Asia is coffee’s largest area for growth: GCR Leaders Symposium

Many Asian markets leaders agree that their region represent the coffee industry’s largest target area for growth, according to presentations and discussions at the GCR Leaders Symposium in Singapore earlier this month.  Almost 100 industry members from 10 countries gathered at the Marina Bay Sands on 5 March to network with regional leaders and learn about the challenges and opportunities in the booming Asian market. Anthony Cottan, the Director of PT Sari Coffee and the head of Starbucks’ Indonesia operations, opened the day with an overview of the US coffee giant’s activities in Indonesia. “The potential here is huge,” Cottan told the crowd, pointing to limited tourism figures in Indonesia that are set to skyrocket. He said that after over a decade of terrorism attacks, tsunamis, volcanos and more, Indonesia’s economy is now growing strong, and the potential for increased out-of-home coffee consumption is growing along with it.  “We’ve gotten over all those things and we are looking to the future. And the future is quite bright.” Cottan outlined positive indicators for the Indonesia coffee industry, including a young population and an increase in disposable income. The first panel discussion was a timely one on coffee prices, with coffee prices continuing to peak the week of the event. Volcafé’s Director of Sustainability and Business Development Mark Furniss started off the session with a history of coffee prices, showing that price spikes are nothing new. Based in Singapore, Furniss also explored the rise of the Asian coffee market, and what increased regional consumption could mean for coffee prices. “Asia is the real compelling growth story in the least few years,” Furniss told the audience, outlining the boom in regional demand. Following on from talk of volatile prices, Marc Brown from INTL Stone further expanded on why prices are so volatile, in the exposure to factors outside of market fundamentals. He went on to outline what roasters can do to mitigate their risk factors. Wayhu Wibowo, Indonesia Country Manager for the 4C Association, discussed what volatile prices mean for the livelihoods of producers, and how certification can help in this regard. In the session on coffee service, Lance Brown, Australia’s National Account Manager for Commercial Coffee Lion, provided an overview of the booming Australian market, explaining how a supplier can help boost an industry as a whole – and profit as a result.  “You can’t just put the product out there. You need to build relationships and keep customers in good stead,” he said. Anthony Ku, Director of Eco ConneX based in Singapore, picked up from Cottan’s presentation, outlining the degree to which the middle class in Asia will be a powerful economic force in years to come. He noted that by 2020, there will be 1.7 billion people in Asia with significant disposable income. “Imagine having 1 billion new customers,” he said. “Imagine everyone spends just an extra $10 a day on something they couldn’t previously afford. That’s $1.3 trillion… and some of that will be on coffee.” The afternoon kicked off to a lively start, with a special presentation of the inaugural GCR Magazine Coffee Leaders Lifetime Achievement Award to Eric Fave, the inventor of the Nespresso coffee capsule. An exclusive video, produced by Nespresso but never publicly released, showed Favre’s determination in pushing the Nespresso product forward, despite Nestlé’s hesitation. The result was a new department with Favre as the first General Director of Nespresso. The session on specialty coffee welcomed Toby Smith, Founder of Toby’s Estate Coffee; Ryan Tan, three-time Singapore Barista Champion; and Brad Buchanan, General Manager of Coffee Media and Events Prime Creative Media. The three discussed the potential for growth in the Asian specialty coffee market, including increased local production of specialty coffee. Santiago Pardo, Director Asia for the Colombian Coffee Growers Association, shared insight into how Colombia has marketed itself directly to select Asian markets, teaming up with private labels to provide quality instant coffee. The day finished with a lively discussion on the coffee industry’s fastest growing segment: single-serve. Trent Knox, General Manager Lavazza Coffee Capsules, launched the session with a striking overview of the coffee capsule market. Knox noted that in the Asia Pacific, 86 per cent of new coffee machines sold were single-serve systems, representing a growth of an astounding 249 per cent. He compared this to figures that said the market had only reached 10 per cent penetration. “This is a period of rapid expansion,” Knox said. Toby Strong, Founder and Managing Director of Podpac, helped the audience better understand the Nespresso-compatible capsule market. He outlined the challenges of the technical and legal framework in this space. “If you go into this with your eyes closed, you will be punished,” he said. The day finished off with a strong presentation from Pascal Schlittler, the CEO and Co-Founder of Mocoffee, a company he started with Nespresso inventor Favre. Schlittler made the exciting announcement that Mocoffee would be the first capsule manufacturer to be producing capsules directly in a producing country, having teamed up with a producer organisation in Brazil. “If you think about what is happening now, coffee is being grown in Brazil, shipped to Germany to be roasted, then it’s being packaged in Italy. This is not sustainable in the long term,” said Schlittler. The next GCR Coffee Leaders Symposium will be held in Melbourne, Australia on 14 May 2014 at Zinc, Federation Square, ahead of the Melbourne International Coffee Expo. For ticket enquiries contact:
Steve.Roberts@primecreative.com.au