Coffee roasted at Origin
In recent months, wonderful events have occurred in our coffee industry, including: we have a world barista champion, our specialty coffees are the stars of championships, the country’s championship cycle already has representatives for the world championships, the PRF was held in Medellín, ExpoEje just took place in Quindío, the IWCA (International Women’s Coffee Alliance) begins activities, the Medellín Chamber of Commerce held Café Fina Experiencia, and in all of these events the message that remains the same: “The market has changed, and that change also occurs in commerce and, above all, in coffee consumption habits.”
To discuss this, I think it's important to understand a little about how the coffee trade and consumption has evolved. Let's review this over time.
These stages, called "waves," refer to important changes in the coffee industry worldwide, as well as the cultural changes generated by coffee.
This term was coined by Trish Rothgeb in 2002 in the Roasters Guild publication, the first to define the three coffee movements as "waves".
For 2019, the same Trish speaks of la cuarta ola.
Like other historical divisions used to measure periods of time, each wave begins with a major change. For example, just as the world changed after the first industrial revolution and changed again after the second, the coffee industry transformed after each of these three waves. Each involved a novel and disruptive change.
Broadly speaking, these were the three waves of coffee:
- First wave of coffee (1800s): Coffee becomes a commodity, its consumption grows exponentially.
- Second wave of coffee (1970): American coffee giant Starbucks transforms coffee culture.
- Third wave of coffee (2000s): Coffee begins to be purchased based on its growing origin and production methods.
In the first and second waves of coffee, Rothgeb argues, there is a failure to deliver consistently high quality in every cup; in the third wave, the approach comes from the shops: “any shop that was trying to be what it wanted to be as long as it stayed true to itself,” Trish says, and it delivers on the promise of quality.
One of the gaps in the third wave, says Trish, is that it isn’t inclusive. “It’s about the personal excellence of cafes, baristas, and roasters, and doesn’t address the equality of minority groups on both sides of the bar. Today’s cafes, regardless of where they’re located, are places where women are less likely to be promoted to management positions than their male colleagues and where people of color are not welcomed, by staff or police.”
“Coming together is something that's missing in the third wave,” says Rothgeb. “If there's a fourth wave or a next wave, I've already seen a movement toward it. It needs to generate real change for everyone in the industry, rather than just a few individuals.”
Let's now review what is happening more specifically in our country:
The National Federation of Coffee Growers estimates that as of 2021, coffee consumption would increase to 2.8 kg per capita (https://federaciondecafeteros.org/wp/listado-noticias/consumo-interno-de-cafe-aumentaria-a-28-kg-per-capita-en-2021/ ).
An increase in consumption at younger ages demonstrates a generational shift in Colombians' approach to the national beverage.
The actual incidence of overall coffee consumption also saw a significant jump, from 86% in 2015 to 96% in 2021, almost reaching the population ceiling.
Analyzing only the population over 12 years of age, it is estimated that domestic per capita consumption would have increased to 3.4 kg over the same period.
As of December 1, 2021 (FNC Press) – By 2021, domestic coffee consumption in Colombia would have increased to 2.8 kg per capita, according to new calculations based on a rigorous study by the firm Reinova (For comparisons of this national aggregate with previous years, the FNC will carry out a retro-projection exercise that will be announced in 2022).
When calculating per capita consumption among the population over 12 years of age, the increase would be even greater, from 2.7 to 3.4 kg.
In the study itself, it was found that the incidence of coffee consumption increased from 86% in 2015 to 96% in 2021, i.e., almost reaching the population ceiling.
In fact, coffee-based beverages account for 40% of total beverage consumption, which also includes juices, water, soda, etc.
In addition to consuming more coffee, Colombians have also started doing so at a younger age, according to a study conducted by Reinova for the National Federation of Coffee Growers (FNC).
Comparing 2021 with 2015 and 2012, the jump in younger consumption is noticeable and reflects a generational shift in Colombians' approach to the national beverage.
For a better understanding, the 2021 study included the rural population in the survey. The results show that penetration levels are practically the same in rural and urban areas, although in the former (97%) it is slightly higher than in the latter (96%).
The frequency of coffee-based beverage consumption is also slightly higher in rural areas (6.03 days a week) than in urban areas (5.29 days a week); a similar trend is observed for the number of cups consumed per day: 3.7 in rural areas versus 3.3 in urban areas.
These positive figures are the result of efforts in recent years to increase domestic coffee consumption, as well as a growing awareness of the beverage's many health benefits.
All of this shows us more clearly that the "market changed", and we roasters must understand it from our work, and I believe we should focus on this with the concept of coffee roasted at origin.
To achieve greater equality in the coffee industry and ensure its sustainability over time, the benefits of this industry must reach all links in its chain equitably. I personally believe that producers should receive a higher percentage of benefits than the rest of the chain, as this is the only way to guarantee sustainability, and above all, the sustainability of coffee.
I believe that all roles involved in the coffee process, from cultivation to consumption, should represent the type of people they serve and, above all, be clear about their contribution to the stage in which they participate.
How to get these different types of people to consume coffee is a work in progress and a challenge. The customer base in this new consumption is made up of people who seek and can afford "better" coffee at a price that commensurate with what they are consuming. This process begins by engaging consumers so they question their consumption needs. Altering the seemingly counterintuitive communication that seeks a low price and leading them to understand the history of coffee. Understanding that coffee tells its story through every step it takes requires those of us involved in each stage of this beautiful process to be aware of and responsible for what we contribute and the value of what we receive. This value goes beyond the monetary. Or: How can we give a monetary value to the months a coffee farmer spends tending his coffee plantation? This part of the process is vital to ensuring that consumers have a quality product in their hands.
This new way of seeing the market, or fourth wave, if we want to call it that, will not be limited to the cup, it will be a total change in consumption habits, where the bean becomes the protagonist and does so through the stories it can convey, in today's world, where logistics and technology bring us closer, being able to have on the table of any consumer in the world, coffee roasted at origin, where there are no intermediaries that do not transform the product, is possible, and the fewer non-productive links the chain has, the value of the product becomes sustainable and allows more people to consume quality coffee at a fair price, regardless of where they are.
In a review of value addition in the traditional coffee commercial process, the following behavior is observed:
Table 1 Percentage of value addition in traditional market -source: own elaboration-
If we examine what happens when roasting is done at source, the process changes slightly, and we can see how this can impact the price for the end customer, while also minimizing storage and transportation risks.
Table 2 Percentage of value addition in fair trade
The difference in the delivery process to the end consumer is clearly evident: links are reduced, value is added at each step, and, above all, the greatest benefits are passed on to the producer.
Once this first part of the marketing process has been explained and taking into account the characteristics of consumption post-pandemic, it is observed in studies such as that of the global consulting firm Ernst & Young, which shows that around 33% of consumers will reevaluate the things they value most and 25% will pay more attention to what they consume and the impact it has on the planet. For these two reasons, in this first stage of the crisis, consumption in the fashion sector has dropped substantially, while that of basic necessities products has increased. This clearly shows that the determining factors in consumption are others, and this leads us to learn and understand other ways to reach the consumer, and what better way to reach coffee lovers than with coffee correctly interpreted from its place of production.
During 2020, consumers focused on enjoying their favorite coffees at home. They learned how to prepare them and better understand the extraction factors. All of this gives them greater discretion when selecting what they want to consume, and, above all, where they want to consume it.
If we want to participate in this new type of consumption, we must take advantage of our advantages as a producing country and understand the different global tastes, and bring these consumers a quality product, and no longer as producers of an unprocessed good, but rather deliver a quality product ready for consumption. To achieve this, I believe we must take into account the following factors:
- The raw materials we use must be traceable and of good quality.
- Be framed within the concepts of fair trade.
- Compliance is the most important thing.
- Product consistency is the basis for maintaining a market.
- Packaging ensures that the product remains in excellent condition, but the product itself must already be in that condition from the ground up.
- And none of the above is possible if the roasting process lacks the necessary technology and knowledge to guarantee the consistency and quality that consumers demand.
Now entering the world of roasting, we must learn from the consumer countries that buy our green coffee and roast it at the destination, using technologies that guarantee the consistency of the roast and, above all, its quality. We must fully understand where we can add value, and where we must learn to do it the same way initially, and then do it better as we advance in our learning process, thus boosting the market launch of Colombian coffees roasted at origin.
As a producing country, we have the advantage of being able to roast fresh raw materials. If we add to this the advances in the harvesting and post-harvest processes we have for specialty coffees, which allow us as producers to participate in auctions and trading tables with high prices for our green coffees, what could happen if from Colombia we deliver to the world coffees roasted at origin, using the technology and quality of roasting that can compete with roasts done in consuming countries, but without the risk of transporting unprocessed raw materials, and delivering the product directly to the consumer, through fully traceable fair trade mechanisms, in world-class packaging, where the consumer can even establish direct communication with the producer.
To achieve this, we must start with the awareness that we already have our own roasting technologies in Colombia that can compete with manufacturers in consumer countries who have more than 40 years of advantage in the knowledge of roasting processes, and from the use of this quality technology at prices in line with the reality of the Colombian market, where the value we pay is represented in the costs and development of the equipment, and not in an exchange process where the contribution of fixed costs are measured in foreign currency, as well as profits, we must compete equally from a technical and not an economic perspective, this allows us to participate in this new market for coffees roasted at origin on our own terms.
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