Technical Paper
Characteristics of the Demand for
Robusta Coffee in Europe
INTERNATIONAL
COFFEE ORGANIZATION
COMMON FUND FOR COMMODITIES
Technical Paper No. 4
Characteristics of the Demand for
Robusta Coffee in Europe
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ACKNOWLEDGEMENTS
The Common Fund for Commodities (CFC), the International Coffee Organisation,
(ICO) and APROMA gratefully acknowledge the assistance received from the coffee sector
in France, Germany, Poland, Switzerland, United Kingdom, Netherlands, Belgium,
Luxembourg, Italy and United Kingdom and in particular those companies or individuals
who completed the questionnaires.
The study benefited from comments and contributions made by the Common Fund
and the International Coffee Organisation. Mr. Dennis Seudieu, Project Co-ordinator from
ICO and Mr. Caleb Dengu, Project Manager from CFC provided valuable comments and
guidance throughout the course of the study.
The findings, interpretations and conclusions of the study are those of the individual
contributors and APROMA and not necessarily of the CFC or ICO.
ii
TABLE OF CONTENTS
EXECUTIVE SUMMARY .................................................................................... 1
METHODOLOGY ............................................................................................... 3
OVERVIEW OF THE EUROPEAN MARKETS STUDIED .................................. 5
1.The French coffee market ................................................................................ 5
1.1. Overview .................................................................................................. 5
1.2. Characteristics of the demand for Robusta.............................................. 6
a. Quality ........................................................................................................ 6
b. Availability................................................................................................... 7
c. Reliability .................................................................................................... 8
d. Exporters .................................................................................................... 8
e. Logistics ...................................................................................................... 8
f. Prices........................................................................................................ 10
2. The Swiss coffee market............................................................................... 10
2.1. Overview ................................................................................................ 10
2.2. Characteristics of the demand for Robusta............................................ 11
3. The United Kingdom coffee market .............................................................. 12
3.1. Overview ................................................................................................ 12
3.2. Characteristics of the demand for Robusta............................................ 13
a. Quality ...................................................................................................... 13
b. Purchases................................................................................................. 13
4. The German coffee market ........................................................................... 14
4.1. Overview ................................................................................................ 14
4.2. Characteristics of the demand for Robusta............................................ 16
a. Quality ...................................................................................................... 16
b. Purchases................................................................................................. 17
c. Logistics .................................................................................................... 17
5. The Polish coffee market .............................................................................. 17
5.1. Overview ................................................................................................ 17
5.2. Characteristics of the demand for Robusta............................................ 19
a. Quality ...................................................................................................... 19
b. Purchases................................................................................................. 21
c. Logistics .................................................................................................... 21
6. The Benelux coffee market ........................................................................... 22
6.1. Overview ................................................................................................ 22
6.2. Characteristics of the demand for Robusta............................................ 23
a. Quality and cup characteristics ................................................................. 23
b. Purchases................................................................................................. 24
c. Logistics .................................................................................................... 24
iii
7. The Italian coffee market .............................................................................. 24
7.1. Overview ................................................................................................ 24
7.2. Characteristics of the demand for Robusta............................................ 26
7.3. Market structure ..................................................................................... 27
SYNTHESIS ..................................................................................................... 28
1. Robustas in the European markets studied: statistical trends....................... 28
2. Characteristics of demand in European Markets .......................................... 30
2.1. Different uses of Robusta ...................................................................... 30
2.2. Grades ................................................................................................... 31
2.3. Cup characteristics ................................................................................ 32
2.4. Defects .................................................................................................. 33
2.5. Quality control ........................................................................................ 34
2.6. Purchases .............................................................................................. 35
2.7. Financing of transactions ....................................................................... 37
2.8. Logistics................................................................................................. 38
2.9. Risks ...................................................................................................... 38
3. General and country recommendations ........................................................ 39
3.1. Nature of Robustas to be produced and supplied .................................. 39
a. Taste characteristics ................................................................................. 39
b. Size of beans, grades ............................................................................... 40
c. Defects...................................................................................................... 40
d. Processing techniques.............................................................................. 40
3.2. Commercial conditions to be offered ..................................................... 41
a. Quality control ........................................................................................... 41
b. Sales......................................................................................................... 43
c. Packing / transportation ............................................................................ 43
d. Regulation of exporters............................................................................. 44
e. Information / promotion ............................................................................. 46
f. Replanting / intensification of production ................................................... 46
3.3. Sector structuring................................................................................... 46
4. Appendices ................................................................................................... 49
Appendix 1. List of Contacts ......................................................................... 51
Appendix 2. Questionnaire............................................................................ 53
Appendix 3. Present Trends of 5 Factors in 7
Producing Countries of Robusta ............................................... 62
Appendix 4. Table of Defects by Origin ........................................................ 63
Appendix 5. Evaluation of Taste by Origin .................................................... 64
iv
EXECUTIVE SUMMARY
During the period December 1998 to January 1999, APROMA conducted a market survey
of Robusta coffee demand in France, Switzerland, the United Kingdom, Germany, Poland,
Benelux, and Italy. Roasters and traders were surveyed using a postal questionnaire and
followed-up by telephone or face-to-face interviews. The main findings of the survey are
summarised as follows:
1. The French market, which used to be Robusta-oriented, now consumes 60% of
Arabica.
In terms of Robustas, the French market requires a consistent and
comparatively neutral quality, constant availability, and reliable exporters. Its main
sources of supplies emanate from West Africa.
2. The Swiss market is traditionally an Arabica market but is also supplied with
some Robustas (15%) predominantly of Asian and Ugandan origins. The quality
requirements are very high and domestic distribution is dominated by Migros.
3. The British market is essentially a soluble, and consequently a Robusta coffee
market, which has traditionally been supplied by Indonesia. British roasters appreciate
both neutral and hard tastes.
4. The German coffee market is the largest in Europe, and requires the high quality
typically associated with Arabicas, particularly from Colombia but also from East Africa,
the acidity of which is appreciated. Robustas are also imported from Congo and Uganda
and are used as fillers: consequently these Robustas need to have neutral tastes.
5. The Polish market has switched to Robustas (mostly imported from Asia) for
price reasons. Hard and strong tastes are accepted and the quality is often low, as price
is the dominant buying criteria.
6. The Benelux markets are very much Arabica markets (90%). Robustas are
used as fillers and are required to be neutral in taste. Uganda and Côte d’Ivoire are the
main Robusta suppliers.
7. Characterised by its large number of roasters, Italy is a market for Arabicas,
particularly for Washed Arabicas. Robustas account for 40% of the total and mainly come
from Brazil and a variety of African and Asian origins. Due to their strength they are
needed in the preparation of “espresso” coffee.
8. Overall, European consumption of Robusta coffee has increased during the past
seven years, in both volume and percentage terms, rising from 23% of total coffee
consumed in 1992, up to 24% in 1996. This rise has benefited Asia more than Africa and
has affected more northern (Benelux, Germany, Poland, and the United Kingdom) than
southern European markets. France and Italy, for example, have seen a relative increase
in the consumption of Arabicas.
9. Robustas are used mainly in roast and ground coffees so that the physical
aspects of the beans are less important than their taste characteristics, which must be
1
consistent. The more northern European markets require neutral tastes while the
southern markets require strong flavours.
10. Some specific defects must be eliminated to suit European markets, principally
the moisture content, which must be under 13%, black beans, immature, broken or
crushed beans, stinker and whitish beans, and the presence of sticks and stones.
11. Further recommendations include the following:
• Improvements are needed in the description of lots to be sold and liquoring
should be developed at origin;
• Containers with bulk coffees are preferable, when available;
• The size of beans needs to be uniform. Grades 2 and 3 are typically demanded
•
while Grade 1 is mainly required in Italy which has maintained its coffee sales in
bean form; and,
Harvesting should be undertaken at full maturity, and improvements in the
drying and sorting techniques are required.
12. Origins should be permanently “on the market” rather than attempting to sell
opportunistically. More information on both the suppliers and availability of goods is
frequently requested by roasters and traders seeking new origins. The lack of promotion
and information available to the market should be organised by local authorities and other
professional organisations.
2
METHODOLOGY
During the period December 1998 to January 1999, APROMA conducted a market survey
of the most important markets in Western and Eastern Europe in order to clearly identify
the commercial and technical demand for Robusta coffee in the European market and to
enable Robusta producing countries to adjust their production and services.
APROMA’s research was conducted in the countries which represent the most important
markets in Europe and which purchase significant quantities of Robusta, namely, France,
Italy, the United Kingdom, Poland, Benelux, Germany, and Switzerland.
The companies that APROMA contacted for this project included roasters of all sizes,
from multinational companies (Kraft/General Foods, Nestlé, etc.) to small local coffee
roasters, and commodity trading companies, most of which specialised in Robusta.
Contacts with local and national roasters were particularly useful. To some extent,
answers from international roasters like Kraft Jacobs Suchard or Nestlé were uniform
across all the countries studied. Local roasters tend to stand “closer” to their national
markets (see Appendix 1).
In order to obtain a representative sample, roasters and traders were selected according
to their size (large, medium, and small sized firms), market orientation (suppliers of
supermarket chains, restaurants or gourmet coffee stores), and the market segments they
were controlling (roast and ground coffee, soluble, etc.).
Considering the wide range of subjects that APROMA had to review with professionals, it
was not possible to carry out this survey solely by telephone. APROMA decided from the
outset to design a postal questionnaire that was then sent to all the selected professionals
in the countries.
After sending the questionnaires, roasters and traders were contacted by telephone. The
objectives of APROMA’s study were explained to them. Most of the professionals agreed
to complete the questionnaires but some follow-up was also necessary. Face-to-face
interviews were therefore arranged with the professionals in the most important markets
(Poland, Germany, France and Switzerland). Professionals in the remaining countries
were followed-up by telephone as they were geographically disparate: time constraints
meant it was not feasible to travel extensively between these interviewees. Moreover,
APROMA already had some knowledge of these markets (in the UK, Italy, and Benelux),
through previously conducted research surveys.
After receiving the completed questionnaires, interviewers called back roasters and
traders to gain more precise answers to some of the questions and thereby validate the
quality of the research findings.
The conclusions and recommendations in this report have been directly drawn from the
answers received by post, telephone, fax, and e-mail.
3
The questionnaire covered all aspects of the survey (see Appendix 2):
•
•
•
•
•
•
•
•
•
Quantities and qualities bought each year;
Regular origins;
Use of Robusta (by sector);
Organisation of purchases;
Transport conditions;
Packing requirements;
Used contracts;
Quality, quality control, quality evaluation, defects, cup characteristics; and,
Information requirements.
Roasters and traders not only had to give the precise quantities and quality they buy, but
also the characteristics of the quality they would like to buy and sources of origin. It was
particularly important to ask professionals to characterise each Robusta origin and
compare them.
Each surveyed market has it own characteristics and presents different structures,
segments and niches. We focused on the characteristics of each market and the
characteristics of demand for Robusta in turn.
Concerning the tables, we used statistics published by the German firm F.O. Licht, one of
the most reliable sources of data in the world coffee sector. All other statistics came from
national customs’ files. F.O. Licht’s statistics (together with ICO statistics) are commonly
used by all firms, international organisations and associations involved in coffee trade or
development.
4
OVERVIEW OF THE EUROPEAN MARKETS STUDIED
1. The French coffee market
1.1.Overview
France is one of the largest importers in the European Union.
315,510 tonnes of green coffee.
In 1996 it imported
Table 1
France - Imports of green coffee - Top Robusta origins (‘000 bags of 60 kg)
Country
1990
1991
1992
1993
1994
1995
1996
Côte d’Ivoire
599.2
845.7
876.3
1018.4
790.0
749.5
780.8
Uganda
333.9
388.3
334.6
294.3
490.0
407.0
553.3
Cameroon
361.3
219.8
334.0
193.2
217.4
175.3
262.8
Vietnam
123.2
82.9
85.4
78.9
194.2
177.1
240.2
Zaire/RDC
146.0
112.9
58.6
140.1
113.1
159.1
132.0
Indonesia
148.9
99.0
97.9
88.9
52.0
28.9
117.5
India
27.9
20.4
21.5
28.3
63.9
21.2
68.8
Togo
35.3
64.0
87.2
79.2
52.8
72.9
33.8
RCA
90.6
67.4
22.6
28.9
36.9
81.0
32.9
Guinea
10.7
3.5
16.0
8.1
25.5
46.9
10.7
123.2
82.9
85.4
4.3
2.5
4.5
7.0
Thailand
Source: F.O. Licht’s International Coffee Yearbook / various years
The market is dominated by the American groups Philip Morris (Jacob Suchard) and Sara
Lee (Douwe Egberts), which account for almost half of all retail sales. The remaining 50%
is divided between several French roasters including Legal (about 4.5%) and two Italian
groups, Segafredo Zanetti and Luigi Lavazza (3%), with the latter constantly gaining
market share at the expense of its competitors. Supermarket store brands (for example,
Continent) account for close to 18% of sales.
The French market has seen some of the most substantial changes among Western
European countries despite the fact that consumption levels have been steady, a factor
related to population growth (which is relatively low). While France traditionally was an
importer of Robusta, it is now importing more and more Arabica as consumer tastes move
in this direction.
The roast and ground coffee sector is using increasing proportions of Arabicas. While
France continues to import about 50% Arabica and 50% Robusta, the proportion is 75%
5
Arabica to 25% Robusta for sales of roast and ground blends, indicating growing
consumer preferences for predominantly Arabica blends. Consumer preferences for
soluble coffees are also moving predominantly towards blends. These factors indicate the
slow but steady decrease in Robusta consumption in the French market.
In terms of value, the pure blends account for more than 50% of sales. In 1996, France’s
main coffee suppliers were Côte d’Ivoire (35,952 tonnes), Brazil (44,706 tonnes) and
Colombia (33,462 tonnes).
Coffee is still predominantly a breakfast drink for the French although out-of-home
consumption is growing (hospitality sectors, offices). For this reason, most sales of coffee
are in the form of ground roasted in vacuum packs. The soluble coffee segment,
dominated by Nestlé and Maxwell, scarcely represents 5% of the market.
More than 90% of the coffee is sold in supermarkets. Small roasting shops have never
had more than a 5% market share. This is partly due to the fact that the selection
available in supermarkets is very large, ranging from pure Robusta blends to pure Arabica
blends. The consumer has the choice of many varieties, blends and qualities. Some
national medium sized roasters also sell products through supermarkets, which are
relatively close to those sold in speciality roasting shops: Malongo, Meho, Legal, etc.
An interesting recent development is the expansion of “espresso” coffee, which explains
the growth of Luigi Lavazza’s sales in France. Almost all of the coffee consumed in cafés,
hotels and restaurants is in the form of espresso. Home consumption of espresso also
seems to be increasing, judging from the quantities of espresso blends sold in vacuum
packs.
While the quantity of the coffee which people consume at home is generally rising, the
opposite is true for the coffee they drink outside the home.
1.2. Characteristics of the demand for Robusta
Consumption of Robusta, which until the 1980s represented more than 60% of total coffee
imports, turned in favour of Arabica for the first time in 1992 (52% Robusta compared to
48% Arabica) and its share has been steadily decreasing ever since, declining to 40% in
1998. The analysis of the answers given in our questionnaires provide the main reasons
for this tendency. Most buyers choose their Robustas according to four factors, which can
be classified as follows:
•
•
•
•
•
•
Quality;
Availability of shipments/delivery periods;
Reliability of shipments/delivery periods;
Exporters;
Logistics (transportation, packing, equipment in ports, freights, types of
contract; and,
Price (related to the terminal market).
Quality
a)
Some origins are more subject to suspicion, or are eliminated because of quality
problems and are, therefore, often bought on a sample basis rather than on
6
description. Defects in the cherries, black beans, etc, are numerous and some
roasters disregard certain origins due to their “phenolic” taste and excessive
moisture content (up to 18%).
Almost 90% of non-soluble coffee is ground, and producers and exporters of origins
wrongly believe the lack of defects to be less important. It should be remembered
that many of these defects have an influence on the taste, on the “cup”.
Not only roasters, but also dealers and importers now have very sophisticated cuptesting laboratories. The quality manager takes the final decision to accept, reject,
or ask for replacements of the coffees bought on shipments.
Quality control at origin is generally felt to be necessary, provided, of course, that it
is performed seriously. Uganda is a good example, as a result of the Uganda
Coffee Development Authority’s (UCDA) cup tasting. It would, of course, be an
ideal means of eliminating bad lots. Private companies (such as SGS or Veritas)
are preferred for quality control at origin.
The defects which cause the greatest concern are mouldy, fermented and stinker
beans, which impart bad tastes to the cup. Other defects are less important, since
grinding coffee eliminates any detrimental consequences of the beans’ “physical
defects” (scolytes, broken, scratched beans, etc.). In order to eliminate the main
defects, cherries should be picked at full maturity and sufficiently dried in sunlight.
Generally, professionals believe that the washing process applied to Robusta would
only worsen any basic taste defects (by increasing the moisture content). Humidity,
apart from causing losses in weight for the buyers, also leads to the development of
some other important defects: mouldiness, fermentation, rottenness and also OTA
(ochratoxine).
All efforts should be made to obtain a consistent, neutral cup from each origin. An
improvement in quality should at least prevent any further decrease in consumption
of Robusta.
The size of beans has become less important, as 90% of coffee is sold in ground
form. Grades 2 and 3 are increasingly being preferred with the exception of some
roasters (the Hotel café restaurant sector - HORECA) who still sell roasted beans.
However, grading in regular size is also important since the output of grinding
machines depends on the homogeneity of the beans. A final quality consideration
is that French buyers consider that liberalisation may have an influence on quality if
controls are no longer consistent and reliable. In some West African countries,
since liberalisation, the percentage of black beans has rocketed. On the other
hand, in Uganda, quality controls have been duly maintained. Many buyers stress
that producers’ lack of basic knowledge about picking, drying and hulling, leads to
low quality. This problem has been largely examined in Uganda where the level of
professionalism is at a comparatively high level, from the field to the factory.
Availability
b)
Considering the importance of the costs of financing, the tendency is to reduce the
costs of financing to a minimum. Therefore, roasters will increasingly try to buy
7
“from hand to mouth” in order to carry as little stocks as possible. Dealers will have
no other choice but to buy on shipments or to carry stocks to meet the demands of
roasters. Both will, therefore, prefer origins which are either permanently or
regularly selling to the market.
Many Robusta origins do not worry enough about buyers’ wishes on this subject.
Using terminal hedges, they just speculate and bear maximum risks.
To avoid this situation and obtain the best average price for their coffee, constant
availability would probably be the best way of marketing. Later sections highlight
ways to improve marketing and, therefore, the financial output for producers. In the
meantime, they will satisfy the buyers who know they can rely on regular sales.
Reliability
c)
Lack of reliability can be based on problems due to:
•
•
Exporters; and,
Logistics.
Exporters
d)
No perfect system exists to eliminate dishonest people or speculators. Licenses
can be bought, and the financial structure of companies can change. Of course,
agreements must be maintained and provided to the most reliable exporters. The
greatest risks clearly lie with the buyers, who must be in constant touch with their
sellers to reduce risk exposure by: increased sampling, checking stocks locally
through forwarders, credit limits, price fixing systems, travelling to countries of origin
and personal knowledge of the country. Liberalisation naturally increases the risks
for everybody.
Logistics
e)
This mainly refers to the ability to ship on time, without delay due to infrequent
ships, insufficient equipment in the ports, poor conditions of storage, and problems
of customs clearance, etc. Further details are elaborated below.
Inland transportation at origin
One country, Uganda, has logistical constraints to its shipments of coffee from
Kampala to Mombasa. Problems arise due to the lack of convenient roads or
railways and other administrative complications, including customs clearance.
Similar problems also exist in other producing countries, particularly when
transporting coffee from the farm-gate to the loading ports (Cameroon, Côte
d’Ivoire, and RCA).
Improvements to road and rail networks would constitute important progress
towards avoiding lengthy storage, often in poor conditions inside the country, and
delays of shipments in the port.
8
Equipment of ports
Many delays in shipments are due to poor organisation in the ports of origin. Even
if there are generally sufficient warehouses, the handling equipment is often poor
(for example, Mombassa only has four cranes). A roll-on-roll-off system needs to
be developed.
Bureaucracy
Bureaucracy (customs clearance, formalities to export and load on board,
numerous declarations to several administrations, etc.) should be eliminated as far
as possible.
Freight
Freight rates rarely influence the buyers’ decision making. With the exception of
Uganda, ports are well served by shipping companies and competition between
them tends to bring freight rates down to more normal and acceptable levels.
Moreover, 90% of the purchases from either dealers or from roasters are made on
a CIF basis, which removes all concerns about freight rates.
Packing
Traditional loading (with slings) has been almost completely abandoned. Buyers
only want containers, either with bags (280 to 300 bags of 60 kg by 20 feet
containers) or in bulk. 50% of the loaded coffee from Uganda (or Brazil) is now in
bulk containers. Liners are placed in the containers up to the maximum load of 22
tonnes for each 20 feet container. Loading in bulk containers avoids theft and
enables the coffee to be brought to silos or directly to the factories at its destination.
Buyers believe that this system should be developed to avoid the handling of bags
at origin as well as at destination (among other advantages). It would also
eliminate the cost of the bags to exporters, which is not inconsiderable.
Concerning bags, producers should remember that strict regulations will be
implemented in each destination (in accordance with §5 of ECC) to ensure that
vegetable and not mineral oil is used as batching oil for bags.
“Article 5 - Packaging
The coffee should be packed in sound uniform natural fibre bags suitable
for export and in conformity with the legal requirements for food packaging
materials and waste management in the country of destination.”
Contracts
The most commonly used contract is the European Contract for Coffee (ECC). It
satisfies all buyers and has needed no modifications since the latest edition in 1997.
9
Prices
f)
Concerning prices, it should be recalled that at any time buyers, roasters or dealers
could fix a price with purchasers on the terminal market. So the choice of origin will
rarely depend on the actual physical level of prices at any particular moment, but
rather, on the ultimate price differential between the physical and terminal markets.
However, any price considerations are made only after careful evaluation of the
physical attributes of the coffee, according to the physical factors elaborated earlier:
quality, availability, etc. Similarly, producers and sellers who do not use terminal
markets, futures contracts or hedges, have a tendency to sell at the highest price
possible, and tend to wait for higher prices to materialise. In doing so, they
speculate and run into risks, which should not be taken. As mentioned earlier, the
best way to obtain an average price for the crop is to constantly engage in the
market and thereby avoid accumulating stocks, which weigh heavily on the market.
Furthermore, terminal markets should also be considered to be physical delivery
markets which necessitate additional quality considerations: coffees, which are
accepted on tendering should, of course, earn a price premium compared with nontenderable coffees. This point warrants further attention by the authorities in
producing countries to demand clearer criteria from the organisations responsible for
grading controls in London (grading panels), particularly in cases where coffees are
refused. Many coffees, declared non-tenderable, remain in storage in Europe and
suppress prices lower.
2. The Swiss coffee market
2.1. Overview
Switzerland imported 63,822 tonnes of green coffee in 1996.
Switzerland imports 85% of Arabicas and mostly other Mild Arabicas. The main suppliers
are South American producing countries: Brazil, Colombia, Honduras and Guatemala.
India supplies almost 10% of all imports and the remainder is divided among the other
origins.
Concerning Robustas, the most important suppliers are Asian producing countries and
Uganda. Although imports of Robustas have increased between 1990 and 1996 by 90%,
the African market share has collapsed from 68% in 1990 to 42% in 1996, which
represents a considerable loss in terms of volume. Only Uganda has taken advantage of
the increase in imports of Robustas: imports from Uganda have significantly increased
during this six-year period.
10
Table 2
Switzerland - Imports of green coffee - Top Robusta origins (‘000 bags of 60 kg)
Country
1990
1991
1992
1993
1994
1995
1996
Uganda
10.3
5.7
18.6
17.4
41
44.6
81.7
Indonesia
43.6
55.9
62
76.9
89
74
77.1
India
43.6
55.9
62
76.9
89
74
77.1
Vietnam
0.5
-
-
2
3.2
0.7
3.1
Côte d’Ivoire
6.1
3.9
4.6
3.4
1.6
3.2
11.1
Cameroon
23.9
19.6
15
24.6
14.7
15.3
9.5
Togo
38.1
47.9
31.5
40.9
22.5
27.9
7.6
Madagascar
1.5
0.9
5.8
3.6
4.6
3.6
6.6
Zaire/RDC
4.3
1.3
1.7
0.6
2.9
1.9
1.4
Guinea
0.4
2.2
-
-
-
1.6
-
10.2
5.2
1.5
0.4
0.6
4.9
-
RCA
Source : F.O. Licht’s International Coffee Yearbook / various years
Most sales of coffee are in the form of ground roasted. The remaining 30% are divided
between blends, speciality and soluble coffees.
The ground and roast coffee market is dominated by one local Swiss roaster, Migros
(41%), followed by over 60 roasters, most of which only supply the HORECA sector. Kraft
Jacobs Suchard is the second largest operator, followed by Nestlé, which is more
dominant in the soluble sector with 70%.
The consumer is known to be very demanding. Coffee is typically drunk with milk (50%
milk to 50% coffee). The Swiss coffee market is a mix of different traditions and cultures:
in northern areas, tastes are very similar to German ones, and consumers prefer mild
coffee, whereas French and Italian areas traditionally prefer darker roasted coffee. Most
of the coffee is consumed at home.
2.2. Characteristics of the demand for Robusta
All information we have noted for the French market is, of course, equally valid for the
Swiss market. Robustas represent a small percentage of the consumption in this country.
Nevertheless, the following specific characteristics should be noted:
•
•
With the exception of Migros, there are no large roasters, so all roasted coffee is
imported from France, Italy and Germany;
In terms of quality, requirements are at a very high level; and,
11
•
If soluble and ground coffee covers 90% of the market, there is still some room
for coffee beans, since many department stores allow customers to grind roasted
beans themselves.
3. The United Kingdom coffee market
3.1. Overview
The United Kingdom imported 122,112 tonnes of green coffee in 1996.
Table 3
United Kingdom - Imports of green coffee - Top Robusta origins (‘000 bags of 60 kg)
Rank
1996
Country
1990
1991
1992
1993
1994
1995
1996
241.8
269.4
200.9
407.2
347.2
293.0
362.6
49.8
129.4
209.1
51.4
154.4
1
Indonesia
2
Vietnam
5.9
1.8
-
4.9
3
Uganda
265.6
118.9
190.5
79.6
4
Brazil
174.6
294.6
389.8
235.5
192.8
189
95.8
5
Côte d’Ivoire
159.9
97.2
47.7
22.9
32.0
84.3
32.1
6
Thailand
-
285.5
76.9
101.7
52.1
56.0
21.2
7
India
7.4
2.9
3.3
2.9
10.0
2.1
20.5
8
Zaire/RDC
13.8
8.9
7.8
6.4
6.0
8.1
9.2
9
Cameroon
48.6
26.9
30.8
12.0
3.1
9.6
6.1
10
Madagascar
-
1.7
13.0
33.3
51.2
2.2
1.9
11
Guinea
3.9
0.3
0.8
3.4
14.4
22.8
-
12
Togo
-
-
10.2
5.1
0.1
0.2
-
13
RCA
0.3
0.2
-
-
-
0.1
-
166.0
Source : F.O. Licht’s International Coffee Yearbook / various years
For more than ten years Indonesia has been the UK’s number one supplier of Robustas,
while Vietnam has moved into second place with a remarkable increase to 209,100 bags
in 1996. Conversely, imports from Africa have dramatically decreased. In 1990, the
United Kingdom imported more than 50% of Robustas from African origins, mainly from
Uganda and Côte d’Ivoire. Imports from Cameroon collapsed from 48.6 thousand bags in
1990 to 6.1 thousand bags in 1996. In 1996, African Robustas represented approximately
25% of supplies. Origins such as Togo and RCA have almost disappeared from the UK
coffee market. Uganda was the only origin to maintain its ranking between 1990 and
1996.
12
Considering the above figures, there has been a clear shift from African to Asian origins.
One of the most notable features of the UK coffee market is the prominence of soluble
coffee, which accounts for close to 90% of retail sales. The soluble sector is growing
further due to the appearance of good quality blends, i.e. the Premium and speciality
segments. These segments have grown dramatically during recent years, while the others
have dropped off somewhat, thereby indicating increased consumer interest in higher
quality. This increasing demand for better quality can be seen in the reversal of ratios
between Arabicas and Robustas: up to 60% and 40%, respectively, compared with 40%
and 60% ten years ago.
Three major firms control the coffee market in the UK: Nestlé UK, Kraft Jacobs Suchard,
and Paulig, a Finnish roaster that took control of the Lyons ground coffee business in
1994. The latter specialises in roast and ground coffee and holds more than 20% of the
market. Nestlé UK has the most prominent market shares with Nescafé (41% of the
soluble market) and Nescafé Gold (10%).
3.2. Characteristics of the demand for Robusta
Quality
a)
Soluble coffees account for 90% of the UK coffee market. Robusta is an essential
ingredient for use in soluble coffees and among the cheapest blends. There is no
clear preference for any particular origin. British roasters appreciate both neutral
and hard, strong tastes. The cup has to be clean without pungent or acrid character.
Cameroon origin is bought for its flavour, Indian origin for its neutral and good tastes
and Indonesian origin for its full flavour. The most important criteria are the taste
characteristics, comparative flavours and prices. Indonesia was excluded by some
important roasters due to its excessive moisture content (coffee can absorb
moisture, particularly in humid environments, during transportation and storage).
Concerning quality, as coffee is mainly sold in soluble form, the majority of roasters
are not interested in the highest grades and they buy mostly Grade 2 and Grade 3.
However, they are not interested in sub-grades as these affect taste characteristics
of blends and would cause too many losses during roasting.
British professionals do not rely on the quality controls which exist at many origins.
Instead, they recommend entrusting quality control to private firms even if the quality
of the coffee is finally checked after it arrives in Europe. They also rely on their own
services, including liquoring, both to get a “full picture” of the coffee and to complete
quality controls.
Purchases
b)
Roasters buy coffee in bulk (containers), in jute bags (conditioned in containers), or
in big bags. However, there is a clear trend towards bulk coffee containers and big
bags. All these packaging systems are satisfactory provided that the coffee is
properly dried before export.
13
The most commonly used contract is the European Contract for Coffee, which is
considered to be fair to roasters, traders and exporters alike and is well accepted
globally. The Dutch Contract is still commonly used in Indonesia. Roasters and
traders buy both spot and forward contracts of up to six months.
The most commonly used Incoterms are FOB (for Uganda), CIF (all origins) and FOT
(for all spot purchases at origin).
4. The German coffee market
4.1. Overview
In 1996 Germany’s net imports of green coffee were 764,220 tonnes.
Table 4
Federal Republic of Germany - Imports of green coffee - Top Robusta origins
(‘000 bags of 60 kg)
Country
Indonesia
1990
1991
1992
1993
1994
1995
1996
590.5
649.5
466.9
930.7
758.7
435.2
833.1
Vietnam
21.4
25.5
47.6
111.4
404
693.4
564.6
Uganda
67.8
129.9
109.0
177.9
339.3
357.1
361.8
India
48.8
56.8
98.4
211.1
426.8
93.8
327.1
226.7
247.7
188.6
256.9
140.6
103.2
165.4
42.9
93.6
90.5
238.2
205.5
83.8
74.0
249.9
155.0
51.5
69.9
33.2
75.0
62.0
Madagascar
31.2
27.4
45.5
42.1
24.6
32.1
27.2
Guinea
61.6
32.1
20.6
28.9
8.1
8.3
1.4
Thailand
23.8
20.2
82.3
11.2
3.9
11.8
1.2
RCA
6.4
0.8
7.3
0.2
0.4
7.9
0.8
Togo
10.8
6.8
13.5
23.2
8.6
3.6
-
Cameroon
Côte d’Ivoire
Zaire/RDC
Source: F.O. Licht’s International Coffee Yearbook / various years
The German coffee market is the largest in the European Union, particularly since
reunification in 1989. Germany is a large-scale coffee importer but also a major exporter
of finished products, principally to Eastern Europe where leading German brands, such as
Tchibo, has become well established. They have reached market shares as high as 25%.
During recent years, these firms have developed new strategies to capture markets.
14
Tchibo has built a new factory near Warsaw in Poland to locally produce the roast and
ground coffee typically sold on the Polish market.
Germany’s coffee market is dominated by Philip Morris/Kraft Jacob Suchard (23% of the
market), Tchibo (23%), Eduscho (15%) and Mellita (10%). Collectively, the other roasters
comprise 24% of the market.
Germany is a high quality market. Arabicas represent 85% of total imports, while
Robustas account for only 15%. The Colombias and other Milds account for 72% of
imports. Consumers are very concerned with the quality of the blends they buy. For
these reasons, German traders and roasters only buy coffee from origins which offer
consistently high quality coffees. German consumers appreciate East African Arabicas for
their acidity. Most of the coffee consumed in Germany is mild, and is composed of a
blend of Arabicas from various origins. The range of origins used makes it possible to
vary the composition depending on the qualities and prices available, while maintaining an
overall standard of quality. These blends contain a high percentage of Colombias (not
surprising given the quantities imported), other Mild Arabicas and Brazils, while other
origins are used to give the blends character.
Specifically concerning Robusta, in 1990 African origins represented 50% of supplies,
Zaire/RDC being the first African supplier, ranking at second place, just behind Indonesia.
In 1996, Africa had notably lost almost half of its market share, while imports from West
African producing countries represented only 30% of all Robusta imports. Volumes
imported from Cameroon collapsed by 26% and by more than 75% from Zaire/RDC. In
the latter case, the decrease was not solely due to the civil war, as volumes had been
decreasing since 1992. Indonesia is now the most important supplier of Robusta,
followed by Vietnam and India.
Uganda was the only African origin to increase its exports to Germany: sales have been
increasing consistently over the last ten years.
Sales of roast and ground coffee dominate the German market: only 6% of coffee sales
are in the form of soluble coffees.
The standard level of quality is higher than in the other countries studied in this report, as
the list of origins would suggest: Papua New Guinea, Kenya, Costa Rica, Tanzania,
Burundi, etc. The German consumer also has a reputation for being particularly
demanding.
Although most German blends only contain Arabicas, some professionals consider that
due to the current increasing difference in prices between Arabicas and Robustas, some
roasters have begun to include Robustas in their blends. However, this has only occurred
in the cheaper blends where the presence of Robustas is not noticeable by the consumer.
15
4.2. Characteristics of the demand for Robusta
Quality
a)
In both the roast and ground and the soluble sectors, Robustas are used as fillers
in Arabica-based blends. German blends are usually considered to be pure
Arabica with no Robusta at all (90% of German imports are Arabicas). The
composition of the blends is not indicated on the packaging, as no roaster in
Germany would use Robusta in blends. However, for some years, because of the
increasing difference in prices between Robustas and Arabicas, some roasters
have begun to use Robusta, although the quantities are such that consumers
cannot notice at all. As a consequence, a good Robusta in Germany has to be
neutral and regular in taste. The more neutral the Robusta, the more roasters can
incorporate it in their blends without changing the taste characteristics of their
products.
Concerning the taste, West African Robustas are too hard and too strong: roasters
prefer to buy more neutral Robustas such as those from Asia (Indonesia, Vietnam)
and East Africa (Uganda), although the latter appears to be too expensive when
compared with Asian origins, particularly for instant coffee processors. In the case
of West African coffees, excessive moisture content and an earthy taste tend to
make them unusable in blends.
The problem of excess moisture (which makes the coffee mouldy) is generally
considered to be the most important problem and the first that should be eliminated
in the near future, irrespective of the origin (some problems with moisture content
were reported in Vietnam after a particularly heavy rainy season). The maximum
moisture content accepted on arrival is 12% to 13%.
Concerning grades, there are two different cases:
•
•
Roasters in the ground and roast coffee sector prefer Grades 1, 2 or 3 and
never buy broken, triage or black beans; and,
Soluble processors buy all grades (including broken, triage, and defective
beans), provided that the taste fits their blends.
In conclusion, German professionals are only looking for neutral Robustas, which
are considered to be “good Robustas”. Robustas from Vietnam, Thailand and
Indonesia, being neutral, have become “standard quality Robustas” for many
roasters. However, the suggestion of washing West African Robustas to make
them more neutral and more suitable to the German market was not really
appreciated by professionals. They fear deterioration in the present quality
(because of the presence of stinker beans), even if it is not currently as good as it
should be, as wet processing also requires specific skills. Moreover, it would not
generate a premium as the quantities on the market would probably become too
heavy. The cost of processing would certainly be too high to make the necessary
investments profitable.
German roasters do not rely on public quality control services at origin. They
consider quality control to be a private matter and they recommend entrusting
private firms (such as SGS or Veritas) with quality control, even if the quality is
16
finally checked upon arrival in Europe. Ultimately, they will rely on local private
firms but these would have to prove their international credibility.
Purchases
b)
There are no rules concerning purchases.
Purchasing depends on the
relationships with exporters at origins. German roasters and traders usually try to
buy coffee through forward contracts on shipments up to one year in advance,
when they rely heavily on their counterparts. Buying forward contracts enables
them to choose the quality, the origin, and to organise the freight. Conversely,
purchases on the spot markets have their disadvantages, particularly as all qualities
may not always be available.
In order to save time and money, the coffee must be conditioned in bulk in
containers. Operators emphasise that containers have to be fully ventilated and
clean to avoid fermentation and any bad odours developing during sea
transportation.
The most commonly used contract is the European Contract for Coffee, which
seems to completely satisfy German buyers. They generally buy on a FOB basis
as they have already negotiated freight rates with shipping companies. These rates
are more competitive than those proposed by exporters.
In order to get the best qualities, German roasters prefer to buy coffee during the
peak season, which guarantees fresh, good quality coffee. There are so many
origins now that Robusta is always available on the market.
Logistics
c)
The general organisation of the ports of origin is considered to be responsible for
delays and, occasionally, cancellation of shipments. However, problems in the
ports (thefts, strikes, delays, disorganisation), and those associated with customs
clearance and transit (in Uganda) are not specific to West African ports. Such
events have already been reported in South America (Brazil), Asia and East Africa
(Mombassa).
5. The Polish coffee market
5.1. Overview
In 1995 Poland imported 97,000 tonnes of green coffee.
The Polish Coffee market is particularly unique: due to economic and political reforms it
has experienced many changes over the last ten years.
Under the socialist system, the market was dominated by state-owned firms such as
Agros, which was the most important importer of green coffee. Poland used to import
Arabicas and a few Robustas. Early in the1990s, roasters began to import more
Robustas due to the lack of hard currencies and low standard of living. State-owned firms
17
had to compete with locally emerging private roasters and with Western and German firms
in particular, who started to export their roast and ground coffee to Poland.
Table 5
Poland - Imports of green coffee - Top Robusta origins (‘000 bags of 60 kg)
Country
1994
1995
1996
Indonesia
281.2
210.6
386.1
Côte d’Ivoire
155.4
211.2
223.0
India
119.6
130.6
185.9
Vietnam
207.3
263.1
163.3
Uganda
129.3
146.6
98.6
Cameroon
64.8
84.7
31.1
Madagascar
55.0
24.2
27.8
Thailand
3.8
34
23.9
Zaire/RDC
3.1
1.6
3.6
26.3
4.5
1.6
1.3
2.0
0.8
Togo
Guinea
Source: F.O. Licht’s International Coffee Yearbook / various years
Currently the market is controlled by Tchibo (with almost 20% of the market), Nestlé (in
the soluble sector), and Kraft Jacobs Suchard. Private Polish roasters control a
substantial share of the market (Prima, Elite), some of them specialising in cappuccino
(Galaxia, Mokate, etc.). Besides these well-known brands, there are many Polish roasters
who sell roast and ground coffee locally or regionally.
The most important sector is roast and ground coffee (80% of the market), followed by
cappuccino (14%) and soluble (6%). The most popular way to prepare coffee is still the
Turkish method, although coffee machines are now more common.
Poland imports almost 85% Robustas and 15% Arabicas compared with 90% and 10%,
respectively, ten years ago. Almost one third of the imported Robustas come from
Indonesia, with Côte d’Ivoire ranking in second place. Poland imports coffee from a few
origins: the choice is not very wide as Polish importers are mostly interested in origins
which can offer Robusta at a comparatively low price.
Most Robustas are imported from Asian producing countries. Vietnam has been a regular
supplier for a long time. Prior to 1989, coffee was bought through barters. The quality
was awful and Polish consumers considered the coffee from Vietnam to be poor.
18
However, Polish roasters continue to buy it because of its low price, but do not admit to
doing so.
Two years ago, professionals and local processors thought that with the economic
recovery and increase in incomes, Poland would shift from Robusta to Arabica like other
Western consuming countries: Polish consumers would adopt and consume the same
blends as those consumed in the European Union. So far, this has not proved to be the
case. According to local professionals, Poland will be a Robusta market for the next ten
years at least, regardless of the future economic situation.
5.2. Characteristics of the demand for Robusta
Quality
a)
The Polish roast and ground market is mostly price-oriented. There are two main
segments. Approximately 80% to 90% of the market are low quality, and this
segment is dominated by Polish roasters who sell their products locally or
regionally. Some of them, located near the eastern borders, export roast and
ground coffee to Ukraine and Belorussia. These roasters only buy Robusta coffees
and do not pay attention to the quality. As a result, the quality is very low.
The poor quality of the product is not solely due to the low average standard of
living in Poland. The success of 100% Robusta blends is due to at least three
reasons:
•
•
•
The taste characteristics of Robusta suit consumers. Polish consumers
appreciate hard and strong tastes;
People do not buy better quality coffee when their standard of living improves.
They prefer to buy new cars, new houses and flats, travel abroad and so on.
Consumers are not ready to pay a higher price for better quality blends i.e.
Arabica-based blends. Generally they buy the cheapest blends they can find on
the market. In these conditions, traders and roasters see no reason to import
more expensive coffees or higher qualities; and,
The difference between Arabica and Robusta is not a commercial argument and
on most packages, the type of coffee is not mentioned. The most important
criteria are the name, the trademark, and mention that “the blend is made of the
best coffees in the world”, even if it contains the lowest qualities.
The remaining 10% to 20% of the market are more quality-oriented. This niche is
controlled mainly by Western (German) roasters, who now produce their blends in
Poland and no longer import them as they used to. In this market, the typical
consumer lives in Warsaw or in the most important towns (Cracow, Lodz, Katowice,
Gdansk, Poznan and Wroclaw), has a high standard of living and is very
demanding concerning the quality of products purchased. Recently in Warsaw and
Cracow, speciality coffee shops opened and started promoting high quality blends.
These types of consumers generally prefer to buy more reliable Western brands,
predominantly from Germany.
Some professionals believe that a specific market exists in South Poland, around
Katowice (Silesia) and Cracovia (formerly Galicia), as the inhabitants in the region
have a preference for strong and well-roasted coffee.
19
The characteristics in the instant coffee sector are completely different. Although
this type appears to be well-suited to the Polish method of preparing coffee, to this
date it only represents 6 per cent of the market, people having a preference for
roasted or powdered coffee. Most of the instant coffee is not produced in Poland,
being imported from Brazil, Germany and sometimes Israel. It is imported in bulk
and packed in Poland. A certain quantity is re-exported to other countries of the
former Soviet Union.
Although they only represent 6 per cent of the market, all the well-known
trademarks have their instant coffee trademark. It is an expanding sector: Tchibo,
Agros or, of course, Nestle which has started its own production of Nescafé in
Poland.
Because of the Polish market structure, Robusta has become an essential element
in roasted and powered blends and in instant coffee. Due to the fact that Poland
produces practically no instant coffee, but imports and packs it directly in the
country (see above), coffee roasters have only replied to questions on the Robusta
used in roasted and powdered coffee.
Where quality control is concerned, most Polish coffee roasters and traders are of
the opinion that this control should not be carried out in the countries of origin as
they only trust their own coffee controls and analyses. Coffee is immediately
checked on arrival in Poland (for example, Gdynia) and plants carry out their own
tasting. This is the most important control. It is even more so than the physical
description and professionals are sometimes surprised to obtain, in what appears
to be bad coffee, acceptable flavour characteristics.
Ivorian coffee is used in many blends, as its rather strong and bitter flavour is
preferred by Polish consumers who are used to this type of coffee. In Poland it is
said of Robusta that it is Asharp/bitter with a pronounced Robusta taste@. When
coffee from this source is not available from November to March, Polish coffee
roasters try to replace it with Robusta from Madagascar (and sometimes from
Cameroon). The Robusta from Togo and Uganda, sweeter and more neutral,
could replace Ivorian Robusta and are appreciated in Poland, but they are too
costly to be regularly added to the Polish blends.
Ivorian coffee is ever more often being substituted by Robusta from Viet Nam,
considered good and neutral. Furthermore, the low prices and large quantities
make this source very attractive, even though the quality may vary. The reputation
of Viet Nam is still very bad and some Polish coffee-roasters are reticent to admit
their own use of it. Vietnamese Robusta is a reminder to Polish consumers of the
detestable coffee to be found under the socialist state. As for Indonesia, Polish
coffee roasters complain of a steady deterioration in quality.
Whatever the source, the grades sought after by coffee roasters are 2 and 3, due
to the good roasting results obtained. They are not interested in larger beans
(grade 1 and large beans) because they are too costly. Besides, what is being sold
is roasted or powdered coffee, so it is not worthwhile purchasing more expensive
qualities. However, they tend to refuse small beans and fragments. Since coffees
20
from all sources are roasted together, poor results would be obtained when
roasting small beans with other grades as it would burn or, worse still, would catch
fire as happened once in a coffee-roasting plant.
However, Polish roasters do not always get the quantities of Ivorian Robusta they
would like. Sometimes the market is short of Ivorian Robusta and professionals
feel that they can only get the qualities that were not accepted by Western markets,
in particular France.
Purchases
b)
Most Polish roasters prefer to buy forward contracts in order to plan their supplies
and secure their production. The more they rely on their commercial counterparts,
the further in advance they buy: from three to six months. Most of them refuse to
conclude forward contracts directly with origins and typically buy through Western
traders, who accept bearing the commercial risk.
Roasters also secure their supplies by only buying “delivered factory” (DDP or
Delivered Duty Paid). The trader has to pay for all charges including export / import
taxes, sea, rail or truck transportation, sanitary fees and insurance from origin to the
destination (the roaster in Poland).
They use the European Contract for Coffee. Roasters who belong to multinationals
are obliged to do so by their head office.
Logistics
c)
Concerning transport, the most important constraints relate to transit conditions. In
order to avoid paying customs duties in Poland, importers have to fulfil several
conditions as follows:
• To buy directly from the origin without processing or transformation in a third
country;
• To transport the product directly from the exporter to the factory or final
destination in Poland; and,
• To import the product from a Least Developed Country, as classified by the
United Nations.
Problems occur when coffee originates from a landlocked country and has to travel
through neighbouring countries and across their borders. If roasters, for example,
import coffee from Uganda, they would have to provide Polish customs with a “non
manipulation certificate” or transit certificate from Kenya. If the coffee arrives in
Hamburg and is transported to Poland by truck or rail through Germany, importers
are required to provide a second certificate. The problem is that they rarely, and
sometimes never, receive certificates from the transit country in Africa (for example,
from Kenya or Cameroon) or the certificates delivered in Germany are not accepted
by Polish customs (in this case the “non manipulation certificate” is delivered by the
Chamber of Commerce and Industry in Hamburg). If the transit country in Africa
(Kenya or Cameroon, for example) agreed to deliver these certificates, the situation
would certainly improve.
21
Polish traders and roasters prefer to buy coffee in 60 kg bags in containers. Some
accept containers of bulk coffee when they have the appropriate facilities. Any
other packaging is not acceptable, as most roasters are not properly equipped to
handle big bags. They store coffee directly in silos or warehouses. In the latter
case, the coffee is stored in 60 kg bags stacked on pallets.
Some comments were made regarding the storage of coffee during sea
transportation. When arriving in Poland, coffee has an excessive moisture content
(greater than 13%). For Polish roasters and traders, although the coffee may have
been sufficiently dried by growers and processors, it is transported in semiventilated rather than fully ventilated containers. As a result, the container’s
moisture content is not uniform and the coffee can sometimes be partially
fermented. The exclusive use of fully ventilated containers would preserve the
quality of the coffee from the origin to the destination port.
6. The Benelux coffee market
6.1. Overview
In 1996 Benelux imported 268,600 tonnes of green coffee.
Table 6
Benelux - Imports of green coffee - Top Robusta origins (‘000 bags of 60 kg)
1990
Uganda
1991
1992
1993
1994
1995
1996
558.7
505.1
476.8
141.5
104.2
257.6
382.1
India
10.4
4.6
7.1
6.2
40.2
36.9
178.9
Côte d’Ivoire
73.8
180.3
253.7
235.2
155.4
102.8
154.3
Indonesia
119.3
130.6
93.2
90.9
78.4
41.3
97.8
Zaire/RDC
59.9
43.9
39.5
44.3
36.3
61.4
48.6
Cameroon
154.2
136.9
135.3
114.9
80.8
60.9
48.3
Madagascar
56.3
47.9
66.3
89.6
60.9
58.2
38.9
Togo
44.3
47.9
42.4
70.0
50.5
45.4
19.9
Guinea
10.4
12.5
4.2
13.1
13.2
24.8
5.3
Thailand
3.9
4.8
1.0
1.9
7.6
11.1
1.6
RCA
3.4
5.8
1.3
5.5
3.9
13.0
1.5
36.7
44.4
4.4
59.8
66.5
96.9
0.0
Vietnam
Source: F.O. Licht’s International Coffee Yearbook / various years
Arabicas represent 90% of the total imports, with Robustas accounting for only 10%.
Colombias and other Milds account for over 70% of imports.
22
Among Robusta suppliers, Uganda has been the most important origin for a long time. In
1996, Benelux imported 40% of their Robustas from this origin. Over the longer term
trend, all other African origins have experienced declining shares, with the exception of
Côte d’Ivoire, and these shares have been replaced by Robustas from India and Vietnam
(see figures from 1990 to 1995).
The market is dominated by large companies such as Douwe Egberts (in the roast and
ground sector) and Nestlé (in the soluble sector). It is worth noting that in Belgium local
roasters such as Rombouts, control 10% of the roast and ground sector, while local
companies in the Netherlands control over 30% of the market.
The roast sector accounts for 90% of the market. 80% of coffee and blends are sold
through department stores and supermarkets.
Consumers’ tastes are very close to those of German consumers, positioned between the
mild and soft German coffees and the stronger blends preferred in France.
6.2. Characteristics of the demand for Robusta
The following section suggests that some of the conclusions drawn from the German
market can also be applied to the Benelux market.
Quality and cup characteristics
a)
Concerning quality and cup characteristics, the ideal Robusta has to be neutral to
be used as a filler in Arabica-based blends. However, Benelux consumers
appreciate stronger tastes than German consumers. Robusta from Cameroon
appears to suit consumer tastes particularly well, since it is both comparatively
neutral but with a strong Robusta taste.
Robustas are appreciated for their cup characteristics. For all origins, the taste
must be clean and not mouldy.
Physical defects may have some importance, as a certain percentage of the coffee
sold in supermarkets and department stores is sold in the form of beans, and is
ground by customers in-store. However, the physical aspects of the coffee are not
as important as in Italy, provided any defects do not alter the liquor.
Importers and roasters in Benelux currently use Grades 1 to 3. Other beans
(broken, triage and black beans) are not acceptable and should be eliminated as a
main priority. This particularly concerns West African origins, where exporters and
processors should be more careful to remove all stones, sticks, cherries and stinker
beans (Uganda).
Concerning quality controls at origin, importers do not rely on the existing services
but prefer to entrust private firms (such as SGS or Veritas) with the responsibility for
quality controls. They would appreciate further controls of the cup (liquoring), but
fear that it would delay shipments and extend transit times.
23
Purchases
b)
Traders and roasters are interested in all Robusta origins, but particularly
appreciate large volumes and regular supplies. They mentioned Vietnam for the
large quantities produced and their reasonable quality, Indonesia (for its consistent
supplies and diversity), and Côte d’Ivoire.
They buy forward contracts (on shipments) up to three months in advance and
accept a maximum shipping period of two months, but only with the exporters they
can rely on. The choice between buying forward contracts or on spot markets is
not primarily a matter of the origin but more a question of the counterpart’s reliability
(for example, through the existence of an Exporters’ Association). Concerning the
reliability of origins, importers are particularly concerned about the liberalisation
programme underway in Côte d’Ivoire, principally the lack of available information
regarding the new organisation of the sector.
Importers use different types of contract according to the origin: for Côte d’Ivoire,
they use the AFNIC Contract (Association Française du Négoce International du
Café), for Indonesia, the Dutch Contract, and for other origins, the European
Contract for Coffee (which is globally well accepted). As the first two contracts are
restricted to the origins mentioned, it would be more convenient to combine the
three contracts into one.
Typically, they buy coffee on a CIF and FOB basis, even from landlocked countries
such as RCA or Uganda. They refuse to buy on a FOT basis as they have no
control over the transit period and theft and damage during transit have variously
been reported. Furthermore, customs regulations in transit countries are not very
transparent. Across all the origins, infrastructure (roads and bridges) should be
repaired, improved and regularly maintained. Conversely, the Incoterm FOT seems
to be most often used in South America.
Logistics
c)
The general organisation of ports at origin is considered to be responsible for
delays and occasionally for cancellation of shipments. Some additional details
were provided: stevedoring appears to be responsible for much of the delay in
transit and shipments, forwarding agents and banks are late in providing export
documents, and customs authorities defer controls and the issue of documents.
7. The Italian coffee market
7.1. Overview
In 1996, Italy imported 320,544 tonnes of green coffee.
24
Table 7
Italy - Imports of green coffee - Top Robusta origins (‘000 bags of 60 kg)
1990
1991
1992
1993
1994
1995
1996
Zaire/RDC
946.1
581.7
569.8
678.4
616.4
718.0
482.0
Côte d’Ivoire
623.9
795.6
601.9
889.9
586.2
425.5
464.9
India
140.6
113.1
159.4
227.3
399.9
387.4
447.4
Cameroon
347.6
288.9
435.6
247.7
321.5
409.8
433.3
Uganda
110.2
90.4
74.6
55.8
231.4
249.6
331.2
Indonesia
208.0
184.5
173.9
217.5
198.3
162.5
213.5
6.1
52.5
18.7
56.8
127.9
100.1
193.6
Madagascar
22.4
17.6
47.5
62.2
65.0
88.1
115.2
RCA
53.4
27.5
5.9
20.0
34.7
80.1
47.1
Togo
40.2
30.5
31.7
31.2
25.4
21.7
12.8
-
-
0.2
4.0
16.0
34.2
5.3
1.6
20.6
28.2
40.7
22.1
7.6
0.6
Vietnam
Guinea
Thailand
Source: F.O. Licht’s International Coffee Yearbook / various years
The Italian coffee market is characterised by a large number of roasters: there are some
600 small roasting firms, 150 medium sized firms and nine companies of national stature,
the most famous of which are Luigi Lavazza and Segafredo Zannetti. Given the strong
market fragmentation, with most roasting companies having a regional focus, market
shares for the various companies are difficult to determine. Lavazza is clearly dominant,
with 45% of retail sales. As for Segafredo Zanetti, its market share is estimated at 5%
(even though it dominates the hospitality sector). Such market fragmentation, together
with strong local preferences, present significant barriers to large foreign groups, whose
market share appears to be no more than 11%.
Green coffee imports mostly comprise Arabicas, particularly Washed Arabicas, although
their share has fallen off slightly. In 1996, Arabicas accounted for 60% of imports,
Robustas 40%. Brazil was the main supplier in 1993 with 76,644 tonnes, followed by
Zaire/RDC, Côte d’Ivoire, India and Colombia with 28,920 tonnes, 27,894 tonnes, 26,844
tonnes and 20,424 tonnes, respectively.
Although sales of coffee in supermarkets have been growing, they have not reached the
proportions observed in neighbouring countries. Only 54% of coffee was sold through
supermarkets in 1993. Nevertheless, the trend towards supermarket sales partly explains
why many small roasters, who sold in bulk, have been replaced by sellers of pre-packaged
coffee (40% of coffee is still sold in the form of beans).
25
Whole bean sales are mostly to the out-of-home sector, principally bars. Many small
Italian roasters supply this sector and refer to themselves as “high quality/gourmet”
roasters. They control close to 40% of the market in question, the highest proportion
among the countries considered in our study. This is partly due to the fact that the
standard quality on the Italian market is average, thereby creating an opportunity for some
Italian roasters to adopt “quality” strategies and position themselves as gourmet roasters.
Coffee is mostly consumed in the form of espresso, whether at home or out-of-home.
Some roasters have had considerable success in marketing espresso coffee to individual
consumers. Some companies, such as Lavazza, owe their success to foreign sales of
coffee for espresso preparation (particularly to France). This form of coffee is becoming
more and more popular in the hospitality sector throughout Western Europe. A
remarkable characteristic of the Italian market is that soluble coffee accounts for only 1%
of retail sales.
It is difficult to describe the “typical” Italian consumer. Roasters admit that they must
adapt the composition of their blends and adjust the degree of roasting to suit local
preferences. There is, however, a fairly clear distinction between the North and South of
Italy: the degree of roasting increases towards the South. This prevents roasters, even
those active throughout the country, from selling one product everywhere. This factor has
favoured roasters who are able to adjust to local tastes and preferences.
7.2. Characteristics of the demand for Robusta
The findings documented for France can also be applied to Italy, although the Italian
market does have its own specific characteristics.
Italy remains a large consumer of Robustas. The main reason for this is that Italian tastes
demand a strong cup. Traditional espresso cannot be made without Robusta. It is also
noteworthy that the foam associated with the cup can only be obtained with Robusta
(particularly from Zaire/RDC).
If ground coffee significantly increases its market share, graded coffees would become
more important since the numerous small and medium roasters would increasingly
demand larger beans (Grade 1, Screen 18).
Concerning the origins, the evolution is similar to that observed in other European
countries, with imports from Vietnam growing due to their increasing availability and lower
prices.
Until recently, Uganda and Côte d’Ivoire were very much in favour. However, as a result
of the liberalisation in Côte d’Ivoire, Italian buyers fear problems with the present crop and
are extremely cautious about buying forward contracts at high differentials.
This destination represents the largest diversification of origins, much more so than
France and Germany, which tend to exclude certain origins (for example, Zaire/RDC).
Competition with Conilon from Brazil must also be considered.
26
7.3. Market structure
Purchases, which were made during recent years for internal consumption, are now also
intended for other destinations.
The incursion and increase in the volume of the biggest roasters (Lavazza), which cover
more than 40% of the internal market have altered the market situation. The small and
medium roasters tend to concentrate on higher quality.
The larger roasters (Lavazza) and some medium roasters (such as Illy Caffe) target their
exports at the European market.
Two main ports (Trieste and Genoa) have developed activities and equipment to provide
facilities to dealers selling to Eastern European countries and Maghreb. These two ports
also receive low qualities (Grades 3 and 4, triage and broken beans, etc.) bound for these
markets.
These tendencies have lead Italy to be considered as not only a consumer of Robustas,
but also as a “strategic centre” for European and other external markets.
There are very few Italian trading houses: generally roasters buy through brokers, which
are much more numerous than in other countries.
27
SYNTHESIS
Our general overview of these markets allows us to draw several conclusions, which are
important in understanding the characteristics of Robusta demand in France, the United
Kingdom, Germany, Italy, Switzerland, Poland and Benelux.
1. Robustas in the European markets studied: statistical trends
All the information and professional opinion gathered in the countries surveyed should be
compared with the evolution of import statistics and should be reflected in recent trends.
It is important to remember that Robusta is a competitive product. Since it is produced in
several countries and is potentially available all year long, importers and roasters can
continuously compare origins, availability, price, qualities, consistency and so on.
By dividing the import figures of Robusta into two groups, imports from Asia and imports
from Africa, it is worth noting that most of the African countries producing Robustas have
lost their market share in the European markets studied. In 1990, imports from Africa
represented more than two thirds of total Robusta imports. In 1996, they fell to 58%.
Conversely, Asia has increased its market shares from 23% to 42%, representing a
substantial increase of 82% over the same period. The Asian countries whose exports
have significantly increased include India, Indonesia and Vietnam. Roasters and traders
have suggested that at least part of the decline in the quality of coffees from Asian origins
could be a result of growers and processors having less time to assimilate the necessary
skills during a period of such rapid growth in their export volumes. However, professionals
also agree that in many countries, including Vietnam, quality and reliability are improving.
Considering African countries in particular, the evolution of exports differs from one
country to another.
While imports from Cameroon, Guinea, Togo, Madagascar,
Zaire/RDC and RCA have decreased, and imports from Côte d’Ivoire have stagnated,
those from Uganda have increased. These trends were also reflected in the responses of
the professionals interviewed. These trends should also be compared with the more
general evolution of Robusta imports. Statistics suggest that Robusta imports have been
increasing over the last ten years.
Table 8
Studied markets: Evolution of Robusta imports (‘000 bags of 60 kg)
1990
1991
1992
1993
1994
1995
1996
Asia
1977.6
2263.6
1876.4
2839.1
3488.8
2839.7
4072.7
Indonesia
1352.1
1388.8
1094.8
1812.1
1523.6
1034.9
1701.6
Vietnam
194.3
207.1
156.1
313.75
845.6
1097.5
1218.6
Thailand
152.5
414
273.8
160.7
89.8
91.9
32.7
India
278.6
253.6
351.7
552.6
1029.8
615.4
1119.8
Asia
23.75%
27.92%
29.85%
36.79%
41.32%
37.14%
42.79%
28
1990
1991
1992
1993
1994
Africa
6347.6
5841.2
4409.0
4877.9
4953.6
4806
5674
Cameroon*
1162.1
939.8
379.8
849.2
778.1
774.1
924.9
Côte d’Ivoire
1505.8
2016.2
1874.6
2408.0
1770.7
1449.1
1517.2
87
50.6
41.8
57.5
77.2
138.6
22.7
168.7
190.3
203
249.6
156.2
171.7
74.1
1346.5
1238.2
1204.0
766.5
1371.9
1367.3
1864.5
493.0
396.1
511.5
230.7
531.5
412.7
453.1
1419.9
903.7
155.5
261.3
191.5
305.5
735.2
164.3
106.1
38.6
55
76.5
187
82.3
76.25%
72.07%
70.15%
63.21%
58.68%
62.86%
58.21%
Guinea
Togo*
Uganda
Madagascar
Zaire/RDC
RCA*
Africa
1995
1996
*OAMCAF members
Source: F.O. Licht’s International Coffee Yearbook / various years
It has been widely claimed (and verified by traders) that recent price developments have
had a direct impact on Robusta consumption. Roasters have sought to use comparatively
higher quantities of Robusta in their blends in order to limit the increases in their
production costs. Roasters can include a fairly high proportion of Robusta in their blends
(depending on its inherent characteristics) with no perceptible changes in the taste
detected by consumers. However, due to a lack of statistics, it is more difficult to measure
the full extent of this phenomenon.
As a result, over the past three years, Robusta’s share of consumption has risen slightly:
from about 23% in 1992 to more than 24%.
However, this general increase does not adequately reflect the changes which have
occurred on a country-by-country basis, as follows:
•
•
Robusta’s share of imports has increased or stabilised since 1989 in the
United Kingdom, Benelux, Germany and Switzerland; and,
Robusta’s share of imports has decreased since 1989 in France and Italy.
Concerning the African Robusta producing countries, the market shares of OAMCAF
members are falling in most consumer countries. Two types of situations can be
observed:
•
In importing countries where Robusta imports have decreased, OAMCAF’s
share of the remaining imports has increased, albeit represented by an
overall decrease in volume (Belgium, the Netherlands, and France); and,
29
•
In importing countries which have maintained or increased their Robusta
imports, and which can therefore be called “promising markets”, OAMCAF’s
share has decreased (the United Kingdom, Italy and Germany).
The poor performance of OAMCAF member countries is clear. In markets where Robusta
imports are falling, their sales have decreased, as have those of other origins. In growth
markets, on the other hand, importers have moved to Asian origins.
All these trends are due to several factors: the evolution of consumer tastes, changing
importer requirements, etc. There is no doubt that a more thorough and comprehensive
understanding of the characteristics of demand and some of the principal problems
encountered by professionals in their business with African origins would contribute
towards reversing the observed trends.
2. Characteristics of demand in European Markets
2.1. Different uses of Robusta
(1)
The markets studied are mainly roast and ground markets, with the
exception of Italy, where a large percentage of coffee is sold as whole beans, and the UK,
where soluble sales account for 90% of the market. This explains why the taste
characteristics of Robustas are more important than the beans’ physical appearance.
(2)
The European market is dominated by several large roasting firms belonging
to multinationals, namely, Kraft Jacobs Suchard, Sara Lee, and Nestlé. National markets,
in the strict sense, no longer exist. This concentration in supply has resulted in a degree
of product uniformity, although products may be adapted to local tastes. It is possible to
categorise two general types of blends geographically:
•
•
In northern Europe, and increasingly in France, Arabica-based blends
predominate, usually with a high percentage of Colombian Milds and other
Milds; and,
In southern Europe (Italy, and southern France), the most popular blends
have a high percentage of Robusta and lesser amounts of Colombian Milds
and other Milds.
(3)
Despite the control these large groups exert over a growing market share,
some domestic roasters still control significant market shares in their own countries. In
the case of Poland, the domestic market share represents between 80% to 90% of the
total market, although it is widely acknowledged to be a low quality market.
Conversely, in France the domestic sector is known as a high quality or “gourmet” market
while Germany is referred to as a “speciality” market. These market segments do not
necessarily handle the same products. In France, roasters generally sell coffees which
are of an above average quality. In Germany and Switzerland, where the standard quality
is comparatively higher, this segment predominantly involves flavoured coffees or specific
preparations (cappuccino, espresso, and aromatised coffees). These flavoured coffees
and specific preparations typify the main constituents of a speciality market.
30
(4)
Poland can be considered to be representative of a typical East European
market. As it is essentially price-oriented, Polish roasters buy the cheapest coffees (i.e.
the lowest qualities of Robusta) without considering quality. However, some changes can
be expected in the future, even if Polish consumers prefer Robusta tastes. They could be
expected to become increasingly more demanding with regard to the quality of the coffee
they drink in line with improvements to their standard of living.
(5)
Italy is an exception within Europe. More than 50% of its market is
controlled by small domestic roasters who mainly sell whole beans, particularly to the outof-home sector. This represents approximately 8% of Robusta imports of all the countries
studied. Many of these roasters define themselves as gourmet roasters selling above
average quality. This partly explains the size of this segment, which is close to 40%.
(6)
In the countries studied there is no market for Robusta sold as “origin”: origin
coffees are a specific niche of the “gourmet” and high quality product sector. The size of
the gourmet market depends on the standard quality of coffees sold on the market: the
better the average quality, the smaller the gourmet sector. In all countries, the size of the
market for origin coffees is less than 10% (Germany, France, Italy, and the United
Kingdom).
In this sector only high quality blends and pure origin coffees are sold, that is, the best
grades and qualities of Washed and Fully Washed Arabicas and no Robusta. Even
Washed Robustas do not sufficiently meet consumer tastes to be sold as origin coffees
on this market. Two years ago, a survey on Washed Ugandan Robustas carried out by
APROMA showed that: “Ugandan Robustas and Washed Ugandan Robustas are not
substitutes for Arabicas, although they are considered to be the best Robustas in the
world and generate a premium on the market. Despite their neutrality, they still have a
noticeable Robusta taste. It would be more accurate to say that they can be used to
significantly increase the percentage of Robusta in blends at the expense of certain
natural Arabicas, e.g. Brazil. But they cannot replace them”. Furthermore: “The best
qualities of Washed Robusta are intended for a very limited market (gourmet and high
quality segments) in which competition between origins (Uganda and India) is fierce and
users are very demanding in terms of quality”. (Study on Potential Demand for Ugandan
Washed Coffees - 1995 - APROMA).
2.2. Grades
As we mentioned in our overview of the European markets studied, coffee is mainly sold
in roast and ground form, except in Italy, Spain and Portugal. The appearance of the
roast, and the size of beans are not, therefore, the main factors which influence consumer
choice. The choice is almost entirely derived from a trade-off between taste and value for
money, with the importance of price factors varying from one country to another (strong in
Poland, weak or neutral in Germany). Consequently, roasters using Robusta in their
blends are unwilling to buy the highest grades, for which they would be required to pay a
premium. Large European roasters, therefore, mostly seek Grades 2 or 3 for which they
do not have to pay a premium over the market, provided that there is no difference in
taste between the grades. The most important factor is a uniform bean size in order to
improve the output from grinding machines.
31
Many traders and roasters judged the size of the beans from Cameroon and Madagascar
to be particularly irregular, and as a consequence they bought lower volumes and smaller
quantities from these origins.
2.3. Cup characteristics
European roasters use African Robustas as a component in roast and ground blends and
soluble coffees. Robustas are mainly regarded as fillers: coffees to be added to other
origins to make a particular blend. They are principally looking for Robustas which prove
suitable for Arabica-based blends, so that any changes in the taste will be imperceptible.
This level of quality and neutrality of the cup are very important for roasters in northern
Europe, as they are able to increase the proportion of Robusta's in their blends without
the change in taste being detected by consumers (i.e. the taste remains about the same).
It is particularly important during periods of comparatively higher prices and extremely
advantageous when the Robusta-Arabica price differentials are wide, since roasters tend
to use a higher proportion of Robusta to reduce their production costs. The further North,
the more neutral and clearer the taste of Robusta has to be. All comments concerning
cup characteristics are summarised by country, origin, and destination (see Appendix 5).
Origins and destinations can be classified by cup characteristics from “strong” to “neutral”.
The following scheme illustrates the origins which are suitable for a particular market.
strong
European Markets
Producing Countries
Cote d'Ivoire
Guinea
Cameroon
Madagascar
Italy
Poland
France
Zaïre/RDC
India
mild
Switzerland
Indonesia
United Kingdom
Togo
Benelux
Uganda
neutral
Germany
Vietnam
Source: APROMA
32
Cup characteristics are the result of a variety of factors, which can be separated into two
groups:
•
•
Agro-climatic conditions (coffee variety, soil, climate, farming systems); and,
Methods of processing.
Some origins process their Robustas using the wet method in order to make them milder.
This mainly applies to the hard and strong Robustas in West Africa. Most of the roasters
and traders interviewed were not in favour of such a strategy, as they are not willing to pay
a higher price even for wet processed Robustas. They already have mild or neutral
Robustas available on the markets (and in increasing quantities) at a reasonable price (for
example, from Indonesia or Vietnam). Furthermore, they expressed fears that producing
countries could not successfully manage the washing process immediately, which could
be detrimental to quality standards. Good dry processed coffees are much better and
more valuable on the markets than poor quality washed processed coffees.
Roasters and traders clearly differentiate between taste characteristics and taste defects:
musty odours, mouldy and stinking beans, the latter being caused mainly by
mismanagement during processing. Cup characteristics (strong, neutral, etc,) are not
considered to be defects but rather “origin marks”. The taste characteristics typically
determine the markets into which the different Robustas fit, while the taste defects would
determine whether or not they are rejected.
Robustas from West Africa are harder than those from Uganda, and there is a demand for
these coffees (see above). However, it is important that these taste characteristics are
not compromised by defects.
For these reasons, roasters propose that dry processing be improved before considering
any potentially heavy and expensive investments with a view to changing the methods of
processing. The coffee varieties currently available could be sold at a much higher price if
they were carefully cropped, processed, stored and transported under adequate and
acceptable conditions by more reliable operators (exporters).
However, considering the age of plantations in some producing countries, roasters also
suggested that replanting campaigns could be considered to increase the competitiveness
and profitability of the coffee sector. They did, however, qualify this by suggesting that
such considerations tend to be beyond their expertise.
Considering the important influence of defects on the cup, a list of the most important
defects raised by roasters and traders is provided in Appendix 4 according to the
countries in question.
2.4. Defects
Appendix 4 presents a synthesis of the most common and the most serious defects
broken down country by country. Roasters’ opinions were consistent: many of the
importers have encountered similar problems with the same origins.
Most of the defects could be eliminated to improve both the physical and the cup
characteristics:
33
•
•
•
•
•
•
•
•
•
•
Moisture must be no more than a maximum of 12% to 13%. Above this
percentage coffee can ferment, become mouldy or worms can develop. The
problem of excess moisture is specific to certain countries, particularly
Madagascar, Cameroon, India and Vietnam. The coffee is either not
properly dried or it absorbs moisture during transportation or storage;
Black beans can be eliminated if coffee is picked at full maturity or if
growers do not pick cherries that have dropped to the ground. This mainly
concerns Côte d’Ivoire, Uganda and Cameroon;
Immature beans can be eliminated by picking only ripe cherries. This
problem applies equally to Côte d’Ivoire, Madagascar, Cameroon, Indonesia
and Vietnam;
Broken or crushed beans. These defects are caused by inadequate
regulation of hullers: but hullers can be difficult to regulate particularly where
the size of the beans is highly irregular. This problem is applicable to
Cameroon, Indonesia and Madagascar;
Cherries. Inadequate regulation of hullers can also contribute to the
presence of dried cherries mixed in with the green cherries. This concerns
mainly Cameroon, Indonesia and Vietnam;
Skins. This can result from improper sorting after hulling;
Stinker beans are a consequence of improper drying or unripe coffee. This
concerns all origins with excessive moisture, including Cameroon,
Madagascar, and India;
Presence of sticks and stones. These defects are due to drying coffee on
the ground and are not eliminated by sorting. Occasionally, coffee growers
put stones in the bags to make them heavier, but it is difficult to prove and
evaluate. This concerns the majority of countries including Uganda, Togo,
Madagascar, Cameroon, Guinea and Vietnam;
Whitish beans are due to excessive drying or drying that is carried out too
quickly. RCA and Indonesia are primarily concerned;
Broca damaged beans (scolyte). This is self-explanatory. Central African
and Asian producing countries are mostly affected.
2.5. Quality control
Quality control is considered to be very important at the origin even if the traders and
roasters do not rely on the existing systems. In all cases, the quality should be checked
prior to shipping, rather than after arrival in Europe, which is too late. However, this also
increases the risk of not receiving the required quality.
Some of the importers and traders consider that quality control could be suppressed. But
this must be clearly understood and put into context: the implication is that under present
conditions, the existing systems are poor, unreliable and ineffective and, since they also
cost money, it is argued they may be better off being suppressed by the authorities.
Furthermore, quality controls can delay shipments. However, importers would have no
alternative but to rely on their local counterparts, or exporters, and finally check the quality
in Europe. It is notable that none of the contacts mentioned any existing quality control
systems that are reliable, even in Asia.
34
With regard to purchases based on samples or on description, a preference was noted for
the former. This is due to two reasons:
•
•
Where quality controls at the origin are unreliable, importers and traders
prefer to check the quality before buying. Some importers even refuse to
buy on samples (because of the unreliability of exporters). Conversely,
some importers agree to buy from certain origins on description; and,
Importers and roasters need to be able to determine the cup characteristics
of the lots they buy. Even for Robusta, roasters consider differences in the
cup characteristics to be very important. The liquorer has the final decision.
Quality control could be further improved by having:
•
•
A more precise description of the lots (in addition to the present
classification, the moisture content and the maximum number of defects
should be specified, as is being done in Vietnam); and,
Liquoring analysis in all producing countries to provide cup evaluations.
The cup evaluation would contribute to eliminating lots that would be rejected by importers
because they do not meet their specific requirements and do not match consumers’
tastes. Furthermore, this would increase the value derived from some lots, which might
look bad but may have acceptable cup characteristics.
2.6. Purchases
There is no general rule concerning purchases. Traders and importers both buy forward
contracts and/or make spot purchases on the coffee market. The decision tends not to
depend on any particular origin but more on the exporters’ preferences and the nature of
the market. If prices are decreasing, importers will buy as much as possible by spot or
forward contracts in order to pay no more than their competitors. In all cases, the most
important consideration is reliability.
Importers with long and well established
relationships with some exporters more willing to engage in forward contracts than others.
This is not only due to poor organisation in the sector, and also to an evident lack of trade
support services and trading relationships.
It is worth adding that the problem of reliability is not limited to particular African countries.
Many roasters consider Vietnam and Indonesian origins to be as risky as African ones,
particularly when prices are increasing on the international market (local exporters prefer
to sell their coffee on the spot market to get the best value for their product).
This problem is linked to a general lack of information from producing countries. Although
roasters and traders tend to rely on their partners in the trade or at origin for some
information, most of the professionals interviewed complained about a general lack of
information on both the coffee campaign and the coffee sector. For example, with regard
to Côte d’Ivoire, professionals are very concerned about the liberalisation process: they
fear a combination of disorganisation, mismanagement and lack of available market
information.
However, some origins in East Africa seem to be more “enterprising” and exporters from
these countries do not hesitate to visit their importers and customers personally, in
35
Europe. European professionals appreciated such initiatives, and specifically mentioned
exporters from Uganda. Conversely, English speaking importers have complained about
exporters from West Africa who they have never met or who are unable to speak English.
Some exporters were also contacted by potential new customers, but they showed no
apparent interest (Polish roasters referred to exporters from Cameroon and Côte d’Ivoire).
The contracts currently used (European Contract for Coffee, AFNIC Contract and Dutch
Contract) are considered to be satisfactory even though there is scope for them to be
harmonised into a single contract. Some importers adapt contracts to their specific needs
(mainly Incoterms) but they are generally well accepted and considered to be convenient.
The ECC was first published in 1956 by the Committee of European Coffee Associations
(CECA) and was last reviewed in 1997. This contract is designed to improve and facilitate
all transactions between exporters and buyers, and is available on request. The Dutch
Contract was published by the Royal Netherlands Coffee Trade Association. The AFNIC
Contract was published by the “Association Française du Négoce International du Café”
(French International Coffee Trade Association).
These contracts cover all aspects of the transaction negotiated between the seller and the
buyer:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Quantities;
Weights;
Types of coffee, grades and quality;
Price and shipment conditions;
Shipment period;
Destination port;
Documents;
Insurance;
Certificates;
Payments;
Cases of “force majeure”;
Arbitration;
Jurisdiction; and,
Generalities.
They were designed to take into account members’ experiences in the coffee trade.
CECA’s members are the coffee associations in the most important European consuming
countries: Germany, Spain, Belgium, France, Greece, Italy, the Netherlands, the United
Kingdom, and Switzerland. Furthermore, existing associations and operators in producing
countries were also consulted.
In this way, all of these contracts can be considered to be fair to both parties, the seller
and the buyer, for two main reasons:
•
•
They are regularly reviewed and updated to include modifications to the
rules, regulations and know-how (for example, see “§5 - packing” in the
ECC) and modernisation; and,
They offer both parties a secured framework for agreement, since all
aspects of operations (sales, transportation, payment, necessary
36
documentation, and arbitration) are already harmonised and elaborated. In
this respect, all conditions are the same irrespective of destination or origin
and buyer or seller.
For these two reasons, they can be considered as a means of reinforcing fair competition
between buyers and sellers, and enhancing the transparency of international coffee trade.
The existence of these contracts, which are typically used by a majority of the operators,
even if they do not belong to the associations concerned (for example, the ECC is also
used by Polish and Nordic operators) suggests that it may be necessary to improve the
organisational structure of exporters in producing countries. Only organised professional
structures would be able to represent their members and take part in the review and
negotiation of these documents and contracts.
2.7. Financing of transactions
It is important to differentiate between financing internal marketing and financing external
marketing:
•
•
Internal marketing concerns all operations from the farm-gate to export;
External marketing concerns all operations between export and delivery to
the final buyers (European traders or roasters).
These different operations are financed by both exporters and importers, depending on
the choice of the Incoterm. Generally, the seller has to finance all operations up to the
“delivery point” determined by the Incoterm, even if operation costs are included in the
final price and charged to the buyer.
Following liberalisation and the increase of risks in producing countries, local (and private)
exporters have received diminishing levels of pre-financing from overseas buyers. Most of
the time, the product is paid for only after delivery or shipment and after the exporter has
fulfilled all the conditions established under the contract.
Payments are made against either documents or letters of credit, which assume that the
exporter has fulfilled all obligations to provide the necessary documents (certificate of
origin, warrants, bill of lading):
•
•
If coffee is sold in warehouses (FOT) or by “shipping weight”, payment must
be effected for the invoice value; or,
If coffee is sold by delivered weight, payment must be effected for the
provisional invoice value and the final settlement should be made on the
basis of the landed weight.
Consequently, it is very important to differentiate between financing and payment, as
exporters increasingly have to finance the operations themselves, before being paid. This
both increases their financing requirements and makes their capacity to attract prefinancing increasingly important. Generally, exporters have to finance the product price
(the price paid to the producers or middlemen) and all the necessary transport and
processing costs. When marketing channels are fully liberalised, there is no choice to
guarantee receipt of the product but to pre-finance middlemen and producers before the
37
campaign begins and increasingly well before harvest. The pre-financing period can
represent more than half a year and, considering the high interest rates in producing
countries, the costs can represent a substantial sum of money.
Because exporters had to turn to local banks for funding, and in doing so encountered
frequent problems as they were not able to provide the required guarantees, there is a
need for more reliable professionals and professional associations.
2.8. Logistics
The use of containers for bulk coffee shipments is increasingly preferred, although the
majority of professionals continue to use bags in containers. It saves time, money and
maintains the quality of the product. Unfortunately, most African ports are not properly
equipped for bulk handling and coffee is handled with outdated equipment. European
professionals have complained about mismanagement in the ports, disorganisation, and
delays due to customs clearance and theft.
No comments were received regarding freight rates. The situation has been improving for
a number of years, due to the liberalisation and privatisation of maritime lines. Only the
larger and more important roasters prefer to pay for their sea transportation (buying on a
FOB basis), as their head office has frequently already negotiated freight rates with
shipping lines. All origins are generally considered to be well served by freight forwarding
and shipping companies.
2.9. Risks
With the increasing political risks and unclear customs regulations, all of the importers
surveyed refuse to assume the risks on coffee inside Africa. This undoubtedly hinders the
development of exports from landlocked producing countries (RCA and Uganda). It is
also important to note the poor state of roads and infrastructure, some of which are
impassable during the rainy season. Although exporters used to sell on a FOT basis
(“FOT origin”), they now have to assume the risk of transport (delays, thefts, loss of
coffee, and huge variations in freight rates), which can represent substantial sums of
money. Furthermore, coffee is often damaged during transportation by truck: this mainly
concerns Cameroon (for Robusta from RCA) and Kenya and Tanzania (for Robusta from
Uganda).
The risks faced by importers are the risks of delays in delivery, non-delivery, and poor
quality. The share of risk and the transfer point of risk from the exporter to the buyer are
fixed by Incoterms. The most commonly used Incoterms are FOB, CIF and occasionally
FOT. The following table gives the transfer points of risk according to the Incoterm: FOB,
CIF, or FOT.
38
Table 9
Transfer of risk according to the Incoterm
Incoterm
FOB
(port of shipment)
CIF
(port of destination)
FOT
Exporter
Importer
Bears all risks of loss
or damage to the
coffee until the time it
has passed the
ship's rail at the
named port of
shipment.
Bears all risks of
loss or damage to
the coffee from the
time it has passed
the ship's rail at the
named port of
shipment.
Bears all risks of loss
or damage to the
coffee until the time it
has passed the
ship's rail at the
named port of
shipment.
Bears all risks or
damage to the
coffee from the
time it has passed
the ship's rail at the
named port of
shipment.
Remarks
The exporter has
to pay for cargo
and storage
insurance for at
least 30 days.
See FOB.
Please note: the term “bears the risks” means that the exporter will have to replace the coffee in
the case of loss or damage in order to fulfil his obligations.
Insurance subscribed by the seller must cover the risks of war, strikes and riots. In the
case of a dispute between exporters and importers over the quality of the coffee delivered,
exporters and traders will typically agree on a discount on the delivered product. They do,
however, have the option of going to arbitration.
3. General and country recommendations
3.1. Nature of Robustas to be produced and supplied
Taste characteristics
a) a. taste characteristics As mentioned earlier, the demand for Robusta in terms of taste
is not uniform, for example, northern European consumers demand milder and
more neutral tasting Robustas than their southern European counterparts.
Each origin supplies its markets according to the taste characteristics of its
Robustas:
•
•
West African, and some Central African, Robustas (Côte d’Ivoire, Cameroon,
Guinea, and Madagascar) are particularly appreciated in Italy, France, Belgium
and the United Kingdom, for their body and their hard, strong taste. They are
too strong and not sufficiently neutral to fit German and northern European
consumers’ tastes;
Other Robustas are more appreciated in northern Europe because of their
neutrality (from Vietnam, Indonesia, Uganda, and Togo).
39
Poland is a particularly unique market: it is more price-oriented and it is therefore
difficult to determine consumers’ tastes and preferences. Most Polish roasters
currently buy the cheapest and lowest quality Robustas on the market (broken and
triage beans, etc.) without paying attention to the taste characteristics.
It is important to differentiate between the roast and ground sector and the sector
where sales are made in bean form.
Size of beans, grades
b)
The size of beans has to be uniform (coffee lots have to be graded): on markets
where coffee is sold in roast and ground form, roasters and traders are interested in
Grades 2 or 3, for which they do not have to pay a price premium. In these
markets, Robustas are bought primarily for their taste characteristics and not for
their appearance.
Grade 1 and larger beans (Screen 18) are appreciated in markets where some
sales are made in bean form; for example, Italy. In this case, roasters are prepared
to pay a price premium and appearance is as important as taste characteristics.
Defects
c)
The most important defect for a trader or roaster is the moisture content. It should
not be above 12%, up to a maximum of 13%. This defect must be eliminated as a
matter of priority for the producing countries concerned. The roasters and traders
surveyed tended not to emphasise other defects, although they did recommend
origins eliminate black beans and sticks and stones (which can seriously damage
roasting machines). All other defects mentioned were a consequence of excessive
moisture content.
Processing techniques
d)
Roasters and traders are not in favour of a complete change to processing
techniques. Robusta is mostly processed by the dry method and this needs to be
improved in order to eliminate some of the above defects.
It is reasonable to assume that since processing influences the taste
characteristics, Robustas (from West Africa) should be processed in the same way
as Arabicas to make them more neutral or milder. However, most roasters and
traders would not recommend wet processing Robustas, for three reasons:
•
•
•
It would be very difficult to make the necessary equipment profitable as
naturally mild and neutral Robustas are already available in sufficient
quantities;
Wet processing requires specific skills; and,
West African Robustas are required by certain markets (as above) for their
specific characteristics.
40
3.2. Commercial conditions to be offered
Quality control
a)
Due to the existing quality controls prior to export being inadequate, most roasters
and traders have to rely on exporters’ professionalism. Some recommend that
private firms with the necessary skills (such as SGS or Veritas) be entrusted with
quality control in Africa and in Europe. Others rely solely on their own quality
control services (in Africa or Europe).
The quality aspect has become important across all markets as consumers and
operators (traders and roasters) have increasingly become more demanding.
Even when the market is short of coffee, quality requirements remain very high
(principally in the markets studied). Whatever the system adopted at the origin,
quality control should have two main characteristics. It should be:
•
•
Separated from state organisations; and,
A key element of the policy on quality, provided that quality control and policy
on quality are not confused.
Quality control should be a key element of policies on quality for the coffee sector.
But quality control does not guarantee that standard quality will improve. It only
certifies that all the lots will be correctly controlled and checked in order to give the
seller and the buyer a sound evaluation of the coffee. The organisation
responsible for quality control should exchange information with the authorities, or
the structure, responsible for planning and implementing policies on quality: quality
controls have to be objective in order to provide reliable information.
For these reasons, quality controls prior to export or prior to shipment should not be
removed as this would deprive origins of one of the most important tools to
implement and evaluate their policies on quality.
Undoubtedly, European buyers and roasters prefer privately owned companies to
control quality for three main reasons:
•
•
•
These companies appear to be more independent and somewhat more
objective than the former state-owned organisations;
They are mostly established world-wide and therefore have to preserve and
defend their international reputations as quality control companies; and,
Their controls appear to be more reliable as they are made under specific,
clear and well-established rules and criteria.
However, quality controls managed by private firms can generate some problems:
the most important being that international firms are not specifically interested in
improvements to the standard quality. They perceive and organise their quality
controls as a task to be executed as efficiently and as effectively as possible.
However, on the basis of their results and any quality defects, they are not required
to plan nor to implement any specific measures to improve quality and neither have
the means nor the skills to do so.
41
Privatisation of quality control will not resolve the problem of quality in Robusta
producing countries. It will only ensure that the coffee available for export is
properly evaluated. But the issue of the product’s low quality remains essentially
unresolved: what is the most appropriate organisation or structure to plan and to
implement policies on quality to improve the general quality standard of the
product?
To rely on public authorities and Ministries is not convincing as they have
withdrawn from all operations in the sector as a result of liberalisation. They no
longer have direct control of the product and do not receive the necessary
information from the market, the sector and the operators to elaborate and adopt
specific policies on quality. In any case, they are unable to implement policies as
liberalisation has deprived them of the means.
The solution could be to rely on private operators who control the product, i.e. who
produce, buy and sell it, for two reasons:
•
•
They have all the necessary information since they are in close contact with
the international market (volumes, quantities, quality, market information,
international trends on the coffee market, etc.); and,
They stand to benefit from any improvements in quality (the product should
generate a higher price premium on the market, which should be reflected in
a higher price paid to producers).
Concerning quality, it is necessary for the private sector (from production through to
export) to become better-organised in order to make further elaboration and
implementation of policies possible. In a liberalised sector, this responsibility,
which was formerly assumed by public authorities, should be partially or completely
passed over to the private sector. In some cases, it may be fruitful to encourage
greater collaboration between the private and public sectors to avoid neglecting this
important issue.
Quality control should be considered as a service to be provided and financed by
exporters, unless importers ask for special and additional controls in the same way
that buyers have asked for extra services. As stipulated in the European Contract
for Coffee concerning the control of weight during shipment: “The buyers can
require the weight of shipment to be supervised, provided they give notice to the
sellers in due time and bear the costs thereof”, and similarly, “The sellers can
require the weighing to be supervised at the port of destination, provided they give
notice to the buyers in due time and bear the costs thereof”.
Issuing a quality certificate proves that the exporter has fulfilled his obligations
concerning product quality. It also represents protection for the exporter. In the
absence of any quality control prior to export, the exporter will have to rely on his
customer’s evaluation, which can occasionally be biased in the case of arbitration.
Current quality controls should be complemented by liquoring.
Taste
characteristics are the most important criteria for roasters and traders. It would
provide a more comprehensive and “full picture” of the coffee for importers: a
physical description and organoleptic characteristics.
42
The liquoring of Robustas could be organised and structured in a similar way to
Arabicas, even if the taste characteristics do not need to be as detailed. There is
no need for heavy investments. On the basis of the characteristics of the coffee in
each producing country, an expert in liquoring should be hired to develop a new
classification including physical descriptions and taste characteristics. This expert
should also make recommendations concerning any necessary new investments
(including a review of the existing material and equipment) to carry out physical and
taste analyses.
In addition to the physical description, the moisture content should be
systematically specified (at not more than 13%) and strictly enforced to prevent
coffee from fermenting during sea transportation or storage.
Sales
b)
Roasters and traders need origins which sell both spot and forward contracts.
Origins should be “on the market” all year long in order to yield the best average
price. The most important factor in this respect is the reliability of the exporters.
Access to the exporting profession should not be totally free and unrestricted but
should be regulated.
Traders and roasters are generally satisfied with the existing contracts (European
Contract for Coffee, AFNIC Contract, and Dutch Contract).
Packing / transportation
c)
Roasters and traders prefer 60 kg bags loaded in containers, with the exception of
the larger operators which are already properly equipped to handle containers with
bulk coffee or big bags.
Some European ports have the necessary equipment for bulk coffee or big bags,
for example, Bremen (Germany) and Trieste (Italy). However, this is not the case
in Le Havre (France).
It is clear that transportation in bulk (bulk coffee in containers) will increasingly be
used in the future as it saves time and money and enables roasters to store coffee
in silos. African origins should progressively plan to equip their ports with the
necessary equipment (Abidjan in Côte d’Ivoire is already equipped to handle bulk
shipments).
No comments were made with regard to storage conditions and equipment.
Only Cameroon was mentioned with regard to the transit conditions for coffee from
RCA. Customs regulations concluded with the Central African authorities should
be respected and applied. Generally, transit countries (Cameroon, Kenya and
Tanzania) should agree to deliver any necessary and existing transit documents
(for example, the “non manipulation certificate”).
43
Regulation of exporters
d)
Regulation of exporters is often considered to be the opposite of liberalisation. In
fact, professional associations can be considered to be a characteristic of a
successful liberalisation process. It is indicative of a structured private sector
existing within the economy, which accepts full responsibility for all its necessary
operations and obligations.
Most producing countries have been urged to liberalise their coffee sectors in order
to improve and rationalise the marketing and processing of soft commodities. In
this context the regulation of exporters is recommended, not to limit the number of
exporters allowed to export coffee, but to ensure that only professionals and highly
skilled operators will enter into the profession.
Most producing countries liberalised their soft commodity sectors by suddenly and
completely withdrawing their public services and authorities from the sector. The
objective was to leave all these responsibilities to private sector operators.
However, all of these measures were implemented before the private sector was
fully prepared to take over.
It is important to remember former systems of marketing before liberalisation, and
the main consequences of their abolition. Before liberalisation, there were two
systems of marketing:
•
•
A state-owned organisation (Marketing Board) controlled all aspects of
produce marketing. There was no competition, no private firms involved in
the marketing system, and the price paid to producers was fixed and
stabilised by public authorities; and,
Private firms, closely controlled by public authorities through a state-owned
organisation (Caisse de Stabilisation), which effectively fixed all prices in the
sector. Everywhere, prices fixed by the authorities were compulsory. There
was no competition among private operators, as most of the time they were
only permitted to operate in separate producing zones.
Unfortunately, these two marketing systems became too inflexible, due to the
steady increase in functioning costs. Public authorities tried to adapt them by
introducing competition through a system of indicative prices but eventually had to
completely liberalise their commodity sectors.
After liberalisation and deregulation many new exporters or middlemen entered the
coffee sector. Most of them saw an opportunity to make money with little or no risk
as access to the professions was liberalised and prices on the world market were
rising.
The increase in the number of operators had three main consequences:
•
•
•
An increase in “origin risk”;
An increase in speculation; and,
A decrease in the quality of the product.
44
Increase in “origin risk”
After liberalisation, most operators were in a situation in which they sold at a known
price (the price of the forward contract concluded with overseas buyers), but in
many cases were forced to ignore the price at which they would buy the coffee.
There was an increase in the risks for all operators resulting from an increase in
“origin risk”.
If, between the time the exporters signed contracts and the time they had to deliver,
the price on the international market had increased, they were unable to fulfil the
contract, unless they accepted the consequent losses. At best, they bought the
coffee for sale on the spot market in order to make a return.
Conversely, if the exporters had bought coffee from producers and prices on the
international market subsequently decreased, they were not able to sell with profits
and were forced to store the coffee until prices increased again.
In these conditions, most of the liberalised origins stopped selling through forward
contracts and, due to their unreliability, overseas buyers began to refuse to
conclude forward contracts with them. These origins therefore became “spot
origins”, not considered to be the best way of selling coffee, as they lose the
premium which is often generated by forward sales.
A strengthening in speculation
This phenomenon is due to both liberalisation (an increasing number of operators)
and to the increase in spot sales. Internal prices in liberalised sectors were not
only determined directly by international market prices, but were also subject to
much greater price variation and volatility than international prices. The stronger
the competition, the wider the internal price variations. The attitude of operators
became purely speculative as they searched for the best opportunity to buy or sell
their coffee, and meant that they stored coffee when prices were rising and sold it
when prices were declining. This occasionally resulted in temporary shortages of
product, which prevented exporters from delivering the product to overseas buyers
in the allotted time. The operators’ behaviour was all the more speculative since
they either received incorrect information or very little information at all.
A decrease in the quality of the product
In these conditions, the quality of the product decreased. It became imperative to
collect as much coffee as possible, whatever the quality (the well-known
phenomenon of “run for product”).
Regarding quality (see above), this situation made it necessary to reorganise the
coffee sector to enable operators to work in improved conditions and to ensure the
longer term development of the coffee sector.
Moreover, there is a need to reorganise professions, particularly exporters, as they
are counterparts of overseas buyers who require more reliable operators to work
with. Importers will conclude forward contracts with local exporters only if they are
45
sure that contracts will be respected and the product will be delivered as agreed.
The regulation of exporters should meet these requirements by ensuring that only
reliable and capable operators are permitted to become exporters. The idea is not
to limit competition among licensed operators but to ensure that competition is fair
and that exporters maintain the reliable image of the origin.
Information / promotion
e)
Some African origins should remember that even the best products need some
promotion and market information. Some roasters or traders wish to buy or import
Robusta from new origins and diversify their supplies, but sometimes their requests
for information go unanswered (for example, information on available qualities,
quantities, samples, sales conditions, etc.). West African origins such as Côte
d’Ivoire and Cameroon, were particularly mentioned. This lack of promotion and
available market information should be taken into account by local authorities and
professional organisations in order to adopt new promotional activities. Uganda
and other non-Robusta origins in East Africa provide some good examples to
follow.
Replanting / intensification of production
f)
With regard to production, cultivation needs to be intensified. This could mean
developing new high-yielding varieties which, for the same amount of work and
inputs, would result in higher yields. These improved varieties should also be more
resistant to pests and diseases. As the establishment of new farms decreases and
pressures on land availability increase, increasing production will increasingly refer
to increasing the yield per hectare. Actions must go beyond the mere replacement
of old planting materials. New varieties need to be introduced with a higher yield,
while maintaining the desirable characteristics required by the markets, which were
described earlier in this report.
Other actions could be taken in order to decrease marketing costs and increase the
fluidity of sector operations. This inevitably implies infrastructure improvements.
Some road networks are in such poor condition that they hinder the movement of
products to ports of export (see Madagascar).
3.3. Sector structuring
Considering the variety of situations occurring in different countries and the need to
improve the many aspects of marketing developed in this report (quality, risks, reliability of
operators, necessary fluidity of the coffee sectors, etc.), professional and interprofessional organisations should be strengthened or at least created where they do not
already exist. These organisations could conclude inter-professional agreements, which
would establish ground rules among operators and promote product marketing in
appropriate conditions to benefit the genuine market professionals. This would decrease
the risks, eliminate excess speculation, and guarantee fair and long term balanced profits
for all operators in the sector, including coffee growers.
46
Primary producers should also be collectively organised and structured. Producers
cannot be adequately represented in inter-professional organisations given the current
circumstances and the degrees of geographic and regional disparity.
Strengthening producers’ organisations (for marketing) would also help to structure
primary collection and contribute to offset the systemic drawbacks of a smallholder
system, over which there is no control but which “fragments” production, raises marketing
costs and increases the risks. In some countries this involves legislative measures to give
co-operatives or producer associations a legal status so that they can have a real
commercial role, as in Côte d’Ivoire.
Strengthening co-operatives at the primary collection stage and making them more
professional would also contribute to eliminate informal or illegal intermediaries, who often
damage product quality and raise marketing costs by increasing the number of nonprofessional operators. These structures could be managed either by exporters’
associations or in close collaboration between co-operatives and exporters’ associations.
In many countries, exporters understand the importance of strengthening these kinds of
producer organisations and could play an important role in their development on condition
that they assist in the programme and strategy definition.
Strengthening co-operatives and producer associations can also facilitate local
transmission of extension services, which, in their former structure, suffered from
budgetary and financial restrictions. It would contribute to all the measures taken which
might affect production (the establishment of nurseries, distribution of seedlings, training
in new cultivation techniques, etc.) and in phytosanitary programmes, even if technical
assistance may initially be required. Revamping the Robusta sectors will inevitably
involve replanting and, therefore, distribution of new planting material. Strengthening the
co-operative system could yield substantial cost savings for these operations.
The structuring of associations at all levels and their involvement in decision-making
processes, and the planning and implementation of such programmes, would have two
main advantages. Firstly, it would be a strong and positive signal towards markets and
overseas buyers that the sectors are well organised and structured in a private system.
The situation would no longer resemble a “no state intervention” system (disorganisation)
but more “a private initiative and responsibilities” system (reorganisation). Secondly, it
would fulfil and integrate the liberalisation system by making sectors more commercially
viable and self-sustaining in the longer term. It would reinforce the legitimacy of private
associations by giving them additional responsibilities and a leading role in the sectors.
There are no ways of reinforcing organisations (whether they are exporters' associations
or other operators' associations), but to give them real roles, responsibilities and tasks.
47
48
Appendices
49
50
Appendix 1
LIST OF CONTACTS
POLAND
Magadalena Frydrych-Logistic
ELITE POLSKA Sp z o.o.
Swadzim k. Poznania
ul. Poznanska 50 60-080 Tarnowo Podgòrne
(48)61 8166-67
Jerzy Gizinski-Managing Director
Marcin Zak-Commercial Director
ASCOT CO. Ltd
ul. Piekna 28/34 m.7
00-574 Warszawa
(48)22 622 35 46/7
Krzysztof Pawlowski - Director Commodity & Citrus Division
AGROS TRADING co Ltd
ul. Chalubinskiego 8
00-613 Warszawa
(48)22 830 06 16
Wojciech Guzowski
PRODUCT PROMOTION Ltd
ul. Kolobrzeska 26 02-920 Warszawa
(48)2 624 96 85
Dariusz Grygiel - Senior coffee buyer
PRIMA CAFE S.A.
ul. Murawa 29
61-655 Poznan
(48)61 823 80 22
Marta Gawlinska
TCHIBO POLAND
Marki Warszawa
GERMANY
A. Christmann - Food and coffee buyer
TCHIBO FRISCH-ROST-KAFFEE GmbH
Uberseering 18
22 297 Hamburg
(49)40 63 87-2239
H.Clausen – Coffee Department
KORD Betieligungsgesellschaft mbH & Co KG
Sandtorkai 2
20457 Hamburg
(49)40 37 88 922
P. von Enden
KRAFT JACOBS SUCHARD GMBH & CO KG
Langemarckstr. 4-20
28 199 Bremen
(49)42 15 9901
K. Ronning
MELITTA KAFFEE GMBH
Dortmunder Str. 1 28 033 Bremen
(49)42 15 3861
UNITED KINGDOM
D. Towler
ALAN J. RIDGE &BREMINER Ltd
1 Kentish Buildings
125 Borough High Street
London SE1 1NP
(44)171 403 8787
M. Davis – Coffee Buyer
COMPTON SIBLEY Ltd
63 A Union Street London SE1 1SG
(44)171 403 3305
P. Ayling – Coffee Buyer
NESTLE UK Ltd
11th Floor St George's House, Park Lane
(44)181 667 5085
51
Croydon CR9 1NR
J. Pinkanen
GUSTAV PAULIG Ltd
Liluodonkuja 2
00980 Herlsinki
(358)931 981
BENELUX
F. J. Vanhorick - General Manager
N.V. THEOBROMA
Hogelhiweg 15
1101CB Amsterdam
(31)20 5675881
H. Mertens – Coffee buyer
G. BIJDENDIJK B.V.
Badweg 5A
8085 RL Doornspijk
(31)525 66 21 44
F. E. M. Douqué - Coffee buyer
J. TH. DOUQUE'S KOFFIE B.V.
Prinsengracht 379 1016 HL Amsterdam
(31)20 622 24 77
FRANCE
J.C. Fondimare - Coffee buyer
CAFE LEGAL
5, rue Saint Just 76 059 Le Havre
(33)2 35 48 61 46
P. Masson
MAISON PAUL JOBIN & CIE
8, rue du Maréchal de Lattre de Tassigny
(33)2 35 19 35 00
SATI
4, rue de Nantes 67 027 Strasbourg
(33)3 88 34 63 36
M. Dothée
CAFE EXCELLA S.A.
Avenue de Thiers 63 370 Lempdes
(33)3 73 83 39 50
SWITZERLAND
G. Van Elst
DOUWE EGBERTS
Baarestr. 12
6300 Zug
(41)42 23 3515
A.Micucci
COFIROASTERS (SEGAFREDO ZANETTI)
67, rue du Rhônes 1211 Genève
(41)22 735 21 22
NESTLE VEVEY
1800 Vevey
(41)21 92 43 111
WALTER MATTER SA
57, avenue de Champel
(41)22 839 36 00
52
1206 Genève
76 600 Le Havre
Appendix 2
Questionnaire
COMPANY
ROASTER
TRADER
NAME(S)
POSITION(S)
ADDRESS
ZIP
COUNTRY
PHONE
Email
FAX
1 - How much coffee do you buy each year ?
Tons
2 - How much Robusta ?
Tons
Is the quantity of Robusta you buy decreasing or increasing ?
decreasing
increasing
3 - From which origins do you regularly buy Robusta ?
Origins
Quantity (in Tons)
Cameroon
Côte d'Ivoire
Guinea
Indonesia
India
Madagascar
République Centrafricaine
Togo
Uganda
Vietnam
Zaire
Others : specify
53
4 - For which use do you buy Robusta for ?
ground/beans (specify trademarks)
instant (specify trademarks)
(including other products as cappuccino, etc....)
In the above mentioned use, you consider Robusta as :
"A filling coffee"
An essential component of the blend
roast and ground
roast and ground
in beans
in beans
instant
instant
other use :
other use :
BUYING
5 - Taking in account your needs, do you prefer :
a producing country which exports coffee all the year long (and give you the possibility to conclude forward contracts with
local exporters). Please justify.
a producing country of which coffee offers are concentrated on certain periods of the year ? When do you mostly buy
coffee ? Please precise month(s).
6 - Organisation of buying
Do you buy coffee
by forward contracts : how long in advance (on shipment) ?
What maximum period for shipment do you accept ?
by spot contracts (in warehouse) ?
In which proportion (on shipment/on stock) and for what reasons ?
54
7 - The problem of reliability of private exporters in producing countries is essential. In which countries do you consider this
problem to be more important ? (please classify producing countries by decreasing order of reliability).
8 - Above which level of production is an origin interesting for you ?
tons. Justify.
9 - Considering your needs in Robusta, which origins are the most available on the international market ? Please classify them
and comment.
Origins
Justification
TRANSPORT
10 - For coffee, one usually means transportation by sea. But, some producing countries as Uganda and Republique
Centrafricaine are landlocked and coffee has to go through other countries. Sometimes transportation of coffee through other
countries can be difficult.
Have you already met with this sort of difficulties ?
yes
no
If your answer is yes, please explain what sort of problem and where.
Were they solved ?
yes
no
In your opinion what could be done or implement to avoid these problems in the future ?
11 - Concerning transportation of coffee by sea :
11a - Which producing countries are particularly badly served by shipping companies ?
11b - Can an excessively high freight rate bring you to eliminate certain producing countries ? Please specify.
55
11c - In your opinion, who is responsible for delays in ports in producing countries :
shipping companies ?
general organisation in ports ?
In the latter case, please precise who is responsible ? (justify and give the origins concerned)
Stevedoring
Forwarding agent
Customs
Lack of equipment (storage, port handling equipment, etc...)
Phytosanitary treatment
Others
12 - Do you sometimes charter ships ? Above which tonnage ? From which origin(s) to which destination(s)
PACKING
13 - Which packing do you prefer ?
containers
big bags
bulk
Why ?
14 - Are you completely satisfied by packing (quantity of bags by container, ventilation, equipment to humidity, quality of
bags, marks, etc...) ?
yes
If the answer is no, please explain:
no
56
CONTRACTS
15 - Which type of contract do you use ?
European Coffee Contract (amended in 1998).
Dutch contract (for coffee from Indonesia).
AFNIC contract.
Other type of contract.
Why ?
Do these contracts meet your needs ?
Would it be necessary to make some corrections ? Please specify.
16 - By origin, which incoterm do you usually use ?
Incoterm
Origin
warehouse in producing country/FOT
..........................................................
FOB
..........................................................
C&F
..........................................................
CIF
..........................................................
FOT
..........................................................
delivered factory
..........................................................
QUALITY CONTROL
16 - Which country(s) offer(s) the best quality control service ?
17 - Do you rely on quality certificates issued by producing country authorities ?
Yes, for which origins ?
no, for which origins ?
18 - The quality control in producing countries consists in grading and classifying green coffee. Do you think it is worth to taste
the cup of coffee.
yes
no
Please explain what for?
57
19 - In your opinion, which type of firm is the most reliable for quality control ?
private specialised firm as SGS, Veritas
public or parapublic organism
local private firm (for example controlled by the local exporters association)
Why ?
20 - In your opinion, can we consider to suppress quality control in producing countries ?
yes
no
Why ?
INFORMATION
21 - Due to local difficulties (insecurity, economical problems), it is particularly difficult to obtain reliable information in some
producing countries (production trend, evolution of internal prices, estimates of the campaign...).
In which origins is the lack of information particularly important?
22 - In your opinion what could be done to resolve these problems ?
23 - Do you know origins with a particularly performing information system ? Please explain why these information systems
are particularly efficient.
24 - In the context of underway liberalisation, has the profession of exporter to be credibilised ? (licence, patents) ? On which
criteria (financial, industrial infrastructure and equipment, quantities exported the last years,...) ?
QUALITY EVALUATION
25 - Among origins from which you currently buy coffee, where did you notice a most important degradation of quality ?
26 - In your opinion, what are the reasons ? What could be done or implement to improve the quality ?
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27 - Which grade do you prefer to buy ? (one or more solutions)
large bean : retained by screen 18
Grade 1 : retained by screen 16
Grade 2 : retained by screen 14
Grade 3 : retained by screen 12
Grade 4 : retained by screen 10
Triages
Brokens
Black Beans
28 - Which grades do you never buy ? Why ?
29 - What is the most important for you ? The size of beans or the uniformity in the size of beans, or twice ?
30 - Is the excess of moisture (above 13%) a problem you have often met with ? Please precise the origins ?
31 - Which are the most frequent defects ? Please precise the origins.
black beans
origin(s)
cherries
origin(s)
skins
origin(s)
presence of sticks, stones,...
origin(s)
immature beans
origin(s)
pulper nipped beans:
broken or crushed beans
origin(s)
broca-damaged beans
origin(s)
stinker beans
origin(s)
whitish or pale beans
origin(s)
32 - Among these defects, please precise which one(s) is(are) the most grave ? Which one(s) must be eliminated in priority ?
59
33 - Which defect(s) leads you to reject a lot of Robusta ?
34 - Even if Robusta are not evaluated accordingly to the quality of the cup, what is the characteristic for you and your
market/market niche of
a "perfect" Robusta ? Is it a
"neutral" or a
"pungent/acrid with a strong taste of Robusta" Robusta ?
Precise if neither one nor the other
a "bad" Robusta ? Is it a
"neutral" or a
"pungent/acrid with a strong taste of Robusta" Robusta ?
Precise if neither one nor the other
35 - Characterise the cup of each Robusta you usually buy. List the origins and characterise the cup for each of them.
origins
liquor
Cameroon
Côte d'Ivoire
Guinea
Indonesia
India
Madagascar
République Centrafricaine
Togo
Uganda
Vietnam
Zaire
36 - Are differences in cup tasting very important/fundamental in your choice of Robusta ? If not, on which criteria do you
choose them ?
37 - Which cup defects or characteristics should be eliminated in priority ? In your opinion, what/who is (are) responsible for
these defects ?
38 - Which origins did you use to buy and do not buy any more ?
60
39 - For what reasons don't you buy them anymore ?
40 - Some origins generate premiums on the international market (Uganda for example). In your opinion, why do these origins
generate premiums ? Is this due to the quality ? To others factors ?
41 - If Robusta of certain countries would become very similar (aspect and cup) to those that currently generate premium do
you think that they would generate premium too ?
Please justify.
yes
no
42 - Would the passing of the coffee through a washing/decoating machine after processing considerably improve the quality ?
Would it be interesting for you ?
Please justify.
yes
no
yes
no
43 - As a conclusion, do you think that an improvement in the quality of Robusta could increase its consumption ? Please
justify.
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Appendix 3
PRESENT TRENDS OF 5 FACTORS IN 7 PRODUCING COUNTRIES OF ROBUSTA
Quality
Availability
Reliability
Cote d'Ivoire
Cameroon
Indonesia
Madagascar
Uganda
Vietnam
RCA
62
Price
Logistics
Appendix 4
Table of defects by origin
Côte d'Ivoire
Uganda
Togo
moisture
black beans
X
Madagascar
Cameroon
X
X
X
Guinea
Zaire
RCA
India
X
X
X
Skins
X
X
immature beans
X
X
X
X
Cherries
sticks, stones
Indonesia Vietnam
X
X
X
X
X
X
X
X
X
X
X
X
broken or crushed
beans
X
X
X
broca damaged
beans
X
whitish or pale
beans
X
X
63
X
X
Appendix 5
Evaluation of taste by origin
Germany
Cote d'Ivoire
strong Robusta
taste
Uganda
neutral (but too
expensive), regular
Togo
neutral, soft
Madagascar
strong Robusta
taste, earthy
mouldy
Cameroon
Strong
Robusta taste
Guinea
Strong
Robusta taste
Italy
strong to neutral
mild
neutral
hardish but
tolerated in Italy
Hard
Neutral
France
hard, wild, strong mild
neutral
Hard
Strong
United
hard but good
body flavour
neutral slightly
hard
good flavour
even cup
-
earthy
phenelic
strong, very
special
-
hard but good
flavour
Poland
hard (but less
than Cameroon
strong taste,
sometimes earthy
mild (similar to
Togo but better and
more consistent),
neutral
mild (very
strong to rather
similar to
hardish
Uganda) to rather
neutral, good
filler
very aromatic
very irregular,
mild to strong
and sometimes
earthy
Switzerland
neutral
neutral, mild
mild
neutral
Benelux
hard taste
sweet, soft
soft, neutral
(too) hard
Kingdom
Zaïre
fairly neutral
but earthy,
sometimes
mouldy
earthy
RCA
-
India
neutral (too
expensive)
soft
Indonesia
Vietnam
neutral, earthy neutral, light,
mild
neutral
mild
mild
spicy, neutral
neutral spicy
Wild
Strong
wild
neutral
mild
mild to spicy
neutral
spicy
neutral
mild
-
-
-
heavy indo
smack
full and good
if clean
light, fairly
neutral
-
earthy
-
sometimes
fruity notes
neutral and
good taste,
flavour
mild, low
Robusta taste,
neutral
medium to
hardish
robusta taste,
sometimes
fruity,
even cup
good,
neutral taste,
sometimes
fruity
Chocolate
taste
Strong
Neutral
neutral
mild
mild
spicy
neutral
rather neutral,
strong taste,
hardish
neutral, soft
neutral,
hardish
hardish
-
soft sweetish
neutral
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