Coffee is a wonderful drink that is loved all around the globe. Many people cannot start their day without a morning cup of coffee. There are countless debates on the dangerous effects of caffeine and claims that coffee reduces calcium content in bones and negatively affects the heart. Nevertheless, the beverage has a number of benefits as well: it contains valuable nutrients, energizes the consumer and enhances one’s performance. On a related note, in Eastern countries where a ban on alcohol is in place, consumption of strong brewed coffee is an integral part of any celebration. In Russia, as autumn starts, demand for coffee beans increases as well, since it is well-known that not only does the beverage give one an energy boost, it also generates a feeling of slight euphoria.
Among the top 10 countries in coffee output, Brazil ranks first, having produced 3.1 million tonnes of coffee beans in 2017. Brazil faced a 7.1% drop in harvest compared with 2016, but despite this, the country accounts for more than 33% of the global market in physical terms. Vietnam has been increasing its share, already supplying around 1.8 million tonnes and occupying 18.5% in global production.
The coffee plant is a heat-loving.tree. Air temperature in the winer season should be no lower than 12°С: otherwise, the plant may die. Therefore countries located beyond the equatorial and subequatorial belts are simply unable to cultivate said plants on an industrial scale.
Almost 40% of global coffee consumption falls on countries of the European Union, amounting to 2,554 thousand tonnes per year in absolute terms.
The US market occupies 24% in coffee consumption, or 1,547 thousand tonnes, ranking first in the world if EU countries are considered separately. It should be noted that every day, 2.3 million cups of coffee are consumed globally, and every fifth cup is drunk by a US citizen. There is no coffee culture in the US, but Americans drink the beverage more than any Europeans. Coffee is mainly used to accompany food: earlier it even used to be considered an alternative to water or carbonated drinks. Coffee ceremonies or long conversations with a cup of coffee are not common practice there. The Americans believe that one should spend no more than 5 minutes on coffee, and therefore it is in the US that coffee to go first emerged as a format.
In Russia, the beverage is rather popular as well: almost 300 thousand tonnes of coffee are consumed annually in the country. Since the 1990s, instant coffee of Columbian and Brazilian origin has been most popular. Today, the coffee culture has risen to a new level, driving growth in demand for and consumption of high quality coffee beans. More and more Russians prefer to start their days with a cup of fresh-brewed coffee or to discuss relevant topics in a café, sipping on a cup of coffee. The American model of consumption has firmly entered Russia as well, and coffee to go has become an integral part of life for local coffee lovers.
According to data for recent years, gradual growth in coffee production (from imported raw materials) can be observed in Russia. In January–November 2018, domestic companies supplied 57 thousand tonnes of coffee to the market, exceeding the volume supplied in the similar period of 2017 by 47%. In 2018, an increase to 62 thousand tonnes can be expected in production of coffee, which would be a volume almost 1.5 times higher than in the previous year. An expansion of domestic output localization has not only been occurring due to growing consumption, but also due to ruble devaluation leading to import of finished products being less profitable than purchasing raw materials.
The remaining volume of coffee consumption in the country is satisfied by imports of finished products from other countries.
Speaking of the dynamics of prices for coffee, one can observe gradual fluctuations without sharp jumps. In November 2018, natural instant coffee was selling at 241 rubles per 100 grams on average, which is slightly higher than in the similar period of 2017 (238 rubles). Compared with January 2016, instant coffee became 15% more expensive.
In November 2018, the average price per kilogram of coffee beans amounted to 1 thousand rubles, 5 rubles lower than in November 2017.
Fluctuations in the foreign exchange market no longer have a significant impact on coffee prices. In contrast, the VAT rate being raised to 20% in Russia in 2019 is expected to influence the price considerably.
According to the data available in the GLOBAS database, the top 5 companies occupy around 77% of the coffee market in total annual revenue, which amounted to 123.7 billion rubles in the year 2017.
The largest producer of coffee in Russia is “Orimi” LLC (Leningrad region, “Jardin” and “Jockey” trademarks), accumulating almost one third of total revenue in the industry.
Stable growth in coffee consumption and development in the culture of its consumption has been noted in Russia. This lead to the emergence of a new type of leisure involving coffee consumption in coffee shops, book cafés and art cafés, and brewing coffee at home is becoming a pleasant ritual for more and more people. Russia has confidently entered the global market for coffee consumers and has taken one of the leading positions within it so far.
Deputy Head of Analytical Department
“Credinform” Information Agency