Why one type of coffee dominates the global market

Instant Coffee Market Outlook

According to the latest report of the International Coffee Organization (ICO), the global instant coffee market in 2023 has had a fairly strong growth rate compared to previous years. Also last year, in Vietnam, roasted and instant coffee exports were about 90,000 tons, with an export value of about 510 million USD.

Một số thương hiệu cà phê hòa tan Việt Nam

Some instant coffee brands in Vietnam

2023 also saw coffee giants such as Starbucks and Nescafe launch premium instant coffee lines, targeting higher-end customer segments, signaling a positive shift in the industry.

Especially in Asia, where the coffee market is the fastest growing in the world, instant coffee is increasingly dominating the market. The main reason comes from the convenience and easy accessibility of instant coffee to consumers, according to Mr. Jose Sette - Director of the International Coffee Organization, shared via the Agricultural Market page.

In China, which is the region’s leading instant coffee market, consumers are placing more emphasis on price than on variety or preparation. “Instant coffee meets the unique needs of middle-income consumers who have a high coffee consumption capacity,” Greg Savarese, CEO of Sinotaste, told Perfect Daily Grind.

Instant coffee is also the first step to introduce consumers to higher-end coffees. Ms. Maria Eduarda Becker Pavani - Founder of Três Marias Company (United Arab Emirates), believes that high-end instant coffee can bring consumers great taste without the knowledge or conditions to make regular coffee. Sharing the same opinion, Mr. Hengye Li, representative of Secre Coffee Company in Guangdong (China), shared: "Many people choose instant coffee to better understand high-end coffee lines , then gradually switch to investing and purchasing coffee making equipment ."

To meet the demand for premium coffee, Ms. Cristina Madriñan, General Director of Buencafé Company (Columbia) believes that continuous innovation is needed to improve the quality of coffee in the instant coffee market. “New mergers and acquisitions between companies and the increase in capacity of global production facilities are showing the sustainable growth of instant coffee,” Ms. Cristina Madriñan added.

In addition, there needs to be a policy to encourage more brands to include instant coffee in their products, Eliana Relvas, a coffee consultant in Brazil, emphasized in Perfect Daily Grind. “ Our main goal is not only to encourage pure consumption but also overall consumption, including the inclusion of instant coffee as an ingredient in beverages , ice cream, capsules, functional foods …” she said.

Will coffee prices continue to rise?

With promising assessments of instant coffee, this is clearly a great opportunity for the Vietnamese coffee industry. However, in recent days, coffee prices in the world as well as in the country have continuously fluctuated in an upward direction. This is expected to affect the selling price of coffee products in the future.

At the end of today's trading session (11:00 a.m. on March 21, 2024), the price of Robusta coffee on the London floor, after many sessions of increase, turned down slightly, fluctuating from 3,302-3,379 USD/ton. Specifically, the delivery period for May 2024 is 3,315 USD/ton; the delivery period for July 2024 is 3,221 USD/ton; the delivery period for September 2024 is 3,150 USD/ton and the delivery period for November 2024 is 3,075 USD/ton.

Similarly, the price of Arabica coffee on the New York floor at noon on March 21, 2024 also tended to decrease slightly after the previous increase. Specifically, the delivery period for May 2024 was 182.40 cents/lb; the delivery period for July 2024 was 181.40 cents/lb; the delivery period for September 2024 was 181.00 cents/lb and the delivery period for December 2024 was 180.50 cents/lb.

Nguyên nhân một loại cà phê chiếm ưu thế vượt trội trên thị trường toàn cầu

At the same time at 11:00 am today, March 21, 2024, domestic coffee prices have decreased slightly but remain high. Currently, the average purchase price in the Central Highlands provinces is 94,000 VND/kg, the highest purchase price in Dak Nong province is 94,100 VND/kg.

Specifically, the purchase price of coffee in Gia Lai and Kon Tum provinces is 94,000 VND/kg; in Dak Nong province, coffee is purchased at the highest price of 94,100 VND/kg. The price of green coffee beans (coffee beans, fresh coffee beans) in Lam Dong province in districts such as Bao Loc, Di Linh, Lam Ha is purchased at 93,600 VND/kg.

Domestic experts assess that the hot and dry weather is forecast to continue throughout Vietnam's key coffee growing areas, causing high temperatures to raise concerns about the negative supply prospects for Vietnam's new crop. Meanwhile, Vietnam is currently the world's largest Robusta exporter. Therefore, the risk of supply shortage in the market continues to be the main factor supporting the increase in Robusta coffee prices in recent weeks.

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