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The Food Institute Blog

What's on the Horizon for the Coffee Industry in 2018?
Posted on February 06, 2018 by Jennette Rowan

Changing consumer tastes and preferences for higher-end, premium coffees have slowly been changing the global coffee industry. This makes it more important than ever to keep apprised of updates to the coffee market, such as price fluctuations, crop forecasts, sales and overall trends.

Global coffee supplies will move to a 4 million 60 kilogram bag surplus in the 2018-2019 season, with Brazil expected to harvest a record crop of about 60 million bags, according to traders and analysts. Brazil's harvest is expected to be made up of 44 million bags of arabica and 16 million bags of robusta, reported Reuters (Feb 5).

Despite the rising availability, prices are expected to continue increasing as companies restock their inventories. Arabica futures were forecast to rise by 6.5 percent by the end of 2018 compared with 2017, while robusta was expected to climb by 4.8 percent. Global coffee supplies were at a deficit of approximately 3.2 million bags in the 2017-2018 crop year.

“The ongoing de-stocking of green coffee stocks in Japan, Europe and the United States against depleted producer coffee stocks, against the inability to rebuild those stocks in 2018 to any major degree, place coffee in a very precarious situation should Mother Nature inflict any damaging conditions anywhere in the coffee-producing world,” notes Shawn Hackett, president of Hackett Financial Advisors.

Meanwhile, retail sales of coffee are likely to drop to 764,000 metric tons in 2018 from 766,000 in 2017, and could remain flat through 2022, according to Euromonitor International. The decline is being driven by an improving economy, which tends to lead to a reduction in home brewing and an increase in cafe purchases, reported Bloomberg (Feb. 5).

Single-serve sales are also expected to slow, as growth is the segment continues to rapidly decelerate. Expansion is expected at 5.8% in 2018, a drastic drop from the 32% in 2014. However, that could change with Dr Pepper Snapple's acquisition of Keurig Green Mountain, which could bring innovation and a shakeup to the category.

The total market is expected to increase about 1.1% over five years, aided by increased foodservice demand. Some of the bright spots in the coffee market are expected to be ready-to-drink products, cold brew beverages, and smaller, artisan chains like Intelligentsia Coffee and Stumptown Coffee Roasters.

Posted in Coffee   Markets   Retail  

 

About the Author

Jennette Rowan
Product Manager
The Food Institute

Jennette writes and edits the Food Institute’s annual publications, such as Food Business Mergers & Acquisitions, The Food Industry Review and The Almanac of the Canning, Freezing, Preserving Industries.  She also handles marketing and promotions for books, seminars and the monthly webinar series. Additionally, she writes for the daily news update, Today in Food, and periodically contributes to the weekly Food Institute Report. She has a background in non-profit and environmental marketing, programming and writing, and joined the Food Institute in 2013 with a degree in Communication Studies from Rowan University.

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