It is probably the most common consumer habit today.
Millions of people worldwide start their day with a cup of coffee. They choose to have business meetings over coffee and catch up with friends in coffee shops.
Coffee has become an integral part of the culture in many countries and is a means of socialising and bringing people together, be it in a friendly or professional setting.
As expected, the widespread consumption of coffee has created a massive, multi-billion-pound industry. Coffee chains have popped up on every street corner, all vying for a slice of this hugely popular market.
At the same time, small, local coffee shops are also fighting for their share. These neighbourhood cafés are gathering places for people of all ages and walks of life, offering a space to socialise, enjoy a drink, and catch up on the latest news. Whatever one’s preference, coffee has undoubtedly become a focal point of our daily lives.
How did it all begin?
It started with an observant shepherd in Ethiopia, who noticed his goats behaving strangely after eating berries from a particular shrub. He found that these berries gave him an energy boost when he tried them himself.
He shared this discovery with a monk, who boiled the berries and made an infusion, thus creating the world’s first cup of coffee. This drink soon gained popularity, and by the 12th century, it had reached the Arabian Peninsula through trade.
Yemen was the first country to cultivate and develop coffee. Arabs, Persians, and Turks embraced the beverage, and Venetian merchants introduced it to Italy.
According to mixanitouxronou.gr, coffee was initially considered a ‘satanic drink’ in Italy until Pope Clement VIII tasted it and loved it so much that he gave Christians his blessing to consume it.
In the 17th century, the Dutch were the first to obtain seeds from the Arabs, as exporting them was forbidden to maintain the Arab monopoly. They planted these seeds in their Indonesian colonies. During this time, coffee spread throughout Europe and inevitably made its way to the ‘New World’, reaching America.
European colonists initially drank mostly tea, as was the custom, but in 1773, a heavy tax on tea by King George III led Americans to boycott tea as a patriotic duty, and they turned to coffee instead. To this day, coffee remains the most popular drink in the US.
The famous Brazilian coffee has an intriguing origin story: Francisco de Mello Palheta travelled to Guinea to obtain seeds but was refused. However, he charmed the French governor’s wife, who secretly gave him the seeds, changing the course of coffee history.
Brazil now boasts the largest coffee production globally, thanks to its favourable climate and vast lands, generating enormous revenue.
The producers
Millions of tonnes of coffee are consumed daily worldwide. For coffee-producing countries, the cultivation and distribution of coffee significantly shape their economic and social structures.
Brazil is the top producer, with 901,000 tonnes per year, followed by Vietnam at 770,000 tonnes. Honduras, Colombia, Uganda, India, and Peru are also significant producers, contributing to the global coffee supply. It is worth noting that 56% of Americans over 18 drink coffee daily, and the US coffee industry generates a whopping $42.5 billion in annual revenue.
There are over 100 species of the Coffea plant, but only three are commercially cultivated: Coffea Arabica (Arabica), Coffea Canephora (Robusta), and Coffea Liberica (Liberian Coffee). The latter accounts for just 1% of the global market, mainly grown in Liberia, Malaysia, and Côte d’Ivoire.
Arabica and Robusta are the most popular and commercially significant varieties. Arabica is the oldest, first discovered in Ethiopia in 1753, and today it makes up the majority of global production. It is considered superior due to its high acidity and 1.2%-1.5% caffeine content. Robusta, discovered in Congo in 1898, has a much higher caffeine level of 2.2%-2.7%, giving coffee a more bitter and robust flavour.
The consumers
Europeans consume the most coffee globally, with over 3,000,000 tonnes annually. Europe makes up about one-third of the global coffee market, followed by Asia and Oceania, which together consume one-fifth.
Finland has long held the record for per capita consumption but has recently been surpassed by Luxembourg, whose citizens drink nearly 10 kg of coffee per person per year. Finland now sits at 6.6 kg per person.
Greeks are in the top ten, consuming 3 kg per capita annually. Interestingly, Italy, known for its refined coffee culture, ranks 21st at just 2.5 kg per capita. Sweden comes third with 4.8 kg, followed by Norway and Denmark at 3.9 kg and 3.7 kg, respectively. Russia is last, with less than 1 kg per person per year. Just above Russia are Tunisia, Slovakia, and Russia, consuming 1.2, 1.2, and 1.1 kg, respectively.
Different strokes for different folks
- Greece – Frappe cold
- Italy – Espresso
- Spain – Cafe bombon
- Ireland – Irish coffee
- Vietnam – Egg coffee
- Australia – Flat white
- South India – Kaapi
- Turkey – Turkish coffee
- Sweden and Finland – Kaffeost
- Mexico – Café de olla
- Brazil – Cafezinho
- Austria – Melange
Coffee inventories are at a two-decade low
The global balance of coffee bean demand and supply is currently unstable. According to the US Department of Agriculture, consumption for 2023-24 is estimated at a record 170 million 60-kilogram bags, the highest in two decades. At the same time, inventories have shrunk to just 16% of consumption, the lowest in at least 20 years. This means that inventory levels have decreased by more than 50% relative to consumption, and there is little room to improve this year’s supply.
Coffee culture in Cyprus
Cyprus also has a rich coffee culture. From traditional coffee shops to modern cafés and major chains, coffee has established its presence on the island. Whatever one’s preference, there is something to suit all tastes. Recent surveys show a high number of coffee shop chains relative to the size of Cyprus, as going for coffee has become an affordable entertainment option, replacing clubs and restaurants to some extent.
Both coffee chains and local cafés face intense competition, leading them to adjust prices and expand their offerings to stay afloat. The coffee market in Cyprus is estimated to be worth around €660 million.
Inflation
After a significant increase between 2021 and 2022, coffee price inflation in the EU continued to slow in March 2024, according to Eurostat. Cyprus was one of 12 EU countries that recorded negative inflation rates in coffee prices (-2.3%) in March 2024 compared to March 2023. Specifically, the annual rate of change in coffee prices in the EU was +1.0% in March 2024, approaching the levels of July 2021 (+0.8%).
The inflation rate for coffee prices has been decreasing since it peaked in October 2022 at +17.4%, and this slowdown is relative to the sharp increase that began in October 2021 (+2.0%). Although price increases slowed across the EU, there were variations between countries.
Fifteen EU countries saw higher coffee inflation in March 2024 than in March 2023, with Croatia, Romania, and Bulgaria experiencing the highest rates.
The remaining 12 EU countries recorded reduced inflation rates, with Finland and Lithuania showing the most significant negative rates at -15.5% and -15.4%, respectively. Denmark, the Czech Republic, and Sweden also saw notable decreases
