Coffee Consumption and Industry Strategies in Brazil

A Volume in the Consumer Science and Strategic Marketing Series

Luciana Florêncio de Almeida, Eduardo Eugenio Spers

• Publisher: Woodhead Publishing
• Year: 2019
• Print ISBN: 9780128147214
• eBook ISBN: 9780128147221
• Topic: Tecnología e ingeniería
• Subtopic: Marketing
• Index: Marketing

Coffee Consumption andIndustry Strategies in Brazil, the latest release in the Consumer Science and Strategic Marketing series, provides an overview of the coffee sector, focusing on marketing strategies, consumer behavior, and strategies for transforming coffee consumption, production and retailing. The book presents the importance of an academician-practitioner perspective to bridge the gap between scholars and managers, and between business schools and the entrepreneurial world.Appropriate for researchers in the fields of food retail and producing, food marketing, consumer behavior, consumer science, agribusiness marketing and strategy, food industry strategy, undergraduate and post-graduate students studying marketing, consumer behavior, strategy, agribusiness marketing and strategy, practitioners in the food industry, marketing managers, and marketing and strategy consultants, this book is a must-read for those contributing to the coffee industry.- Presents strategies for transforming coffee consumption, production and retailing- Addresses market outlook, factors and trends- Outlines coffee industry strategies through business cases that highlight innovative practices- Discuss and present the certification role in the coffee producing strategy and retailing- The coffee waves and the specialty coffee impact in the consumption and at the retail level- Studies the role of retail and the consumer- Includes questions and exercises based on case studies and concepts

Section 1

Market outlook, factors and trends

Chapter 1

Global coffee market: Socio-economic and cultural dynamics

Celso Luis Rodrigues Vegro^a,b,c; Luciana Florêncio de Almeida^{d a} Agricultural Economics Institute (IEA), São Paulo, Brazil
^b Brazilian Rural Society (SBR), São Paulo, Brazil
^c Industry Federation of São Paulo State (FIESP), São Paulo, Brazil
^d ESPM, Sao Paulo, Brazil

Abstract

Coffee stands out in the list of commodities traded in the international and national markets. Many nations have this drink as a mainstay in their economies, with a demand for the product growing in almost every region of the globe. Considering the farms that work in coffee cultivation, those of small size predominate, with a majority allocation of family labor in the management of crop harvesting. A compilation of statistics from 2012 to 2017 shows a more accentuated pace of consumption, especially among younger people, when compared to production, with a consequent shrinkage of total stock. Coffee consumption habits fit perfectly with the contemporary lifestyle, making coffee an essential commodity in the daily life of a considerable part of the world’s population. The phenomenon of “climate change,” apparently, could negatively affect this crop due to observed greater frequency of so-called climatic extremes.

Keywords

Coffee; Production; Consumption

1.1 Introduction

Commercially classified as an agricultural commodity, coffee is one of the most outstanding commodities in international transactions, as well as domestic supply, in terms of quantity and value. The major suppliers are located in developing countries, and the major customers are the developed countries, where coffee demand is concentrated. Edaphic conditions prevailing in the intertropical and equatorial belt of the globe determines the trade chain design for coffee transactions around the world.

Other agricultural commodities such as soybean, corn, cotton, and sugar are also extremely relevant in the world market for food and fiber, but unlike those, coffee is grown, harvested, and usually prepared by small farms with employment of family labor without the use of modern machines and equipment that are widely used in the earlier mentioned crops. In part, this characteristic stems from the occupation of coffee plantations in topographically more rugged areas that are naturally uninteresting for other crops considering the difficulty for substituting crop mechanization for human labor.

Once a coffee crop is installed, there is no predefined period for it to be renewed. For instance, it’s still possible to find some crops that are more than 100 years old in Brazil. Another characteristic associated with this culture is related to its capacity of offering environmental sustainability along with rural development (Global Coffee Platform, 2017).

Other peculiarities of coffee-growing and its market can be added. From an agronomic point of view, coffee is a very docile plant. Eliminating climatic extremes, it accepts water deficit (more for the Arabica variety than for Robusta), high temperatures (more for the Robusta variety than for Arabica), nutritional deficiencies, shading by other fruit and/or timber species (environmentally constituting the most sustainable production systems), pruning (soft and drastic), and defoliation during harvest or due to disease, and yet it might offer yields in a subsequent harvest.

Around 170 countries are coffee producers, and almost all nations consume it. This wide distribution of cultivation has not prevented a growing concentration of production in a few nations. Approximately 70% of the world’s supply comes from four countries: Brazil (Arabica and Robusta varieties), Vietnam (mostly Robusta), Colombia (Arabica), and Indonesia (Robusta). On the consumption side, United States, European Union, Brazil, and Japan account for two-thirds of the world’s demand for coffee (International Coffee Organization [ICO], 2017).

Agricultural commodities usually do not allow extensive storage as there is severe impairment in quality. Differentially, respecting the limits of humidity, luminosity, and temperature, coffee can be stored for decades and will still be found in reasonable condition for consumption. The nature of coffee allows coffee growers to use the harvest as savings, and many of them might store some bags instead of immediately selling them expecting to find better prices in the near future.

In the last three decades, there has been an increasing demand for coffee drinkers, with a more notable expansion of the habit of tasting coffee between the populations of Asia (from the central to the eastern portion represented by Japan) and the Arabian Peninsula. This “discovery” of coffee by these populations has shown a consumption growth rate of about 2% per year, above the vegetative growth of the world’s population (1.2% recorded in 2015 and declining) (ICO, 2017). Another relevant aspect is related to the peculiar inelasticity of the demand. In general, consumers are willing to consume independent...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• Contributors
• About the editors
• Foreword
• Preface
• Section 1: Market outlook, factors and trends
• Section 2: Coffee farmers perception and contribution: Certification and strategies
• Section 3: Coffee industry strategies: Case studies
• Section 4: Retail and consumer
• Index