Market Reports

Asia’s coffee consumption boom

As the appetite for coffee continues to grow in Asia, the experience of those who know the region and its tastes is becoming ever more valuable. Established by the Swiss commodities trader Werner Ernst Huber in Singapore in 1962, Boncafe is one such company. Now with a presence in markets right across the region, Boncafe is witnessing and experiencing that growth first hand. Pavinee Khetphanasant is the General Manager of Boncafe in Thailand. She says that while the popularity of fresh, specialty coffee is growing in Asia, it is doing so with a distinct nod towards the warmer climate in the region. Khetphanasant says that the number one trend in Asian coffee now is the growth of cold drinks. “Worldwide, 40 per cent of the revenue of a coffee shop is cold drinks, whereas in Southeast Asia we believe that number is over 60 per cent,” Khetphanasant says. While this trend can be attributed to global giants such as McDonalds and Starbucks, Khetphanasant says that players throughout the industry can now capitalise on the opportunity. “The consumer wants the products and smaller operators are able today to offer high quality beverages that are as good as the multi- nationals, at lower prices,” she says. This trend is occurring in tandem with a growing professionalism in the small to medium- sized coffee businesses in the region, largely driven by the growth of specialty coffee. “Coffee shop owners are becoming more educated and developing drink choices that their customers are demanding,” Khetphanasant says. “Also with that education, we are seeing them purchase more expensive machines and products that produce a superior coffee. Without a doubt, more professionalism is occurring even in smaller operations.” For the time being, Khetphanasant says, the coffee shop will remain the domain of quality fresh coffee in Asia, with only a very small fraction of the market consuming ground coffee in the home. This segment is showing some growth, she says, although it is coming off such a small base as to be relatively insignificant at this point. While on the consumption side the story of quality coffee in Asia is an overwhelmingly positive one, Khetphanasant says that the coffee producing nations in the region are not making the most of the opportunity this represents. “In Asia, with maybe the exception of Southern India, the coffee industry especially on the farming level, suffers from governmental neglect,” she says. “As world markets open up, Asian coffees, which have failed to build a brand and have not worked on efficiency and economies of scale, will face stiff competition from other coffee growing parts of the world. Most notably this competition will come from Africa, South and Central America, where coffee is, and has been, a predominant cash crop and received state and industry attention.” Boncafe will be sharing its knowledge of coffee and the Asian markets at the World of Coffee and Tea Expo taking place in Bangkok in May. Usually held as a segment of World of Food Asia, this is the first year that the coffee and tea industries have had a standalone show in Thailand, an acknowledgement of the growing value of the sector in the region. The World of Coffee and Tea Expo will be held at the Impact Convention Centre in Bangkok from 21 – 25 May, 2014. Boncafe will be presenting several workshops that are open to all attendees of the expo as part of its extensive program of knowledge building and professional development.

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