It’s a fact that specialty coffee consumption is significantly lower in origin countries than in majority-consuming regions. This is for a number of complex reasons, including the historical structure of the global coffee trading system. 

Throughout the 1600s and 1700s, European colonial powers exported coffee to consuming countries. As it became more accessible over the years, marketing (driven by majority-consuming regions in the Global North) became much more consumer-focused, which led to a sharp rise in consumption through the 20th century. 

Key markets like the US and Europe also generally pay higher prices for coffee, making them more attractive to exporters. This means that consumers in producing countries can often miss out on the highest-quality coffee grown in their own countries. Some exceptions to the rule exist, such as Colombia, where coffee is imported to meet demand for domestic consumption.

But in recent years, targeted, policy-driven initiatives and a growing middle class have driven domestic consumption in a number of producing countries. Although consumption levels remain comparatively lower than in key international markets, a number of coffee brands in Latin America are helping to increase awareness and demonstrate how promoting domestic specialty coffee consumption can add value to the industry.

To learn more, I spoke with Mayerling Gurdián, Heberto Rivas, and Luis Saballos of DELAFINCA COFFEE in Nicaragua.

You may also like our article on why more producers don’t market their own coffee.

Turning the tide: How specialty coffee consumption is growing in producing countries

For the most part, when compared to majority-consuming regions, specialty coffee consumption is overall lower in producing countries. But in larger cities in some prominent origin countries, the specialty coffee market is steadily growing.

According to a Specialty Coffee Association report, Brazil’s specialty coffee market share doubled between 2016 and 2018 from 6% to 12%. Similarly, the same report also found that specialty coffee accounts for between 3% and 5% of Colombia’s total coffee consumption. Furthermore, in 2018, the estimated value of the Colombian specialty coffee market was around US $1.52 billion, and is sure to have grown since.

As a result, more specialty coffee brands and coffee competitors have emerged across the country in recent years. For instance, at the 2021 World Barista Championship (WBC), Diego Campos became the first-ever Colombian to win the competition. 

Two years later, a Brazilian competitor won the World Barista Championship – a historic win for the world’s biggest coffee-producing country. Chilean barista Carlos Medina also became the first-ever Latin American competitor to win the World Brewers Cup.

How growing specialty coffee consumption supports the industry

It’s clear that rising specialty coffee consumption in producing countries has a number of benefits. Most importantly, it opens up new opportunities for local producers and roasters to tap into a growing market.

DELAFINCA COFFEE is an example of these coffee brands. The Nicaraguan company is involved in multiple levels of the supply chain, including production, roasting, and coffee shop service. The first store opened in 2016 in downtown Managua. Today, the brand operates five locations that provide 70 permanent and 25 temporary jobs.

Heberto Rivas is a co-founder of DELAFINCA COFFEE. He has extensive experience working with smallholder producers, and says that wider trends in the industry often begin at the production level of the supply chain.

“We must direct our efforts on diversifying our markets, strategically targeting the domestic market, and creating and continuously increasing demand for specialty coffee,” he says.

The importance of consumer education

The benefits of rising demand for specialty coffee at origin are evident, but the question of how to assist market growth remains. Historically, this meant exporting significant volumes of higher-quality coffee – meaning origin countries retained less value in their markets.

In a recent survey carried out by PDG Español, 55% of respondents stated that the most effective way to promote local specialty coffee consumption in Latin America is through consumer education. Over 21% of people, meanwhile, believe that offering more accessible prices is the best solution.

From these results, it’s clear that coffee brands in producing countries have the opportunity to scale their businesses in differentiated ways that can retain more value within their markets.

Education has played an increasingly key role in specialty coffee, especially following the Covid-19 pandemic. As more and more consumers have shown interest in educational courses and platforms, they have inevitably become more informed about coffee quality, brewing techniques, and more. As it helps to push quality standards higher, the wider industry benefits from this growing interest.

Luis Saballos is the barista general manager at DELAFINCA COFFEE. He believes that education is central to expanding the domestic market.

“Investing in education helps to develop a specialty coffee culture that increases consumer interest and demand,” he explains. “For us, having a coffee academy has been crucial to this. We can train our staff, as well as consumers, to learn more and experiment with specialty coffee.”

Heberto adds that DELAFINCA COFFEE is the first specialty coffee shop in Nicaragua to certify its baristas in the Specialty Coffee Association programmes. 

“We invest in our staff so they can improve their coffee brewing and customer service skills,” he says. “Our baristas can then also share their research-based knowledge with customers so they receive factual information about specialty coffee.”

How brands can encourage coffee consumption in producing countries

To support domestic market growth, it’s important that coffee companies at origin work at multiple levels of the supply chain. This not only improves coffee quality across the board, but also helps to deepen barista and consumer knowledge.

“Barista training and education are key because it’s the baristas who will encourage customers to try new coffees and different flavours,” Luis explains. 

Accessibility is also essential. As it’s marketed as a premium product, specialty coffee can sometimes alienate customers who feel they don’t have the expertise or skills to buy it. 

“We sell coffees at differentiated prices in our coffee shops, which is an effective strategy to help consumers become familiar with specialty coffee,” Herberto says. “People usually start with a house blend, and later become more interested in exclusive and unique coffees.” 

Coffee companies that operate at origin also have a unique opportunity to bring consumers closer to the production stage in the value chain. 

Mayerling Gurdián is a co-founder of DELAFINCA COFFEE. She emphasises that in addition to consumer education, product differentiation, customer service, and coffee shop experience all play a key role in supporting domestic market growth.

“Coffees served to customers and the overall coffee shop experience should reflect all the efforts made in the supply chain, including the post-harvest processing and roasting,” she adds.

Collaboration is key

Unlike roasters and importers in majority-consuming countries, coffee brands at origin can work much more closely with producers. Through its relationships with farmers, DELAFINCA COFFEE strives to be an ambassador of Nicaraguan coffee.

Mayerling tells me that the company works with growing communities in San Juan de Río Coco in northern Nicaragua, where they also operate a farm. She emphasises how this helps them to oversee quality control and traceability across the entire supply chain, and receive consumer feedback.

Value addition and brand differentiation are key principles of the coffee industry, including at origin. One high-impact solution is to promote the growth of specialty coffee consumption in producing markets.

In doing so, coffee brands at origin have the opportunity to raise quality standards across the entire supply chain, and help bridge the gap between producers and consumers.

Enjoyed this? Then read our article on whether specialty coffee is growing faster than global consumption.

Photo credits: DELAFINCA COFFEE

Perfect Daily Grind

Please note: DELAFINCA COFFEE is a sponsor of Perfect Daily Grind.

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