Mexico Coffee Market – Industry Analysis, Forecasts and Opportunity Assessment (2017-2023)

Report on Mexico Coffee Market – Industry Analysis, Forecasts and Opportunity Assessment (2017-2023)

Introduction to Mexico Coffee Market

A famous producer of coffee throughout the western hemisphere, Mexico’s coffee industry has consistently witnessed increases in the production – and subsequent export – of its products. Though not as prolific as its South American counterparts, namely, Brazil and Columbia, Mexico’s coffee has its fair share of loyal customers, the USA being its chief importer. Originally introduced from Spain, Mexico’s coffee industry flourished due to the lower production costs which the country offered. Mexican coffee beans are now produced throughout the country, concentrated in states like Chiapas, Veracruz and Oaxaca. These alone contribute to 73% of the total coffee production in Mexico and are the main drivers of this seventh-largest coffee producer of the world.

End-User/Technology

The spurt in world population, especially the rise in the number of millennials and the relative shift to a nocturnal lifestyle, has led to an ever-increasing demand for coffee all over the world. While professional roasters and producers of specialty coffee products appreciate the unique qualities of Mexican coffee beans, the general demand is driven by consumers who consider a cup of coffee a part of their daily routine.

From a freshness perspective, beans, which have been through a supply chain, gradually lose their distinguishing qualities. Hence, the best cups of Mexican coffee can be procured at the hands of retailers who perform fresh roasting of the beans, helping to preserve the flavors till the time of consumption.

Market Dynamics

Coffee is produced all over the world, at high altitudes and in cooler environments. Depending on the location, coffee is graded and classified. It is a world-favorite drink with consistently high demand for the beverage seen throughout the year. Brazil is the largest producer-exporter of coffee, followed by many Asian nations (Vietnam, Indonesia and India) and American neighbors (Columbia, Mexico and Peru) with African nation Ethiopia rounding out the top ten producers.

Due to improvements in seed varieties and plantation techniques, coupled with the increasing national investments in the facilities for coffee production, world production of coffee has, over the past few decades, risen exponentially.

The International Coffee Agreement (currently enforced since 2011) lays down rules on the quota of production and export of coffee among its 50 members (as of June 2018).

Market Segmentation

The main botanical varieties of coffee produced in Mexico are:

  • Bourbon
  • Typica
  • Mudno Nuevo
  • Catura
  • Maragogype

Grades of Mexican coffee in increasing order:

  • Arabica
  • Altura (Grown at high altitude)

Regional/Geographic Analysis

While grown all across Mexico, the following three regions are renowned for their coffee varieties.

Coffee grown in Chiapas, Mexico (often labeled Tapachula) is fairly consistent across the region, owing to its tropical climate and proximity to the higher quality coffee from Guatemala, with whom Mexico shares its border. The region contributes a lion share of production. Oaxaca’s coffee is known for its light body and acidity.

Veracruz is where the highly revered Altura grade of coffee is produced, chief among which is Altura Coatepec (named after the Coatepec town).

Zooming out on the globe, USA, Guatemala and other central American countries like Honduras are also predominant coffee producers, and a large chunk of the yield is exported to various regions and nations of the world.

Opportunities

The footprint of global retail coffee chains like Starbucks and Costa Coffee is growing. This growth, especially in developing markets like the Indian subcontinent (with its sizeable urban population) and the relentless demand for coffee in traditional locations like USA and Europe provides a tremendous opportunity to harness the benefits of procuring Mexican coffee. While agriculture forms a miniscule portion of Mexico’s GDP (3.42%), coffee is nevertheless poised to only rise in production and importance.

While not as game changing, an emerging trend in the country is the rise of specialty roasters, especially in the capital Mexico City and nearby areas. These aim to popularize the beverage as a drink of the purists, instead of the usual casual consumption of coffee.

Key Players

Coffee chains form the major players in the market of coffee production and procurement in Mexico. Chief among these are Starbucks, Café Punta de Cielo and The Italian Coffee Company.

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