Market Channels for Coffee – Part Two2 min read

The coffee industry is a typical example of how important cooperation between nations is. Coffee is an essential source of income for countries in South America or Africa, but it has become, over the centuries a constant commodity for people in West. When we drink a cup of coffee, we hardly ever think of the painstaking, complicated and time-consuming process that it implies. Selling coffee on the EU market has its own mechanisms and strategies that are to be taken into consideration and constantly repositioned in order for this process to be a successful business for importers, exporters and consumers.

The coffee retail industry consists of two sectors: in-home consumption, which is also the one that occupies the largest slice of the retail coffee industry, and out-of-home consumption. People buy coffee for in-home consumption mainly from supermarkets, convenience stores and specialty shops that can be found mostly on the internet. Supermarkets, however, take the bulk of the retail industry. Market strategies are to be put in place in order by supermarkets in order to make profit out of the coffee segment.

That is why, very often, coffee can be bought from supermarkets at ridiculous prices. If one stopped and calculated the process it takes for companies to bring coffee on the shelf, one would realize that, by maintaining a certain price, the supermarket would have to sell at a loss. The analysis is true enough, but one has to take into consideration that this is a market strategy that allows supermarkets to have a continuous flow of consumers. It has been generally estimated that in-home consumption accounts for 70 percent of the coffee market, whereas out-home consumption takes the 30 percent left. When we talk about out-home consumption we refer to coffee bars and restaurants.

Coffee can be bought in the retail sector as ground coffee, instant coffee, coffee cups and pads and coffee beans. In Western and Northern countries people tend to incline towards coffee pads and cups. The main reasons are the fact that these products are easy to use and have a large variety of flavors. Also, there is a distinction to be made between consumers in EU and those in the United States of America, as Americans tend to favor the specialty market. In the following part of this multi-part installment we shall refer more to the different quality coffees on the market.

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