With nearly 21,000 coffee shop outlets in the UK generating annual revenues of around £7.9b, coffee is big business. According to research from the Allegra World Coffee Portal, there has been 17 years growth in coffee and the coffee shop sector is one of the most successful in the UK economy. The Big 3 coffee shops, Starbucks, Costa and Cafe Nero make up more than 50% of the total share. Costa, the market leader added 171 outlets in 2015 and their turnover increased by 15%.
This all seems like good news. Unfortunately, the increased demand is not just a UK phenomena, it is happening all over the world. This is leading to a world-wide shortage that has the coffee bean counters worried. Bean production and consumption is measured in ‘bags’ (60kg bags to be precise). World consumption figures show that the European Union is by far the greatest consumer of coffee, last year the EU consumed 43.9 million bags of coffee beans, up 300,000 bags on the previous year. The USA, the next largest coffee drinking nation, consumed 24.1 million bags, up 500,000 bags on the previous year.
World production is struggling to keep up. Of particular concern is the output from Brazil which fell to 49.4 million bags from 54.3 million last year due to below average rainfall in the Espirito Santo region. Overall, according to the USDA Coffee World Market Trades report published in December 2015, world production is rising more than off-setting the shortfall from Brazil. However, this should give us confidence that demand will be met. Coffee, like most foodstuff, is highly vulnerable to climate change.
In a recent report published by Plos One, it stated: “Regional studies have shown that climate change will affect climatic suitability for Arabica coffee (Coffee arabica) within current regions of production. Increases in temperature and changes in precipitation patterns will decrease yield, reduce quality and increase pest and disease pressure.”
It may not take much to have a devastating year, enjoy your coffee while you can.
