The global coffee industry has seen remarkable expansion in recent years, with growing demand for coffee surging by 28.6 million kilogram bags, far exceeding production, Vanusia Nogueira, Executive Director, International Coffee Organisation told BW Retail World.
In the past three years, coffee production and consumption have surged, leading to a deficit in the market, she said.
According to her, climate change has disrupted production however, they are covering the gap with stocks. Countries like India, China and others drive this coffee consumption boom, which leads to the production struggle.
“We are facing a lower production than we were expecting,” Nogueira said. “We are increasing the production but not at the same speed as the consumption.”
The world average growth of coffee consumption is 2.1 per cent per year, however, over the last three years, this consumption in India has been increasing by 3.2 per cent.
In India, coffee production has grown by 50 per cent in the last 15 to 20 years. As per industry data, India is expected to consume 1.6 million bags Kilogram while producing 6.5 million bags.
Additionally, India being traditionally a tea-drinking nation, has witnessed a significant shift in consumer preferences.
“Younger generations are increasingly embracing coffee as a social and indulgent beverage. Coffee shops are becoming popular hangout spots, and the quality of coffee is on the rise,” Nogueira explained.
Major international coffee brands like Starbucks, Tim Hortons and Gloria Jeans have recognised this trend and are heavily investing in the Indian coffee market.
For instance, Starbucks has expanded to 333 stores across 41 Indian cities, and Tim Hortons plans to increase its presence to 120 stores by 2026.
Furthermore, while talking about coffee, Nogueira divided it into four main categories: arabicas, robustas, other milds and arabica naturals. In 2022-2023, 42 per cent of world coffee production, about 73 million bags, consisted of arabicas and robustas.
She said that India plays a vital role, primarily in robusta production, exporting approximately 3.2 million bags of green coffee in 2022, Nogueira stated.
“The people still taking more Arabica coffee than Robusta coffee,” she underlined.
While demand for arabica coffee is high, India is gaining recognition for its high-quality robusta beans. Robusta coffee, often considered a specialty coffee, is becoming increasingly popular. On the other hand, arabica includes famous varieties like geisha, known for its tea-like qualities, making it one of the world’s most expensive and sought-after coffees, she highlighted.