Starbucks of Condado Concepción, located on the road to El Salvador, Guatemala, is a sales point that at a distance of 15 minutes by car, has a potential market of more than 150 thousand consumers, and of this group of people 43% are interested in coffee.
Using the Geomarketing solutions we have developed for our clients, CentralAmericaData's Trade Intelligence team analyzed the environment of some of the main coffee shop locations in Central America. Below is an extract of the study's findings.
Due to the reduction in office work and the increase in teleworking, Costa Rican toasters estimate that the local market demand for the beverage has contracted between 15% and 20%, when compared to sales levels prior to the beginning of the health crisis.
With the spread of covid-19 several companies and public institutions, which were able to accommodate their employees' work in the form of teleworking, stopped buying coffee for consumption in the offices.
For the 2019-2020 crop, production is estimated at 1.91 million quintals, about 12% more than in the previous cycle, partly due to the renewal of some coffee plantations.
The Coffee Institute of Costa Rica (Icafé) forecasts that coffee production will increase by 196,760 sacks of 46 kilograms of processed beans, from 1,717,659 quintals reported in the 2018-2019 cycle to 1,914,419 projected for the 2019-2020 harvest.
The launch in the local market of 10 different products of roasted and ground coffee and in capsules of the Starbucks brand, reflects the increase of competition in the segment of premium coffees, which already represents about 4% of total consumption in the country.
The products that will be marketed initially in the chains of Walmart and Másxmenos supermarkets, are distributed by Nestlé, which bought the retail distribution of these Starbucks products globally.
Walmart will market high quality coffee in Costa Rica under the brand Great Value, owned by the supermarket chain, a product that will be manufactured with beans from Tres Rios, Naranjo and Tarrazú.
Representatives of the company informed that Great Value is offered in supermarkets of the formats Walmart and Masxmenos, in presentations of light and dark roast of 340 grams ground and in grain.
Although the U.S. is the main buyer of Guatemalan coffee, data from the exporters' guild indicate that South Korea is one of the markets that pays the best prices for the grain, while Italy pays one of the lowest prices.
#Although the main buyer of Guatemalan coffee is the United States, there are indications that Asian countries tend to appreciate Guatemalan coffee more, paying a higher price for it, notes the report "Guatemalan Coffee: A Focus on the World Market and Its Productivity.
Because of the low grain prices reported in 2018, it is estimated that there could be a reduction in supply, which would lead to a rebound in prices this year.
On average, the pound price of grain was close to $1.15 during 2018, however, global businessmen forecast that for this year the price could rise to $1.24 per pound.
During the first six months of the year, coffee exports from Central American countries totaled $1,948 million, 9% less than what was reported in the same period in 2017.
Figures from the information system on the coffee market in Central America complied by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
Although consumption has remained stable in recent years, the Costa Rican market now demands greater quality and variety in preparation methods.
According to figures from the Chamber of Coffee Roasters, per capita demand in the country is around four kilograms of coffee beans per year, which is equivalent to two cups of coffee per person per day.
José Manuel Hernando, president of the roasters guild, explained to Nacion.com that "...
Between the 2011-2012 and 2016-2017 harvests, the difference between the average price per quintal of the country's exports and the international market price of grain has more than doubled, from $25 to $54.
According to Investing.com data and figures provided by the Coffee Institute of Costa Rica (Icafe), during coffee year 2011-2012 the average value of a 46 kg bag of coffee on the New York Market was $198.12 and the average price of Costa Rican exports was $222.76, reflecting a difference of $24.64.
In the last six years the average export price of Central American coffee has been trending downwards, with the price per kilo falling from $4.51 in March 2012, to $3.10 in the same month in 2018.
Figures from the information system on the Coffee Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
Due to the climatic conditions predicted for the months of July and August, an increase is expected in the presence of the disease in coffee plantations in Costa Rica.
During July there is a typical decrease in rainfall known as "la canícula", a period in which Rust progresses slowly and the emergence of new lesions is less.However, at the same time there is a greater presence of spores in the lesiones favored by the warmer temperature and by weaker and less frequent rains.This situation will promote a largeincrease in the disease in the majority of the Costa Rican coffee plantations when more abundant rains return starting in August, reported the Coffee Institute of Costa Rica (Icafé).
The lot that this year was best quoted in the international electronic auction reached $30 thousand per hundredweight, and the grain comes from the canton of Dota, Los Santos zone, Costa Rica.
The high quality coffee that received the best quote in the international electronic auction in the Cup of Excellence contest is from the Don Cayito farm, with a price of $30,009 per hundredweight.
Last year coffee sales in Central American countries totaled $3.035 million and grew by 27% compared to 2016, in contrast to the fall recorded between 2015 and 2016.
Figures from the information system on the Coffee Marketin Central America, compiled by the Business Intelligence Unit at CentralAmericaData : [GRAFICA caption = "Click to interact with graph"]
In Costa Rica, a new bill has been presented to grant resources at a preferential rate to producers, aimed particularly at the smaller ones.
According to the bill, which received a positive ruling in committee and now must go to the Plenary, the fund will be financed by a contribution of 5% from the liquid surplus of the Coffee Institute of Costa Rica (Icafé), resources from the Ministry of Agriculture and Livestock and funds recovered from the Trust Fund for Coffee Producers Affected by Rust and the Coffee Plantation Renewal Plan.