Category: News

It’s estimated that around 90% of global goods are transported by sea at some point. Over half of these goods – including, fruit, vegetables, and coffee – are shipped in large stainless steel containers on cargo ships.

Market analysts predicted that approximately 5.2 million containers (otherwise referred to as twenty-foot equivalent units, or TEUS) would be manufactured in 2021. However, in spite of this, there have been mounting reports of container shortages since the beginning of the year.

These shortages don’t just lead to lost or delayed shipments, however; they also cause freight prices to soar because of increasing competition for container space. But how does this affect the coffee sector?

To learn more, I spoke to Sam MacCuaig, a trader at Keynote Coffee in Bristol, UK and a Perfect Daily Grind contributor. He provided us with some insights as to how the freight crisis is disrupting the coffee supply chain. Read on to learn more.

SHIPPING CONTAINER SHORTAGES & THE PANDEMIC

The pandemic has had a devastating impact on global trade. There are reports that over 97,000 businesses in the US have permanently closed due to the economic challenges of the past two years.

When stay-at-home orders forced businesses to temporarily cease operating and consumers to remain indoors, both supply and demand fell dramatically.

“Thanks to Covid-19, the freight industry collapsed and shipping companies reduced their capacities,” Sam explains.

“Let’s say that you needed a million units of shipping capacity prior to Covid-19. At the start of the pandemic, everything closed down, so global capacity shifted to around half of the demand, which would be 500,000 units.”

However, with global vaccination rollouts bolstering economic growth, both supply and demand are steadily increasing to near pre-pandemic levels.

Sam tells me: “When the economy bounced back from Covid-19, businesses needed to replenish stocks that they allowed to run down.

“They haven’t been stocking the inventory or shipping anything because industries halted, so they reduced their inventories,” he states. “Now that supply chains are moving again, they need to order three times as much as they normally would to build up their stock levels.”

This has resulted in significantly more competition for container space on cargo ships. Stronger demand means there is less available space on the ships, as well as fewer containers themselves.

HOW DOES THIS AFFECT GLOBAL INDUSTRY?

Shipping delays have a range of devastating effects on global supply chains – including in the coffee sector.

In late March 2021, a 400 metre-long cargo ship by the name of Ever Given blocked the Suez Canal for almost a week. It was carrying some 18,300 containers at the time. However, its unintentional blockade also delayed the movement of 369 other ships, which were unable to pass through the canal.

Around 12% of global trade passes along the Suez Canal each day. This led experts to estimate that businesses operating via the canal were collectively losing up to US $15 million per day because of the blockage.

The combination of increasing shipping demand and reduced freight capacity has resulted in numerous reports of shipment delays and bottlenecks.

In the US, it is estimated that 4 out of 10 shipping containers enter the country via two ports in California, before being distributed across the country.

The BBC reported that in September 2021, some 73 ships were waiting to unload in Los Angeles – one of the highest waiting figures ever recorded. The article goes on to add that before the pandemic, no more than one ship would typically be waiting to unload at any given time.

Sam explains that because social distancing measures forced ports to close, significant delays are now not uncommon.

“It can take up to two weeks longer to unload a ship and to get haulage out of the port,” he says. “In Brazil, you would normally be able to get a booking on a ship within a week. Now it takes a minimum of six weeks.”

There are also continuous reports of empty containers stockpiling at ports in some countries.

“It’s more cost-effective for companies to send empty containers back to Asia to fill up with goods and send them back than it is to just do the normal route,” he says. “As a result, the containers aren’t where people need them to be.”

WHY DOES THIS LEAD TO HIGHER PRICES?

Coffee prices hit a seven-year high in July and October this year. Just a few weeks ago, they topped that to hit the highest price since 2012.

This actually began earlier in the year with a sudden frost in major coffee-producing regions of Brazil, the world’s largest coffee producer. In Brazil, temperatures dropped as low as -1.2°C (29°F) in July – causing irreversible damage to coffee plants which could affect the global supply for years to come.

Estimates of the losses range from 2.5 to 5.5 million bags, a significant volume for the global market. This, alongside the forecasted long-term impact, resulted in prices closing above US $2/lb at the end of July 2021.

However, these extreme weather events are compounded by logistical issues and container shortages, which have also affected the frequency of exports. According to the Brazilian exports association, Cecafé, the country’s coffee production in May 2021 fell by 20%.

The most expensive routes are the ones that are the most in demand: generally from Asia or increasingly Brazil,” Sam explains.

Bloomberg reported in July that the price of a single shipping container travelling from Brazil to the US had hit figures around US $4,000. In contrast, before the pandemic, one container would cost around US $2,000.

Other reports suggest that containers travelling from Shanghai to the Netherlands were being sold for US $10,000 – more than a 540% increase.

“Essentially, companies are hiking up prices,” Sam explains. “They’re prioritising the lines where they receive the most cash. It’s a bidding war.

“It means that shipping lines often roll over on contracts. You might have a booking for a container to leave Brazil at a certain date, but if another company comes along and offers an extra US $2,000 per container, your shipment will just be pushed back.”

HOW DOES THIS AFFECT THE WIDER COFFEE SUPPLY CHAIN?

Those buying and importing coffee in major consuming countries are among those directly affected by these rising freight costs.

“Ultimately, the price has to get passed along the supply chain,” Sam says. “The roaster pays in the end.”

However, consumers also have to be prepared for increased costs. A recent article by Reuters said that consumer prices may not increase at large chains, such as Starbucks, but prices of supermarket coffee may start to rise if logistical problems persist.

This is because large-scale chains tend to buy coffee much further in advance, which means their stocks are less likely to run out in the short term. However, for smaller specialty coffee roasters with less of a capacity for logistics, this is shaping up to be a serious concern.

According to Bloomberg, reports in March 2021 indicated that US coffee stockpiles had reached six-year lows in the face of rising demand.

However, it’s not just major consuming countries that are feeling the impact. Sam says that container shortages and delays are also preventing producers from shipping coffee and receiving payment.

“If these logistics issues do prove to be long-term problems, it’s going to put price pressure on at origin level as well,” he says. “This is because it’s another variable to control through risk management.

“For instance, in Vietnam, there are cheap coffee offers with plenty of demand, but spots are expensive. Their coffee is massively in demand, but producers are struggling to sell it.”

WHAT ARE THE LONG-TERM IMPLICATIONS?

This freight crisis isn’t expected to end anytime soon, with market analysts anticipating that shipping prices will remain high throughout 2022.

In the long term, delays will reduce coffee quality, which could have a serious impact for specialty coffee.

“It’s problematic for the specialty coffee supply chain because the green coffee needs to stay fresh,” Sam explains. “The longer it takes to get coffee out of the country, the more concern there will be about maintaining quality.”

In general, green coffee can stay fresh for up to a year, but roasters should ideally receive green coffee within a few months to maximise freshness.

Sam adds that if shipping problems persist, larger coffee companies will also start to feel more of the financial repercussions.

“Logistics issues present a real problem for commercial coffee traders. The more commercial your coffee business is, the more problematic logistics issues are, because margins are slimmer.”

He adds that the uncertainty surrounding when shipments will arrive may also drastically affect stock levels, and lead to more spot buying (where roasters purchase coffee with no prior commitments).

“You can’t plan for the timings of shipments, which is a real issue for consistency. If you’re a medium-sized specialty coffee roaster, you might plan to have one shipment arrive in December, one in May, and one in September, spread out evenly through the year.

“But if you’re not holding enough inventory to cover your stock for another three or four months while you wait for coffee to arrive, you will have to spot buy coffee.”

At scale, spot buying can be disadvantageous for both roasters and producers. Spot coffee tends to be less fresh, but costs more. Furthermore, without contractual agreements, farmers are in a weaker position. For a financially sustainable coffee industry, the stability provided by prearranged contracts is key.

These ever-growing logistics problems are a concern for the coffee industry, but there are ways for the entire supply chain to handle them effectively.

Continuous communication from everyone across the supply chain is essential. It’s more difficult than ever to provide a timescale for your customers, but constant updates go a long way towards maintaining healthy trade relationships.

While it seems that these container shortages and shipping delays will be persistent for another few months at least, staying as prepared as possible will help the coffee industry remain resilient and adaptable across the board.

More than 80 states grow coffee trees. Coffee varieties are classified according to different parameters: the quality and type of grains, the type of fruit processing or the degree of roasting. Arabica grows on 75% of the plantations, the rest of the fields are occupied by robusta. South America remains the leader in the export of coffee beans, the second and third places belong to Asia and Europe.

Historical information

The history of coffee began in the X century. in the Kaffa region in Ethiopia. At first, the ground fruits were prepared, later they learned to fry and grind them. The trees were taken from Ethiopia to the Arabian Peninsula. In the XV century, Turkey became the main exporter of coffee beans.

The fruits came to Europe at the end of the XVI century. thanks to the Venetian merchants. In the XVIII century. European sailors brought grain to South, Central America, Asia.

The world’s main suppliers of coffee products

In 2019, more than 130 million bags of harvest (60 kg each) were collected on the territory of 50 coffee-producing countries. The main suppliers of products were the following states (million bags):

Brazil (35.5);

Vietnam (27.9);

Colombia (13.5);

Indonesia (8,3);

Honduras (7,1).

Ethiopia is among the top ten major exporters in the world, with a market share of 4% (up to 4 million bags).

Most of the arabica grows here in the wild. The most elite varieties of coffee are considered to be Sidamo, Harar and Yirgacheffe.

• Classification of coffee, what is it

Coffee is classified according to the type of tree, the type and hardness of the grains, the method of processing, the country of growth, the degree of roasting. The marks that indicate these parameters are always applied to the packaging of products.

By type of coffee tree

There are such basic types of coffee trees:

Arabica. Her homeland is Ethiopia, Yemen. Trees with red or red-purple fruits grow up to 5 m. The highlands (900-2100 m above sea level) are suitable for plantations. The light brown grains are shaped like an oval up to 1.5 cm long. Arabica does not tolerate cold well and is susceptible to diseases.

Robusta. Congolese coffee can be distinguished from Arabica by photos. Trees that reach 10 m in height are grown at a height of up to 900 m. The beans have a round shape with a dark red shell.

Liberica. On tall trees (up to 20 m), oval fruits up to 2.5 cm long appear. Due to the weak taste, it does not represent much industrial value.

Arabica has a sweet taste. Robusta is characterized by bitterness due to the increased caffeine content (2.7%).

By type of coffee beans

There are large, medium, and small grains in size, but different countries have their own labeling. Indonesian manufacturers use the letters L, M, S. In Africa, they mark AAA (large), AA (medium), AB (small). Depending on the hardness of the grains , the following marking is adopted:

SHB – arabica of the highest degree of hardness, growing at an altitude of 1400 m above sea level;

HB – hard grains from plantations at an altitude of 1200-1400 m;

MHB – fruits with medium hardness, growing on the plain;

LGA – soft grains that are used for low-quality coffee.

Elite Arabica has the highest hardness.

• According to the method of processing coffee beans

After harvesting, the fruits are subjected to dry or wet processing. In the first case, the grains are washed, left to dry for 3 weeks. Then they are cleaned and screened to remove the remnants of the peel. Wet processing involves placing the grains in water for 24 hours. There is a primary fermentation of fruits, so they become softer. After washing, the grains are cleaned using machines.

• By grain quality

The labeling differs in different regions. The letters A, B, and C are often used, which correspond to high, medium, and low quality. Some manufacturers have such a designation:

AA is the best grade;

AV is good;

WA – medium quality coffee;

BB is a low-quality product.

EP (European preparation) means that up to 8 defects were removed from 300 g of coffee.

AP (American) implies the removal of up to 23 defects from a similar quantity of goods.

According to the degree of freshness

There are 2 varieties of coffee beans. New crop means packaging immediately after harvesting and processing, old crop — last year’s harvest. The mature label is placed on coffee that has been stored in a warehouse for 1 to 3 years. For more aged varieties (6-10 years), the designation vintage/aged coffee is used.

By fortress

The strength is influenced by the variety, grinding, roasting and brewing method. The following types of strong coffee are distinguished depending on the concentration of caffeine (mg/ml):

espresso – 2;

in Turkish – 0.8;

filter coffee – 0.6;

americano, cappuccino – 0.4.

Sometimes the strongest is called ristretto – black coffee made in a coffee machine.

This drink has a richer taste due to the presence of essential oils, but contains less caffeine than espresso.

According to the degree of roasting

According to the intensity of heat treatment , there are such degrees of roasting:

Easy. The process lasts until the first click. The grains become dry, acquire a light brown color.

Average. The beans turn out darker.

Strong. The grains turn dark brown, their caramelization occurs.

The highest degree. The fruits are glossy due to the essential oil, acquire a black-brown color.

Light processing is suitable for high-altitude varieties with a loose structure. Strong is used to make coffee from Cuba, Guatemala, Africa.

By country of production

South American varieties have a mild flavor with medium saturation. Grains from Ethiopia, Burundi, Zambia, Uganda are famous for their strength. In the Congo, robusta is grown with a tart taste, and Kenyan Arabica has a mild aftertaste.

There are plantations of classical Arabica in Yemen. In Vietnam, robusta with a pronounced cloying aroma is common.

Rating of coffee producers

The list of the largest producers of grain and ground coffee includes the following companies:

Lavazza.

Paulig.

Kimbo.

Malongo.

Jardin coffee is popular. The company receives Arabica from Kenya, Ethiopia, Indonesia, Colombia, Guatemala.

The best coffee varieties

South America, Ethiopia and Yemen are considered to be the producers of the best products. Most of the plantations are located at an altitude of 1000 m above sea level, so the grains get an unusual taste and rich aroma.

Brazilian Bourbon Santos

It was named after the island of the same name in the Caribbean Sea. For him, the first 3 harvests are harvested from trees. Coffee turns out to be oily with sourness. The drink has a rich taste with a nutty chocolate smell and notes of orange.

Maragojip

A distinctive feature is large grains, which are 3.5 times larger than standard Arabica. This drink has a complex taste: spicy with an admixture of wood, wild berries, nougat, flowers. There is always a sourness, the aroma includes tobacco notes.

Medellin

The Colombian variety grows at an altitude of 1800 m above sea level. The grains are lightly roasted to preserve a soft wine-fruit sourness with a caramel aftertaste. The description of the smell is dominated by a light nutty aroma.

Colombia Excelso

Coffee plantations are located at an altitude of 900-1800 m in the Cordillera mountains. Columbia Excelso grains are medium-sized, have a dense structure with a light fruity sourness and sweetness. The fragrance includes citrus or nutty notes.

Maracaibo

The photo of this Venezuelan variety shows the main difference from other types – yellow grains. Maracaibo with a slight taste of dry white wine grows in the states of Trujillo, Tachira, Merida. The low quality of raw materials is compensated by the grape aroma.

Costa Rica

This coffee is considered elite. It has a spicy aroma and high strength. It has a multifaceted taste: cocoa is combined with fruity, vanilla, honey notes.

Decaf

Decaffeinated coffee is produced by treating green beans with a solvent, steam, activated carbon or liquid carbon dioxide. This drink is more acidic and mild compared to the others. In Russia, decaf has blue or green packaging, abroad — orange.

Supremo

For such coffee, the highest quality grains with a length of more than 7 mm are selected. The variety is grown on the northern slopes of the Cordillera in Colombia. There is almost no acid in it, but chocolate feels good. The aftertaste contains apple-almond notes.

Dalat

This Arabica variety grows in the central part of Vietnam at an altitude of 1400-1600 m above sea level. Dalat is a strong coffee with fruity, caramel, nutty shades. The fragrance includes notes of rosehip, lemongrass, orange.

Altura

Coffee beans are grown in the Cuban region of Sierra Maestra at an altitude of 600-800 m. There is little acid in the variety, but it is strong. The drink is famous for its bitterness, which is combined with a tobacco flavor. The aroma is sweet, tart with an almond-caramel tint.

Antigua

Elite coffee from Guatemala has a dense texture with a slight sourness and sweetness. When describing Antigua, attention is paid to a thick, spicy aroma with notes of smoke. The drink feels like cocoa, prunes, fruits.

Oksana

The plantations are located in the southern states of Mexico. The Oxaca variety stands out with a light consistency, a slight bitterness, and a subtle aroma. Depending on the degree of roasting, the taste of caramel, maple syrup, vanilla or hazelnuts appears.

Antigua and Coban

If the Antigua variety is characterized by the aroma of fruits and prunes, then light floral notes predominate in Cobano coffee from Guatemala. It is strong with a slight sourness, has a rich nutty taste. Grains are more expensive due to complex care.

El Salvador Chalatenango

Arabica grows on the Los Plains plain (altitude more than 1500 m above sea level). The drink of this variety has a thick structure with sweetness. At first, almonds are felt, later a floral aftertaste appears.

Ethiopia Sidamo Mocha

Premium coffee plantations are located on the plateau of Sidamo province (southwest Ethiopia). The drink has a velvety texture with a rich fruity sourness. The taste is dark chocolate, nuts, cinnamon, cardamom. The aftertaste resembles jasmine. The aroma is dominated by chocolate, wine notes with an admixture of blackberries, apples.

Yemen Mocha

Yemeni coffee is grown on high-altitude plantations (above 1000 m above sea level). With strong roasting, the taste of cocoa with spices appears, with weak – citrus. The aroma is dominated by fruity notes.

Elite coffee varieties

The list of elite includes the following types:

Jamaica Blue Mountain. It combines notes of tobacco, caramel, pepper, flowers.

Old Java. Grains are stored in bags from 2 to 6 years to get a rich taste and aroma.

Kopi Luwak. The peculiarity of the production is the fermentation of beans in the stomach of the luwak.

Kenya Ruiruiru (Kenya AA Ruiruiru). The drink has a cherry flavor with a tobacco aftertaste.

Yellow bourbon. Brazilian grains give a taste of chocolate, peanuts, almonds, and the aftertaste is tobacco with earthy notes.

The premium class includes soft Australian Skyberry and exotic Ecuador Vilkabamba.

Organic coffee

It is grown and processed without pesticides, chemical fertilizers, growth activators. Organic products do not differ in taste characteristics from standard types. This group includes varieties San Cristobal (Galapagos Islands), Kona (Hawaii), Tapachula (Mexico), Kilimanjaro (Tanzania).

Coffee Drink Recipes

Coffee beans of varying degrees of roasting are mixed with milk, alcohol, cold water, honey, spices. As a result, new types of drinks are obtained.

Espresso

A strong drink was invented in Italy at the beginning of the XX century . For a classic espresso, you will need 2 ingredients:

7 g of medium ground coffee;

30 ml of cold water.

The drink is prepared in a coffee machine or manually with the help of a Turkey. In the latter case, the raw materials need to be filled with water, put on medium heat.

It is necessary to wait until the foam appears. In the coffee machine, water is passed through the grains for 25 seconds.

Romano

This is espresso with lemon juice. For 30 ml of the drink — 5 ml of fresh lemon juice. For decoration, you can use the zest.

Ristretto

The drink is considered a subspecies of espresso, but differs from the latter by a smaller volume and amount of caffeine. It includes the following ingredients:

7 g freshly ground coffee;

15 ml of water.

Ristretto is prepared only in a coffee machine. Coffee is poured into the holder horn, pressed with tempera. Then they turn on the water spill for 20 seconds. A dense foam of uniform brown color forms on the surface.

Mocha

Classic mocha consists of the following components:

1 tsp coffee beans;

50 mg of dark chocolate;

50 ml of milk (3.2% fat content).

It is necessary to brew espresso. Melt the chocolate on the stove, pour it into a tall glass. Then add the warmed milk and coffee. Decorate the top with whipped cream.

Latte

The peculiarity of the drink is foam up to 1 cm thick. According to the classic recipe, whipped milk (180 ml) is poured into coffee (50 – 60 ml). For lattes, medium or fine grains are used.

Macchiato

The picture shows the distinctive feature of macchiato – lush foam. To prepare a drink, 15 ml of chilled milk is whipped. Then it is poured in a thin stream into a portion of espresso. You can add sugar, caramel syrup, cinnamon.

Cappuccino

The Italian drink is a mixture of a double portion of black coffee (60 ml) with the same amount of milk. Previously, it is whipped with a cappuccino machine until it is increased by 2 times and gently added to the invigorating drink, holding the foam.

Viennese coffee

The traditional recipe includes the following ingredients:

30 g ground coffee;

225 ml of water;

115 ml of milk.

Espresso is prepared in the Turk, left to cool for 10 minutes. Milk is heated to 70 ° C, whipped with a mixer until a thick foam is obtained. Mixed with coffee. Foam is added on top.

Irish

An obligatory part of such a drink is alcohol. It includes the following components:

80 ml black coffee;

30 ml of whipped cream (20-30% fat content);

40 ml of Irish whiskey (Baileys liqueur);

1 tsp sugar.

The drink is poured into a tall glass with a handle. Sugar and warm alcohol are added to the liquid. Gently introduce a thin stream of whipped cream.

Americano

When preparing it, a portion of espresso (30 ml) is diluted with hot water (from 90 to 400 ml) in a large glass. Such a drink turns out to be weak due to the low concentration of caffeine. Fine or medium-sized grains are suitable for Americano.

Frappe

The following ingredients are needed for frappe:

1-2 tsp of instant coffee and sugar;

100 ml of cold water;

ice cubes.

In a container, mix coffee with sugar, pour 2 tablespoons of water. Shake everything up with a shaker. Put ice on the bottom of the glass, pour the finished coffee foam on top. Then add the rest of the water.

Glace

To prepare the drink, you will need 150 ml of coffee and 50 g of ice cream, which is spread on top. It is allowed to use rum, cognac or other alcohol. You can add vanilla, cinnamon, grated chocolate.

Honey raf

The recipe of the drink includes the following components:

50 ml black coffee;

100 ml cream (15% fat content);

1 tsp light honey.

In the brewed coffee, dissolve the remaining elements. Beat the resulting mixture and pour it into a glass glass. Sprinkle cinnamon on top.

Torre

An Italian cocktail is made on the basis of 30 ml of milk and 150 ml of coffee. The first component is whipped until a dense foam is obtained. Sugar is added to the finished coffee, poured into a tall glass. Spread milk foam on top, sprinkle with cinnamon.

Differences and similarities of coffee drinks

The basis of most coffee drinks is espresso. The difference between them is the volume, the number of additional components, the sequence of actions. Latte and macchiato include the same ingredients. However, due to the differences in the methods of preparation, the taste of the drinks is different. If you add less water, you will get a ristretto instead of espresso.

Additional questions and answers

About 1.6 billion cups of invigorating drink are consumed daily in the world. Therefore, it is useful to learn some interesting facts about coffee.

How new varieties of coffee appear

To obtain new coffee trees, 2 methods are used — cuttings and seed planting. In the first case, you can cross 2 species to get a hybrid. Cuttings quickly take root, so they can bear fruit in the first season after planting. Seeds take 6 weeks to germinate. With the second method, you need to wait about 5-6 years to get the first harvest.

How many varieties of coffee are there in total

From 2 to 3 thousand varieties are cultivated in the world. Most of them are located in Ethiopia, where some of the trees grow in the wild. Only about 12 varieties are grown in other regions.

What is the most popular type of coffee

The most common is Bourbon Santos from Brazil. Residents of North, South America and Scandinavia drink weak Americano or moccachino. Muslims make black coffee with spices. Asians love coffee cocktails with ice cream, fruit. The Greeks prefer frappe, the Italians prefer Romano. In Western Europe, they love espresso.

What kind of coffee is the strongest

Robusta has an increased strength, because it has a lot of caffeine. The mixture with the name Death Wish Coffee consists of grains imported from Indonesia, Vietnam. The alkaloid content is 1.5-2 times higher than normal.

What is the most expensive type of coffee

The most expensive is considered to be Black Ivory (Thailand). The whole small crop is exported, so they ask for $ 1000 for 1 kg. A cup of drink costs at least $ 50. A feature of the production is the fermentation of grains in the stomach of elephants.

What kind of coffee is the most delicious

The choice depends on individual preferences. Most people love Colombia Supremo for its softness and interesting taste. Connoisseurs of strong coffee will like Dalat. Lovers of the exotic will suit spicy Puerto Rico with a fruity aftertaste.