Ethiopia Coffee Market – Industry Analysis, Forecasts and Opportunity Assessment (2016-2023)

Report on Ethiopia Coffee Market – Industry Analysis, Forecasts and Opportunity Assessment (2016-2023)

Introduction to Ethiopia Coffee Market

Coffee is one of the most popular beverages, which is consumed worldwide. It is prepared from the Coffee beans that are from the plants of Coffea genus. It is produced worldwide in as many as 70 countries with the largest producers coming from South America, Asia, and Africa [1].

In Africa, the largest producer of Coffee is Ethiopia. Coffea Arabica, which is the plant that accounts for 75-80% coffee production of the world is native to Ethiopia [2]. Coffee cultivations form the backbone of the Ethiopian market as more than 15 million people are directly or indirectly depend upon coffee production for their livelihood. Coffee Production in Ethiopia accounts for 3% of the total Global Coffee Market [3].

End Users

Ethiopia exports a large amount of coffee abroad. Around 60% of foreign money comes due to coffee exports [4]. Ethiopian people too consume a large amount of coffee. Ethiopia is one of the largest producers of coffee, 7th largest in the world to be exact. Chief importers of Ethiopian Coffee are EU, North America, and Asia.

Market Dynamics

Some of the Factors that directly or indirectly affect Coffee market of Ethiopia are-

  • Popularity of Coffee as a beverage and growing demand of Coffee across different countries is a factor that affects the Coffee production of Ethiopia. The Global Coffee Market is growing at a CAGR of 5.5% according to “Global Coffee Market – Growth, Trends and Forecasts (2017 – 2022)” [5] report published by Research and Markets and this acts as an important stimulus.
  • One of the important factors driving the demand for coffee is the Millennial Population. In the US alone the millennials account for around 44% of the Coffee consumption [source: Washington Post].
  • Ethiopian Coffee Exports face direct competition from the likes of Brazil, India, Vietnam, Columbia etc. However, the climatic conditions and the diseases have plagued the coffee production in Brazil and this coupled with the growing Coffee, demand has opened up new markets for Ethiopian Coffee exports.
  • Good climatic conditions is another important parameter that positively affects the quality of Ethiopian Coffee. Ethiopian environment is perfect to grow coffee and hence it does not need to be augmented by fertilizers. The lush green vegetation and deep soil, elevated mountainous regions make for great conditions to grow coffee.
  • Domestically the competition comes from a plant named Khat, which is competing against the Coffee for land. As Khat offers better yield to the farmers, the inclination towards growing Khat is increasing [6].
  • Apart from these, the Government policies also affect the production, supply, and export of Coffee. Initially, to integrate the international and domestic Coffee Prices, exports were made throughEthiopia Commodity Exchange (ECX), but now to give more liberty to local private players this has been deregulated.

 

 

Market Segments

Ethiopia Coffee market segmentation can be done based on the coffee beans used, how they are made, who consumes them [source: usda.gov].

  • Coffee Export market of Ethiopia is largely dominated by Germany, which imports more than 25% of the total export of coffee in Ethiopia. Germany is followed by Saudi Arabia, which imports approximately 14% of the total coffee. Japan is third at 12%, followed by Belgium (8%), USA (7%), France (5%). Sudan, Italy, Republic of Korea, Sweden and UK are other importers (all these exports by Ethiopia stand in between 2-5%).
  • Ethiopian Coffee can be segmented as Unwashed/Sundried (70-80%) and washed (20-30%)

Markets like Japan prefer Unwashed Coffee, for its rich taster. Whereas washed Coffee has a “cleaner image” and commands a premium price compared to Unwashed Coffee and is preferred in markets such as the US.

  • Ethiopian Coffee Market can also be segmented based on the different transaction chains that it witnesses. The first is a primary level where farmers and suppliers trade coffees. In the second level, the transaction is done on the ECX Addis Ababa floor where transactions happen in open outcry systems. The third level is that of Coffee exports to different countries.
  • Coffee export market can also be segmented based on who owns them. In Ethiopia, private players own approximately 93% of the total coffee export, 5% total export is owned by farmers’ cooperative unions and the remaining by Government entities.
  • Coffee is sold either as a commodity under the Ethiopia Commodity Exchange (ECX) or as independently as organic coffee. ECX coffee does not command a premium price. Whereas the Coffee that is not sold under ECX is seen as organic coffee that commands a relatively premium price.
  • Coffee in Ethiopia can also be categorized based on which variant of Coffea Arabica they have been brewed from. There are three variants mainly; Longberry, which offer the highest quality of flavor and value. Shortberry, which originates in Eastern Ethiopia and the Mocha, which is a highly prized commodity. [7]

 

 

 Key Players

Key Coffee players in Ethiopia include Tomoca which is a company based in Addis Ababa. Apart from Tomoca, there is Moyee Coffee, which is fast becoming the first coffee MNC based out of Ethiopia. Cerelia Coffee, Garden of Coffee and Abyssinia Coffee are major players too.

Report Contents

This Report contains comprehensive analysis on:

  • Ethiopia Coffee Market Segments
  • Ethiopia Coffee Market Size & Forecast 2016 to 2022
  • Supply & Demand Value Chain
  • Ethiopia Coffee Market Current Trends
  • Competition & Major Companies
  • Technology and R&D Status
  • Porters Five Force Analysis
  • Strategic and Critical Success Factor Analysis of Key Players

 

Report Highlights

  • Detailed Historical Overview (Market Origins, Product Launch Timeline, etc.)
  • Consumer and Pricing Analysis
  • Market dynamics of the industry
  • Market Segmentation
  • Estimated Market Sizing in terms of volume and value
  • Recent trends in Market and impact
  • Research Status and Technology Overview
  • Extensive Industry Structure Coverage

 

 

 

 

 

 

 

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