25th
Feb
2015

Posted in Kafevend Blog

We're all aware, at least to some extent, of the processing that coffee has to undergo to get from the coffee bush to the mug, but did you realize how much shorter the shelf life of roasted coffee is compared to the raw beans? It's not really a matter that concerns the majority of us, so it's unlikely to have been the subject of much thought, if at all. And yet this simple factor is of great significance to coffee growers; in today's blog we'll take a look at why.

Bizarrely, Germany is one of the world's foremost coffee exporting nations. In fact it exports a greater quantity than all the African coffee growing nations put together. Even odder, at first glance, is that Switzerland, while not exporting even a third as much coffee as Germany, earns almost twice as much for it. The Swiss conundrum is likely explained by the immense popularity of Nespresso pods in recent years. The price paid for the few grams of roasted coffee in each single serving all adds up quite considerably!

That accounts for Switzerland's huge profit margin then, but how does a non-coffee growing nation like Germany end up exporting so much coffee? We're back to the original point concerning the relative shelf lives of coffee at its various processing stages. It transpires that for many farmers, it's not just the wait to have their coffee collected, but the hold ups it then frequently encounters at ports such as Mombasa in Kenya. Containers can sometimes come to a stand still for weeks at a time. In some regions there is the additional problem for farmers of limited power supplies and water shortages which mean that roasting the coffee beans is simply not viable anyway.

By contrast, Germany, along with many other European countries and the USA, has the means to buy the unprocessed coffee, the facilities to roast it or turn it into instant and advantageous connections with the supply chain necessary to move it on at speed, with a much wider profit margin than growers in developing nations can dream of. The local growers are up against the might of the multinationals as well; a substantial section of the global market for roasted and instant coffee is dominated by just a handful of big names like Kraft, Nestlé and Procter & Gamble. The big brands have the resources and market insider knowledge to advertise effectively and solid brand loyalty from large swathes of the public. New companies have to find a way to penetrate the established market and appeal to the consumer. The odds really are stacked against them.

Nevertheless, while African growers are still largely exporting raw coffee beans that fetch a fraction of the price of roasted and processed coffee, Latin America has fared much better, due to the intervention of their governments to create favourable conditions for their coffee growers. In Brazil, for example, high export taxes have been imposed on unprocessed coffee since the '60s, whilst tax breaks were simultaneously introduced for those producing instant coffee.

Coffee holds a position as the most valuable and widely traded tropical agricultural product of all and there's no denying we all enjoy and rely on a cup of coffee.  It seems only fair then that the day should come when all coffee growers benefit fully from the fruits of their labour. Join us soon for a look at the steps the Fair Trade movement have made to try and even out the playing field.

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