productivity.
For many, microlots are a defining feature of specialty coffee. With the coffee C price peaking, inflation and other factors squeezing roasters’ budgets, many roasters are moving away from microlots. They seek more financially viable options – though a niche market remains.
The RTD coffee market – projected to grow by 5.3% by 2028 – has huge potential for sweeter drinks. Gen Z - who have the highest purchasing power - want sweet coffee options and despite health concerns around sugar intake, coffee brands are listening.
Where is Starbucks’ olive oil-infused Oleato range of coffees today, a year after its release? Despite its surrounding controversy a few months into its release, it's still around and ties into a gimmick-based marketing strategy that is less about the product, and more about brand premiumisation and differentiation.
The “coffee origin trip” and its parties have long been considered to be an iconic rite of passage in specialty coffee. Now, rising costs and shifting priorities mean travel is no longer an "essential" for businesses. And for those who can still afford to go, the purpose is definitely more focused on business than pleasure - for both hosts and visitors.
Early "third wave" coffee business owners focused on novelty, networking, and building a brand. Today, those same actors have grown up, and their priorities have changed – and so has the industry's.
For a long time, third wave coffee businesses were able to compensate for a lack of financial savvy with passion for the job, a great network and strategic marketing. Today’s challenging economy has made the business of specialty tougher and roasters and business owners must step up to the challenge by working on their business acumen.
