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Coffee is second to water…
Pickers at work on a coffee plantation
Columns
Lisa Hanna  
February 12, 2022

Coffee is second to water…

Let’s get global, Jamaica

Coffee is the second most popular beverage globally after water, and the second most traded commodity after oil. Every day close to 2.25 billion cups of coffee are consumed worldwide.

Undoubtedly, coffee is globally in vogue, especially with the rise of boutique coffee shops and innovative varieties of hot and cold coffee drinks. Today, no matter where in the world you visit there’s no misunderstanding about a café latte, a cappuccino, or an espresso.

The United States and Europe represent large coffee-consuming markets with a combined share of 70 per cent. China ranks as the fastest-growing coffee market, with a nearly 8 per cent annual growth rate. Top-tier cities in China are already experiencing a rapid rise in coffee shops, with over 7,500 shops in Shanghai, 6,000 shops in Beijing, and over 4,000 in Guangzhou and Shenzhen. It is projected that the global market for coffee shops will reach roughly US$238 billion by 2025.

Further, more young people are buying coffee. Some 65 per cent of millennial consumers between 25 to 39 years old reported drinking coffee within the past day and spending more than US$4 on a single coffee or US$2,008 annually. While 46 per cent of Gen Z’s between 18 to 24 years old said the same. ( Forbes, 2021)

Additionally, coffee beauty products, which were valued at US$590 million in 2018, are expected to reach US$743.4 million in 2023 as the demand for value-added caffeine skincare with antioxidant and anti-aging effects continue to soar. (Market Analysis Report, 2019-2025)

How do we position ourselves to take advantage of these global markets? We must increase our local coffee production to build a robust exportable coffee industry.

Our coffee

Coffee was introduced into Jamaica from Hispaniola in 1728 by the governor, Sir Nicholas Lawes. Jamaican coffee, specifically Jamaican Blue Mountain Coffee, is a luxury product and is regarded as the best and most expensive globally, mainly due to the exact conditions for growing coffee (dangerous slopes over 3,000 feet) and the extensive quality control associated with reaping it.

For these and other reasons, in 2015 Jamaican Blue Mountain Coffee commanded US$1.10 per pound, while other Jamaican coffee retailed for US$0.53 when the average world price was US$0.57 per pound.

Coffee is a commodity and, like all commodities, prices swing on the world market based on supply and demand. In 2020 the price of Jamaican Blue Mountain Coffee and other Jamaican coffee varieties was US$0.53 cents and US$0.44 cents per pound, respectively (Planning Institute of Jamaica Economic and Social Survey 2020). This is precisely why our focus should emphasise value-added coffee products like coffee liquors, caffeine face creams, coffee ice cream, and cold coffee beverages.

The Jamaican coffee value chain goes from farmer to processor to distributor to customer. Unlike other coffee-producing countries, where you can easily buy coffee from cooperatives and suppliers, the Jamaican Government intercedes between the processor and the distributor. The industry is highly regulated with an annual range of approximately nine to 12 active coffee processors in Jamaica.

The Coffee Industry Board of Jamaica, established on June 2, 1950, via the Coffee Industry Regulatory Act of 1948, morphed into the Jamaica Agricultural Commodities Regulatory Authority (JACRA), which handles all the regulation and standardisation of coffee, cocoa, coconut, and other spices.

JACRA’s main objective is to set international best practices quality standards while providing quality assurance and certification services and overseeing the trading of these commodities for both local and export markets. Its vision is to attain global recognition as one of the leading agricultural commodities regulatory bodies that maintain international best practices.

The sad reality is that, with all the local vision and regulation, international reverence and homage paid to our coffee, we are not producing enough to meet not even one country’s demand. Our production of coffee between 2016 to 2019 fell from 7,580 tonnes to 5,587 tonnes. Jamaica is a minor player on the world’s stage, ranking 45th in coffee production. The top 12 coffee-producing countries for 2021 were Brazil, Vietnam, Colombia, Indonesia, Ethiopia, Honduras, India, Peru, Guatemala, Uganda, Mexico, and Laos, producing close to 9.2 million tonnes, accounting for almost 87 per cent of global production (Abid Khan 2021). While our two nearest neighbours — Haiti (21,000 tonnes) and the Dominican Republic (24,000 tonnes) — outproduce us by far.

Going global

Agriculture can grow our economy, but we need to pick winners to compete globally, and coffee is one of these winners. However, to sell our coffee products in the global marketplace, we need strategic leadership with an urgent comprehensive plan to transform our current coffee yield into being internationally competitive with a value-added export focus from raw materials to finished goods.

Most retail coffee brands Jamaicans purchase locally at supermarkets and some coffee shops are exclusively imported or mixed with imported coffee, primarily due to shortages of local coffee beans. Currently, an import duty of US$1.41 per kilogramme is payable by all importers of green coffee beans, while imports of instant coffee attract a duty of US$2.40 per kilogramme.

In 2019 the Salada Foods Jamaica paid out $56 million to JACRA in taxes imposed on green coffee beans. It is not clear how much the Government earns from coffee importers, but it would be safe to assume that our large hotels and international food distribution companies are paying large sums in import taxes to the Jamaican Government. Therefore, why wouldn’t the Government use this cess and provide a real stimulus annually to fund rebuilding the local coffee industry and increase the harvest to internationally competitive standards?

Furthermore, our go-to defence that “Jamaican coffee is a luxury brand which requires managing the supply” is an outdated excuse for inefficiency. The fact is the global market for personal luxury goods rose by 5 per cent between 2019 and 2021 ( The Wall Street Journal 2021). Shoppers under 40 accounted for more than 60 per cent of luxury purchases worldwide last year and will jump to 70 per cent by 2025 ( Reuters 2021). We must position our Blue Mountain Coffee amid other sophisticated luxury brands with an ongoing global advertising campaign similar to how we market our tourism industry using selected international celebrities with brand cache.

Blue Mountain Coffee should be seen on the pages of exclusive fashion and business magazines of London, Milan, Paris, and New York, while catering to the luxury shopper in China.

Nestle Nespresso offers an exclusive Jamaica Blue Mountain edition for US$2.00 per capsule of coffee (1.35 oz). “Get lost in the sip on the misty slopes of the Blue Mountains…” is how this premium brand is sold online. Let’s use this model or partner with Nestle to produce more capsules for specialty coffee shops worldwide.

In 2028, Jamaican coffee will celebrate its 300th anniversary. That’s five years, more than enough time to get Jamaican coffee right.

Lisa Hanna is Member of Parliament for St Ann South Eastern, People’s National Party spokesperson on foreign affairs and foreign trade, and a former Cabinet member.

Lisa Hanna

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