African Coffee Market Situation & Opportunities

Being a coffee producer means living a life of uncertainty. While measures can be taken to improve quality and therefore prices, the truth is that market trends and harvest yield/quality are unpredictable. However, there are strategies we have seen in action that can boost demand for coffee, and sustained increased demand will lead to greater supply by encouraging producers.

Background

For importers domestic economic conditions determine coffee consumption. Some great booming countries including China and India, have managed to curb the economic downturn they have suffered in the past couple of years and have bounced back slightly. The slowdown in the economic activities of China has stabilized and growth should logically be maintained around 7.5% in the next few years. India posted its lowest growth over the last twenty years, which was accompanied by significant deficits in the current account and the government budget, in addition to high rates of inflation. But it is expected that growth improves to exceed 5% in 2014. In Russia, growth again declined in 2013, while industrial production and investment were in regression and expected to recover slightly to reach 2.9% in 2014.

coffee shop suppliers
Understanding major consumers is essential

These factors suggest a rise in global growth. The development of international trade is projected to pick up slightly to reach 4.7% in 2014. Forecasts show that the prices of most commodities will remain unchanged, although an unexpected jolt from the supply side, including geopolitical tensions, could drive up these prices.

Domestic consumption in the exporting countries is experiencing a strong momentum, from about 30 million bags in 2003/2004 to 43.69 million bags in 2012/2013, i.e. an increase rate of 45% over a period of ten years and an average increase rate of 4.5% per annum. In African countries, consumption is quite negligible, even in the major producers of the continent, except Ethiopia, consumption remains weak. The main obstacle to coffee consumption in these countries seems to be the lack of knowledge of the product (coffee) and its health benefits. People have only prejudices to coffee consumption.

Recommendations & Opportunities

1) Creating demand

To boost consumption in producing countries, a promotion strategy should be put in place. This strategy can be developed and implemented by networks of Aroma Coffee affiliated coffee merchants; they can be roasters, a network of cuppers for quality of the product and a network of distributors.

The first aspect of the promotion strategy is communication:

  • Organize public lectures in schools on Coffee and Health. These conferences could also be held in towns, in large meeting rooms.
  • Organize public events for youth with artists emphasizing Coffee consumption.
  • Organize coffee fairs.
  • Television and radio broadcasting programs on coffee virtues during listening hours.
  • Advertising displays in schools, hotels, airports and public places.
  • Create Coffee Clubs in schools and universities.
  • Serve coffee as first drink in hotels.
  • Establish coffee breaks of about 10 minutes in public and private administration

All these communication activities, advertisement and marketing will contribute to change coffee’s image.

Coffee production is in decline in Africa

2) Distribution

Distribution points should be created among the population, hence the idea of creating coffee kiosks in neighborhoods, schools and universities. There must be put in place a network of distributors and training for the employees in coffee making. There is a need to have vending machines in schools and bus stations.

Above all, there should be a focus on quality local processing. All these communication activities, advertisement and marketing of distribution will contribute to boost coffee consumption in your particular country. At Aroma Coffee we have seen the benefits of these strategies by working with coffee merchants, over the course of a relatively short time, demand for coffee is increased and our partners are in a situation to meet that demand.

Aroma Coffee is leading the way on some initiatives, but we believe in the greater potential of coffee and that a network of highly motivated and skilled people can completely change the nature of coffee consumption and production on the continent.

If you are in an African country and are interested in joining the effort then get in touch at admin@aromacoffee.ae

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