Coffee, Roasted
SIC 2095
NAICS 311920
Firms in the world's coffee industry roast, grind, and package coffee beans for retail and commercial sale. Coffee producers may also manufacture specialty coffees and instant coffees in various forms. For additional details on the growing of coffee beans, see Agricultural Production—Crops.
Coffee is the second most widely traded commodity in the world. The global coffee industry enjoyed significant growth through the early 1990s, but in the early 2000s, oversupply and waning demand contributed to market conditions that, according to the New York Times, plunged the industry into the most serious crisis in its history.
At the onset of the twenty-first century, the total global coffee retail trade was valued at US$33 billion. Global exports, according to an Observer report, were US$10 to US$12 billion per year in the 1990s, and retail sales of coffee contributed some US$30 billion to the world economy. But by 2003, coffee consumption was growing much more slowly than production. In a report from the Foreign Agricultural Service of the United States Department of Agriculture, world coffee consumption for the 2000-2001 crop year (which varies by region, but starts in April, July, or October) was estimated at 111.1 million bags (one bag equals 60 kilograms). But while production grew by about 3 percent, reaching 115 million bags in 2002 and 119.44 million bags in 2003, demand grew by only about 1 percent. As of early 2003, according to the New York Times, green coffee prices were at their lowest point since the early 1970s, and, adjusted for inflation, real prices were the lowest in one hundred years. The value of world coffee exports plummeted to only US$4.8 billion. Small and medium-sized producers were the hardest hit; the economies of many coffee-exporting nations were all but destroyed. Taking advantage of extremely deflated prices, roasters and distributors were able to reap hefty profits, with retail sales of coffee worldwide rising to more than US$70 billion in 2002. Niche marketing to consumers of gourmet coffees also enabled large companies to increase prices while keeping costs low.
Prices of the industry's raw material, green coffee beans, are highly volatile and influence the industry's financial performance. In general, when green coffee prices are high, coffee growing is more profitable, and conversely when prices are low, coffee roasters profit. (Relatively few coffee enterprises in the world integrate growing and roasting operations.)
In the early 2000s, four multinational companies accounted for the bulk of coffee sales, but the industry was characterized by intense competition. The global in-home coffee market was controlled by Nestlé SA with 22 percent and Kraft Foods (formerly Philip Morris, which continued to retain part ownership) with 14 percent. Sara Lee Coffee & Tea Worldwide accounted for 6 percent, edging out Proctor and Gamble, which captured 5 percent. More than one third of market share was controlled not by a single, large company but by smaller, specialized coffee roasters.
Two species of coffee historically have made up the vast majority of the world's commercial coffee: Coffea arabica and Coffea robusta. The output of the two main species is divided further by commercial classification due to varying processing methods, altitudes of growth, bean size, bean density, and age—all factors that impact flavor. The London-based International Coffee Organization categorizes the varieties as follows: Colombian milds, which made up 15 percent of the world's coffee production at the beginning of the 2000s; other milds (25 percent of world production); Brazilian and other arabicas (35 percent); and robustas (25 percent).
While arabica beans continued to command the largest market share through the 1990s and early 2000s, the demand for robusta beans increased following the introduction of commercially produced soluble—better known as instant—coffee. The robusta bean's ascendance was fueled by its higher yield of soluble extracts than arabicas during the processing for instant coffee; robustas are also considerably cheaper. According to Richard L. Lucier in The International Political Economy of Coffee, robustas rose from only 8 percent of world production in the late 1940s to nearly triple that in the 1970s. In the same period, soluble coffee's share of the world market went from almost zero to about 25 percent.
As the popularity of roasted coffee spread throughout the world, the methods of roasting beans changed. Europeans first roasted beans at home in their ovens. In the nineteenth century, equipment was developed that enabled people to roast larger quantities of coffee. The introduction of this equipment spurred the commercialization of coffee roasting.
Three main types of roasting equipment are used in commercial production. A batch roaster roasts beans in about 15 to 18 minutes, depending on the types of beans, by tumbling them in a drum that is blown with hot air. The beans are then cooled on a tray and mechanically stirred. Batch roasters can accommodate amounts ranging from less than a pound to more than 500 pounds of beans, and some batch roasters can run continuously. A fluid bed roaster roasts beans in 6 to 12 minutes. It operates much like a hot air popcorn popper, blowing air from the bottom of a stationary cylinder containing beans. Continuous roasters, first developed in the United States in 1940 by Jabez Burns, roast beans in about three minutes. Made of long cylinders with six-inch-wide compartments, continuous roasters turn like corkscrews. As the cylinder turns, the beans pass into different compartments that heat and then cool the beans. Continuous roasters can roast from 500 to 10,000 pounds of coffee per hour. Unlike other types of roasters, continuous roasters are most often monitored and controlled by computers.
Despite the differences in roasting equipment, each process obtains similar results. When green coffee beans are roasted, a series of chemical changes alters their weight, appearance, and taste. The International Coffee Organization estimated that 1.19 pounds of green coffee beans go into a pound of roast coffee. Sugars, oils, proteins, and minerals develop and change within the beans as they are subjected to heat. Coffee beans absorb heat relatively uniformly, and during the last few minutes of a roast, the beans make a popping noise as they enlarge and unfold. The popping noise indicates that the production stage known as the development of the roast is taking place.
Because the changes in the beans occur quickly, the roastmaster (the person in charge of roasting the coffee beans) must keep a careful eye on the batch to achieve the desired flavor in the beans. The roastmaster's goal is to roast the coffee beans to a color consistent from the inside to the outside of the bean as well as throughout the batch. In large commercial operations, computers determine when to end the roast using photometric reflectance instruments that measure the color of the roast as it relates to the temperature of the beans. There are myriad degrees of roast, but they can be simplified into four categories: light, medium, dark, and very dark. Each variation has a distinct flavor.
Blended coffee has long dominated the world roasted coffee market. Because different types of coffees contain varying amounts of taste, aroma, and body, coffee is often blended to create a unique product. Beans can be blended before they are roasted if they are of similar variety, but blending can also take place after the roasting process if the beans in question require different roasting criteria. Coffees are blended to suit different tastes. For example, in Japan mild coffees, such as those from Peru, are most popular, while in Germany, coffee drinkers are more likely to prefer full-bodied blends, such as those from Honduras.
Though large commercial roasters blend coffee beans to achieve a consistently flavored drink, specialty coffee roasters blend coffee beans to make uniquely flavored coffee. Some coffees are sold as varietals—coffee beans from a particular country of origin that have been roasted alone. But blended coffee has usually been marketed without mention of the types of coffee beans contained within the blend. Many coffee blends are sold by emphasizing company brand names, rather than coffee species or country of origin.
Instant coffee is the extracted form of roasted, ground coffee. It is made by blending and roasting beans in the same way as regular coffee, although the end product is generally of a coarser quality. The ground coffee is then fed into industrial percolators, which have hot water pumped into them to make a concentrated coffee extract. The coffee's coarser grind keeps excessive pressures from developing in the percolator's hydraulic system.
Once the solubles have been extracted, they are dried into a...
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