Ethiopia Coffee Market

Description

Ethiopia, the home of Arabica is world’s fifth largest Coffee producer. And the biggest producer in Africa. Almost 50% of the Ethiopian coffee is consumed domestically and the market is expected to show a steady growth. The Ethiopian Coffee Market is currently accounted for US$XX Million and is expected to grow to US$XX Million by 2022, at a CAGR of XX% during the forecast period. Experts say that the diversity of Ethiopia’s coffee is unique and is finest, in terms of quality, beating the Kenyan and Colombian beans. However, farmers and plantation owners have not able to get the returns they deserve, mainly due to lack of technology, lack of variety of beans and improper distribution. Recent government initiatives in favour of the export business have helped in improving the scenario.

Market Dynamics:

The revenue generated in Ethiopian Coffee Business and its brand value has mainly been affected by the legal framework for exports. Due to the value of Ethiopian coffee all over the world, the Ethiopian government emphasises on its trade through commodity exchange, which simply, cannot survive without coffee. Recent changes in Legislature have given the Commodity Market and a few government-approved cooperatives the authority to grade all the coffee by quality and trade it accordingly. This has kerbed the interaction between hundreds of small local cherry-processing stations with foreigners. The valuation they got from these customers added value to their product. However, Starbucks- the world’s biggest speciality coffee company and many others, buy Ethiopian coffee through the exchange. Starbuck’s Ethiopia Sidamo blend hails from the country’s southernmost region. The market is also affected by advancements in technology and the increasing variety of seeds available globally, especially the ones supplied by Kenya.

Market Segmentation:

On the basis of type, the Coffee Market has been traditionally divided into three main types- Arabica, Robusta and Liberica. Production, as well as consumption of Robusta and Liberica varieties, is almost negligible. On the basis of the end product, it can be divided into Coffee Powder, Pod, Capsule, Dips, etc. However, the processed forms are less popular than the whole, roasted coffee beans, which are available throughout the country in abundance. On the basis of the market, the divisions are domestic and international. The revenue generated by Ethiopia’s coffee exported internationally is greater than that due to local consumption by manifolds.

Geographical Analysis:

Ethiopian Arabica coffee exports account for 25-30% of the region’s total export revenue. Ethiopia alone accounts for 29% of the African coffee trade- being the largest producer of Coffee in the continent. Large Global Brewing Giants in the developed countries are regular customers of Ethiopian Coffee. the United States of America, Belgium, Spain, France Germany, Italy, Saudi Arabia, the United Kingdom, and Sudan are the major importers of the Ethiopian Arabica coffee.

Key players in the industry include Nestle, The J.M. Smucker Company, Mondelez International Inc. and Strauss Group Ltd.- to name a few.