Market Trends of Raw Coffee Beans Industry
Increasing Demand for Certified Coffee Drive the Production
Surging global demand for certified coffee is driving the production of coffee beans, largely due to rising consumer concerns over sourcing and quality. According to FAOSTAT, the production of coffee was 10.4 million metric tons in 2019, which increased by 10.8 million metric tons in 2022. Certified coffee gives the consumer assurance about the reliability of the product. These certifications offer various third-party assurances to the consumer regarding environment-friendly farming practices and the quality involved during the production of coffee. As a result, some of the coffee certification organizations, such as Fairtrade Certification, Rainforest Alliance Certification, UTZ Certification, and USDA Organic Certification, are engaged in checking the production procedures and supply chain of coffee. These certifications help improve the quality of life of workers and help them gain adequate market access through increased trade of certified coffee.
Many Fairtrade coffee growers also hold organic certifications, ensuring environmentally sustainable production. Approximately 25 coffee cooperatives in Indonesia are Fairtrade-certified, with 98% having organic certifications. These certifications create more market opportunities for coffee growers, allowing them to command higher prices from consumers willing to pay extra for sustainable coffee.
One of the most important certifications is the UTZ Certification or the Rainforest Alliance, which enables farmers to grow coffee while professionally supporting local communities and the environment. A key aspect of the UTZ certification program is traceability, meaning consumers can know exactly where their coffee comes from and how it was produced. This transparency makes consumers more likely to purchase certified coffee, driving market growth during the forecast period.
South America Dominates the Market
South America Dominates the Market
Brazil is the world's largest coffee producer and exporter in South America. According to FAOSTAT, coffee bean production was 3.0 million metric tons in 2021, which increased to 3.2 million metric tons in 2022. Due to its major production and exportation role in the global coffee market, Brazil has also been recognized for its commitment to quality and social sustainability parameters based on voluntary sustainability standards (VSS) and geographic identification (GI).
In 2022, Brazil held 29.4% of the coffee production worldwide, followed by Vietnam and Indonesia, with 18.1% and 7.4%, respectively. According to the Food and Agriculture Organization (FAO), coffee plantations in Brazil covered about 1,872,511 hectares in 2022. Minas Gerais, Espirito Santo, São Paulo, and Parana are the main coffee-producing regions. Brazil is the leading producer and exporter of coffee, growing over one-third of the world's coffee supply. Good weather conditions have generally prevailed in most parts of the Brazilian coffee regions, supporting fruit setting, development, and filling, thus resulting in likely high yields. In addition, the majority of producing areas are in the on-year of the biennial production cycle. Major producing states were favored by abundant rainfall volumes, improved use of good crop management practices, and clonal seedlings.
Brazil's major green bean export destinations include Germany, the United States, Italy, Belgium, and Japan. Other key exporters of coffee beans include Vietnam, Colombia, Germany, Indonesia, and Honduras. However, economic and social barriers play salient challenges for farmers to meet the quality standards and GI protocols among other market compliance tools, in addition to the correct value appropriation arising for quality sustainable adopted strategies by coffee farmers in Brazil.
