Market Update: Q3 2024
Production and Export Trends
Brazil, the largest coffee producer globally, projected an upward trend.
Brazil, the largest coffee producer globally, projected an upward trend in coffee production for the 2024/25 marketing year. Favorable weather conditions led to an expected increase in production by 5.4%, which could reach 69.9 million 60-kilogram bags. This growth is anticipated to bring higher-than-normal revenues, estimated at $10.7 billion. Brazil's coffee exports also surged, driven by increased demand from countries like Vietnam and Indonesia, which faced their own production challenges (Daily Coffee News by Roast Magazine).
Sustainability & Innovative Initiatives
Coffee companies continued to push for sustainability.
Nestle introduced the Star 4 arabica coffee variety in Brazil, aimed at producing high-yielding and resilient beans. This move is part of broader efforts to address the challenges posed by climate change and to meet the rising global demand for coffee. Additionally, major coffee brands like Starbucks, Dunkin’, and Peet's participated in California's reusable cup share scheme, starting in August, aimed at reducing the use of single-use cups (Roast Love).
Innovation continues to shape the coffee industry, with August witnessing the introduction of new technologies aimed at enhancing the consumer experience and reducing environmental impact. Philips launched a new bean-to-cup barista machine in the U.S., designed to minimize waste while offering a high-quality at-home coffee experience. Additionally, Olympia Express introduced the Mina, an electricity-free portable espresso maker, catering to eco-conscious consumers (Roast Love).
Market Expansion and Consumer Trends
North America is leading specialty coffee growth.
August also saw notable shifts in consumer trends and market expansion. The specialty coffee market continues to grow, with North America leading the charge. The U.S. market, in particular, is seeing a surge in demand for cold brew coffee, which is increasingly popular among younger consumers. This trend is driving innovation in product offerings, such as new bottled cold brews and unique coffee blends that cater to diverse palates (ScottMax) (Coffee Affection).
Emerging markets in Asia and Eastern Europe are also showing increased demand for coffee, driven by rising disposable incomes and a growing affinity for Western lifestyles. This presents a significant opportunity for coffee brands looking to expand their footprint (Roast Love).
Regional Export Disruptions Amid Yemen Conflict
The ongoing conflict in Yemen is having a ripple effect on the broader region significantly disrupting coffee exports from Ethiopia.
As the conflict continues to escalate, vital trade routes through the Red Sea have become increasingly dangerous, leading to delays and uncertainties for Ethiopian coffee shipments. This situation has raised concerns about the stability of supply chains and the availability of Ethiopian coffee in global markets. As one of Africa’s largest coffee producers, Ethiopia’s export challenges are now adding pressure to an already volatile global coffee market, where other regions like Vietnam are also struggling with production issues due to adverse weather conditions (Roast Love) (Daily Coffee News by Roast Magazine).
Vietnam and Ethiopia remain focal points of concern. Vietnam’s coffee industry is facing challenges from adverse weather conditions, which could significantly impact global robusta supplies. Ethiopia’s ongoing conflicts have led to disruptions in coffee exports, further exacerbating supply chain concerns (Roast Love).
In contrast, Brazil’s ability to meet rising global demand despite logistical hurdles highlights the country’s resilience as a coffee producer. The increase in Brazilian specialty coffee exports, particularly to the U.S., underscores the growing consumer preference for high-quality, traceable coffee (Daily Coffee News by Roast Magazine).
References:
Daily Coffee News by Roast Magazine. "Brazil Coffee Report: Upward Prediction for Production, Exports and Revenue." Accessed August 2024. Daily Coffee News (Daily Coffee News by Roast Magazine).
Roast.Love. "Coffee Around the World: August 2024." Accessed August 2024. Roast.Love (Roast Love).
Coffee Affection. "18 Coffee Trends to Watch in 2024: Where Is the Industry Going?" Accessed July 2024. Coffee Affection (Coffee Affection).
Scott Max. "35 Coffee Industry Statistics To Know [July 2024 Update]." Accessed July 2024. Scott Max (ScottMax).
