Analyze the coffee value chain. Who earns the most in a cup of coffee? Coffee farmers earn less than 1%?

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With coffee becoming more and more popular with consumers, it would be better to become a coffee farmer at present. However, Arabica coffee beans cost just over $1 a pound on the New York Intercontinental Exchange (ICE), less than half what they were five years ago.

The low price of coffee beans has led many coffee farmers to switch to illegal crops such as cocaine, while adding to doubts about the stable supply of coffee beans in the future. if the supply is unstable, consumers will eventually bear the cost.

● Why do coffee farmers still frown while the price of coffee continues to rise?

Consumers may think that higher coffee prices will allow coffee farmers to reap at least some of the profits. But for a cup of coffee worth 2.50 (RMB 20), for example, the cost of coffee itself is only 4 per cent (equivalent to 10p), while rental, labour and tax expenses account for 75 per cent, according to research firm Allegra Strategies.

What does the value chain of ● coffee beans look like?

After the coffee farmers harvest the coffee beans, the processors will clean, peel, dry and prepare for export. These bagged raw beans come to the baker through middlemen such as importers, traders, and exporters. According to the 2012 International Trade Center (ITC) coffee export guidelines, 80% of wholesale coffee prices eventually go to roasters, while coffee farmers get just over 10%, equivalent to about 1p for a 2.50 euro cup of coffee.

●, who makes the most profit in the coffee value chain?

In the case of a cup of coffee, coffee shops and retailers make the most profits, while in the process of wholesale, roasters are the biggest beneficiaries.

But experts believe that roasters need to invest a lot of time and money to turn raw coffee beans into mellow drinks in order to find a baking method that suits consumers' taste buds. Banwell, head of Diedrich Roaster's European operations, believes that a qualified roaster needs to have experience in buying all kinds of coffee beans and visiting coffee farms, as well as being able to taste and understand coffee in a consistent and objective manner. They must have the ability to roast coffee accurately and professionally.

●, who is the big baker?

Nestle and big retailers such as Starbucks have always made money by baking coffee, but now small coffee chains are also starting to bake their own beans.

In order to seize the huge business opportunities of the coffee boom, there has been a wave of consolidation in the coffee industry, and the big names in the industry have consolidated their position by acquiring small coffee roasters and chain stores. According to reports from non-governmental organizations, the top 10 roasters in the world (including Nestl é, JAB, Lavazza, etc.) account for about 35% of the coffee market.

●, why is a cup of coffee so expensive?

"most consumers are paying for space, coffee brewing technology and brand value," said Sherford, global head of food and beverages at EI. Starbucks is positioned as boutique coffee in some markets, so it is located in prime locations in big cities, and the economic base of its consumer base is also higher than that of the general public.

Source: economic Daily

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