Market Trends of Coffee Value Chain Analysis
This section covers the major market trends shaping the Coffee Value Chain Market according to our research experts:
Surge in Demand for Certified Coffee Products
Considerable growth has occurred in certified coffee, especially in fair trade coffee, in major countries globally. The development comes from consumer concerns related to social, environmental, and health impacts associated with the production and distribution of coffee. Sustainable certifications allow consumers to express preferences for a more just and healthier environment with daily purchases of essential commodities, like coffee.
Due to rising consumer concerns regarding the sourcing and quality of coffee, the demand for certified coffee is increasing globally. Certified coffee is an assurance to the consumer about the product's reliability. These certifications offer various third-party guarantees to the consumer regarding environmental-friendly farming practices and the quality involved during the production of coffee due to rising consumer concerns regarding the sourcing and quality of coffee.
Several coffee certification organizations are checking coffee's production procedures and supply chain. Some of them are Fair Trade Certification, Rainforest Alliance Certification, UTZ Certification, and USDA Organic Certification. These certifications help to improve the quality of life of workers and help to gain adequate market access through increased trade of certified coffee.
Among all the certifications, UTZ Certification or the rainforest alliance is necessary, allowing the farmers to grow coffee professionally with care for local communities and the environment. The most important aspect of the UTZ certification program is traceability, which means that consumers can know exactly where their coffee comes from and how it was produced. This makes consumers more inclined toward purchasing certified coffee, fueling the market's growth during the forecast period.
Brazil Dominates the Production of Coffee
Brazil is appropriately nestled in the tropical zone, which is highly suitable for the production of coffee. According to a database published by United Nations Food and Agriculture Organization (FAO), coffee production in Brazil stood at 3.01 million metric ton in 2019 and it has increased to 22.9% in 2020 (3.70 million metric ton). The total area under coffee harvest in Brazil was recorded at 1,825,283 and 1,898,239 hectares for 2019 and 2020 respectively.
Furthermore, as per the ITC Trade map, Brazil was the largest exporter of coffee in the year 2021 accounting for 2,288,336 metric ton, followed by Vietnam, Burkina Faso, Colombia, and Germany respectively.
The country is a true powerhouse of coffee production. Brazil produces nearly 40% of the world's coffee supply and has been a key player in the global coffee market since time immemorial. Furthermore, many areas in Brazil have a climate perfectly conducive to coffee farming. Coffee plantations cover about 27,000 square kilometers of Brazil, with the majority located in Minas Gerais, Sao Paulo, and Parana. The country has also been witnessing a territorial shift from a concentrated production in the mountainous Minas region in the Southeast to the Central warmer Cerrado region in recent years. The harvest period ranges from April to September, as the temperature is optimal for the cultivation of coffee beans during this period.
