Issue 7: Coffee Around the World

‍El Salvadorian current president Nayib Bukele launches a new high-end coffee brand, Bean of Fire, in the US, targeting US market sales. According to the president, the coffee brand launch has nothing to do with his political aspirations but a private venture, as he has always loved coffee. Further, experts argue that this move may be seen as a conflict of interest and even raises issues of ethics and legal concerns among US consumers.  

(Source: Daily Coffee News)

The International Labor Organization (ILO) partners with FAO, ITC, and Unicef for a US$10.8 million Child Labor in CLEAR Supply Chains Coffee Project, funded by the European Union (EU).  According to a Unicef report, 1 out of 10 children globally work as child laborers, with coffee, gold, bricks, and sugarcane workers significantly contributing to this statistic. The ILO-led project intends to focus on three major coffee-producing countries - Honduras, Uganda, and Vietnam - offering an integrated and area-based approach to address the root causes of child labor.

(Source: ILO)

Nestle has shared its half-year 2024 financial report, highlighting coffee sales as its key organic growth driver. According to the coffee giant, the company experienced median single-digit growth thanks to Nescafe, Nespresso, and Starbucks product sales. However, Nescafe’s overall sales still fell by 2.7%.

(Source: Nestle)

Mayorga Coffee has donated 30,000 coffee seedlings to small coffee farmers in Guatemala to support the local farming community. According to the coffee brand, the donation is expected to generate up to US$2.8 million in income for local co-op members and non-members who are beneficiaries of the donation. As part of the donations, the farmers received organic certified 70% Marsellesa and 30% Catuai, Caturra, Bourbon, Pacamara, and Gesha bean varieties cultivated from the Finca La Hermosa.

(Source: Mayorga Coffee)

Sucafina shared its 2023 Sustainability Report earlier this month, highlighting its accomplishments for the period. According to the green coffee trader, it supported nearly 180,000 coffee farmers, conducted deforestation risk assessments for over 167,000 farms, and raised over US$6 million to support farming communities.

(Source: Sucafina)

This year’s Cup of Excellence auctions in El Salvador and Costa Rica, which took place in July, saw the highest bid of US$122/lb for naturally processed GEsha and US$84/lb for washed Gesha, respectively. While over 198 lbs of coffee, rated 91.80 points, was purchased at the El Salvador auction for a total of US$20,899, the Costa Rican auction sold over 330 lbs of coffee from Kaldi Coffee Farm, rated 92.04 points, for a total of more than US$27,47. Meanwhile, at Ethiopia’s Cup of Excellence, the natural 74158 arabica variety from Sidama, grown at the BAsha Farm, received 90.50 points. Further, 27 other coffees scored 87 or more points, with their auction scheduled for 27th August 2024.

(Source: Alliance for Coffee Excellence 1, 2, 3)

The recent Hurricane Beryl left bad news for farmers in Jamaica. The category five hurricane wreaked havoc across the Caribbean, the Yucatan peninsula, and southern parts of the US, destroying up to 10% of the total coffee production, uprooting and bending coffee trees.

(Source: AP News)

Coffee Sector Performance Reports in the Coffee-Belt Region in July 2024

Fairtrade has stated the ongoing coffee price hikes. According to the organization, green coffee prices are expected to continue increasing, further disrupting the supply chain and adding extra pressure on the farmers and coops - despite the price hike working to their advantage. 

(Source: Fairtrade)

Large stakeholders in the coffee industry have also voiced their concerns over the continued rising coffee prices. The Lavazza chairman warned that the prices may continue to rise well into 2025 due to supply shortages in Vietnam and weather challenges in Brazil. Further, the coffee giant’s head reiterated other stakeholders’ concerns over the upcoming EUDR implementation - speculating that it will further increase the prices. 

(Source: Bloomberg)

At the start of July, arabica coffee futures were still up 30% after dipping from their two-year high. This was partly due to robusta shortages (from Vietnam and Indonesia). Meanwhile, Brazilian production concerns also contributed to the sharp decline of arabica prices.

(Source: Bloomberg 1, 2)

Meanwhile, the Robusta prices experienced a hike this month as traders continued to track the weather in Vietnam. The drought-stricken largest producer of robusta in the world struggled with limited produce due to the weather challenges, damaging many coffee plants. There have been promises of expected rainfall that will raise the moisture levels. However, some experts argue that there may be exaggerated expectations of production increases. In Brazil, producers continue to experience poor harvests due to drought. The leading global producer reports many smaller bean harvests due to heat and drought stress on the plants. 

(Source: Bloomberg 1, 2)

However, it's not all bad for coffee production in Brazil. Heavy rainfall in the Parana and Sao Paulo regions has helped increase harvest output. A report by Cepea suggests up to 60% of the 2024/25 harvest is complete with a higher yield, although quality has dropped this season. In the Espirito Santo region, robusta coffee harvests for 2024/25 are complete. Elsewhere, the Safras and Mercado regions have reduced their estimation for this year’s total harvest (2024/25) to over 66 million 60kg bags. This brings down the previously estimated harvest by 4 million bags. 45 million bags of arabica are expected to be harvested, while robusta estimations stand at 20.7 million.

(Source: CEPEA and SAFRAS)

In Vietnam, coffee production and exports are expected to remain low due to weather challenges towards the end of the year. While drought is currently the issue, the expected La Nina, which will bring about heavy rainfall, is also expected to disrupt exports further. The Vietnamese robusta coffee industry is expected to start recovering towards the end of 2024—at the very least.

(Source: Bloomberg)

Despite wavering production and exports, the coffee consumption market is still thriving. The global cold brew coffee market is projected to grow by nearly US$520 million in the next four years, with North America accounting for 60% of the total market. 

(Source: Technavio)

Africa’s largest coffee producer and exporter, Ethiopia,  has been experiencing its share of export disruptions due to the ongoing Red Sea conflict. Reports of frequent missile attacks and other security risks have forced shippers to halt shipments across this route. Thus, the availability of Ethiopian coffee in the US may become scarce over the next few months if the problem persists.

(Source: Royal Coffee)

The EUDR Updates

Despite recent external pressure from stakeholders in Europe and worldwide, the EU has not shown signs of slowing down its intentions for the upcoming EUDR implementation—the commission has no plans to delay the upcoming deforestation regulations. 

Not all stakeholders oppose the EUDR’s schedule enforcement. Nestle, Ferrero, Mars Wrigley, and Tony’s Chocolonely have supported the upcoming EUDR implementation. Further, multinational companies have called on the EU to support businesses in transitioning and complying with the regulations before the deadline.

.(Source: Reuters and The Print)

The Green Approach Commitment

More stakeholders in the coffee industry continue to adopt a more green approach to coffee cultivation and production. 

As part of global efforts to look for alternatives for more climate-resilient arabica coffee varieties, the World Coffee Research (WCR) announced its completion of the first F1 hybrid trial. The organization completed the cross-breeding phase of its four selected finalists, which includes a cross of high-performing Gesha and Sarchimor varieties chosen for their cup quality and excellent yield. According to the organization, these four hybrid varieties will now go through a pre-commercial trial phase to explore opportunities with key industrial partners.

(Source: World Coffee Research)

Starbucks, Dunkin’, and Peet Coffee continue to contribute to a greener coffee sector. The three coffee brands have begun to participate in California’s reusable cup share scheme. Through this scheme, coffee consumers who use the brands will use more than 60 return points in the three-month initiative, starting August 2024, to reduce the use of over 50 billion single-use cups discarded in the country annually.

(Source: Fermag)

Product Launches, Mergers, and Acquisitions in July 2024

Check out Bacha coffee on Amazon US to try more uniquely flavored coffee. The iconic Moroccan brand features a selection of over 2000 coffee products on Amazon, which include single-origin and incredible Moroccan blends. 

(Source: Bacha Coffee)

Onyx Coffee Lab has partnered with New Belgium to create a coffee-flavored sour beer. The innovative product features a folder-aged dark sour ale with Onyx yellow honey processed beans cultivated in Las Lajas, Costa Rica. The beer develops tasting notes of raw sugar, molasses, peach, and fresh fibs.

(Source: My Beer Buzz)

Blue Bottle Coffee has launched a new NOLA Craft Instant Coffee Blend, which includes chicory, as an homage to the New Orleans-style cold brew.

(Source: PRNews)

Stumptown Coffee has partnered with LAIKA, a film animation company, to release the limited-time Coraline Cold Brew. The cold brew’s packaging features an illustration inspired by the 2009 Tim Burton film “Fantastic Garden” scene filled with Stumptown Coffee’s award-winning cold brew. You find the limited-time brew across major grocery stores.

(Source: PR News)

Nestle has developed a new high-yielding Star 4 arabica coffee variety to find more resilient arabica varieties and meet the rising global coffee demand. According to the food giant, the new variety was developed using traditional breeding methods and grown in Brazil to produce larger-sized beans with more desirable flavors. 

(Source: Nestle )

Philips has launched a bean-to-cup barista machine that focuses on reducing wastage in the US market. The home espresso maker features a single swipe operation and is great for crafting a wide range of espresso-based drinks. It also comes with a separate milk frother. 

(Source: Multivu)

Swiss espresso equipment maker Olympia Express launched a new Mina portable espresso maker as the first electricity-free portable coffee device. Currently available for pre-order for $999, the coffee machine comes with a travel case and it disassembles to pack into it.

(Source: Daily Coffee News and Olympia Express)

Korean coffee brand Coffee Banhada launched the first innovative robot barista drive-thru store in South Korea. The 24-hour drive-thru store lets customers order 206 beverages and bakery items using an app. 

(Source: The Globe and Mail)

Known for its uniquely appealing Javabot green coffee-to-cup automation system, the Roasting Plant Coffee brand has US$10 million in funding for US and UK expansion. Currently, with 15 locations, including Newyrok, Detroit, Washington DC, and London, the brand intends to expand to other locations, including Chicago.

(Source: Daily Coffee News)

Botristahas secured a US$120 million investment to improve its AI-driven technology for beverage preparation. The funding will help expand the brand’s automated beverage platform and allow outlets to serve over 2000 crafted drinks from a single machine. 

(Source: PR News)

Dunkin’ Donuts hit its 4000 outlet milestone by adding the latest NextgGen outlet in  Jacksonville, Florida. According to the brand, the 2018 launched NextGen outlet models feature energy-efficient designs, digital order kiosks, and dedicated mobile order pick-up areas. 

(Source: Dunkin Donuts)

Nespresso launches immersive retail locations. With their Texas locations as the first one, this new generation of immersive locations features consumer-centered interactive elements on education, particularly for Gen Z and other customers eager to learn about coffee.

(Source: Food Dive)

Mark Wahlberg joins the long list of celebrity coffee brand owners. The iconic Hollywood actor is an investor and brand ambassador for fellow actor Cole Hauser’s Free Rein Coffee. What makes this brand unique is its core approach to supporting veteran causes, with the main mission to “ Serve Those Who Serve.”

(Source: PR news)

McDonald’s Canada launches a budget-friendly C$1 coffee for on-budget consumers. The $1 coffee gets you McCafe’s Premium Roast Coffee and comes amid the brand’s 5% year-on-year price increase in food and beverage outlets. It also comes amidst the brand’s 2% decline in out-of-home food and beverage sales in Canada.

(Source: EconoTimes)

Unusually Interesting July Coffee News

A recent study by CashNetUSA found that Maine is the cheapest US state for coffee. According to the report, AMine has an average coffee price of $2.60, below the national average, while South Dakota has the most expensive average, at $3.79 per cup. Meanwhile, Irving, Texas is the cheapest US city for coffee with an average of $2.13 per cup while Eugene, Oregon is the most expensive, with $4.39 per cup average.

(Source: Cash Net USA)

A recently published public health study found that income uncertainty experienced by smallholder coffee farmers negatively impacts their mental health due to the increased risks of financial problems and poverty. The study focused on small-scale Vietnamese farmers who have recently been impacted by disruptions in harvests and exports. However, researchers suggest that the same results can be applied to other low—to medium-income countries that rely on commodity price-driven agriculture.

(Source: American Journal of Agricultural Economics)

Another recently published study shows coffee’s high potential to combine conservation and production. According to the study, coffee growing in farms with more than 30% shade offers higher species diversity than sun farms with less than 5% shade. This shows that shade-grown coffee offers more value for wildlife, particularly mammals, birds, insects, and epiphytes. The study further suggests that shade-grown coffee farming can help maintain connectivity in conservation while optimizing yields. 

(Source: ScienceDirect)

Researchers continue to explore high-elevation robusta as a replacement for arabica. While some scientists focus on breeding new arabica varieties adaptable to the changing climate, others have chosen to explore robusta as an alternative as the variety grows in production (up to 30% in the past decade). Robusta doesn't only produce more beans than arabica. It also uses fewer resources, such as water and fertilizer. Yet, scientists are still exploring ways to meet the demand for the same quality as Arabica and the productivity required by the coffee chain. According to researchers, robusta is a viable option for sound production, flavor scores, and high altitude adaptability. As experts continue exploring various cultivars, more emphasis should be placed on sustainability, quality, and plasticity.

(Source: Phys.Org)

A recent study found the relationship between coffee, sitting, and mortality. Over 13 years, the study established the link between prolonged sitting (up to 8 hours a day) and risks of death from issues such as cardiovascular disease. According to the study, adults have a 46% higher risk of all-cause mortality and up to 79% CVD-related deaths compared to those who sat for less than 4 hours. Interestingly, the same study suggested a decrease in the mortality rate for coffee consumers to 33% less likely to die of any causes and 54% less likely to die of CVD.

(Source: BMC Public Health)

Important Coffee Dates and Events for August 2024

International Coffee Convention - 17th and 18th October 2024

This year’s International Coffee Convention is scheduled for the 17th and 18th of October, with the theme of “Coffee in Transition.” Among the key themes of this year’s conventions are addressing commercial coffee species viability, land use, deforestation policies, sustainable use of coffee by-products, and coffee’s nutritional impact and health claims. You can get more updates HERE.

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