CBI Ministry of Foreign fais of the Netherlands CBI Trendmapping for Coffee, Tea and Cocoa ‘Insights and foresights on key European market dynamics’ Management Summary Since the late nineties and the beginning of 2000 the sustainability debate has been directly linked to the ‘coffee, tea and cocoa seaor. In 10 to 15 years time the market has transformed from a principally bulk’ market to a market with several quali) and sustainability claims, The sectors characterized by a ising awareness regarding the se of raul sources, telignment a) ssanabiliyregirementin ‘mainstream markets and new variations in consumer demands. How to tap into the opportunities of the EU market business environment? Inform yourself with this document on current and futur trends in the coffee, tea and cocoa sector. Figure: Trendmapping forthe Coffee Tea and Cocoa sector a 3 = 2 6 e iS 2 1S = ene Cee ees mY Source: CB1 Market Information Database + URL: wwzchLeu «Contact: atietntelibl eu wuzcbLeuldsclaimer(1 Tendmapping for Coffe, Tea and Cocoa Social market drivers Increasing awareness of health Benefits. EU consumers ‘become more aware of health issues. Asa result large «coffee, cocoa and tea distributors stress the beneficial health effects of their products (sometimes after bad ‘ress onthe adverse effects on human health): ‘chocolat is good for yourhar’, green coffe is ‘good foryou brain’ and green tea is ‘good for digestion’. ‘Some ofthese claims are not well éacumented yet but as busines is investing in research the validity ofthese aims wll improve overtime, See box foran overview forcocoa. Being aware ofthe potential healthy and unhealthy benefits of cocoa, ta or coffee can giveyou a «competitive advantage as an exporter. Especially when. ‘this is elected in EU legislation on health issues for ‘example related to cadmium in cocoa and chocolate (box). Box , EU Maximum levels ofadmium in cocoa. The EU proposed maximum levels of cadmium in cocoa products sa contibution to limitthe [amount of cadmium consumes take in fom all foods. Cameroon, Colombia, Eevador, Ghana, exico, Nicaragua and Peru complained inthe WTO that this EU decision threatens thelr export and the livelihoods of smallholder cocoa farmers See WTO ste for more information: so orglenelishinews elnewsra elsps rojuia ehemteadnium Box Medical characteristics of cocoa. Cocoa is reported o be antisepti, duretic ecbole, ‘emmenagogue, and parasicide. Cocoa isa folk remedy fralopeci, bums, cough, dtp, ees, fever, stessness, malaria, nephross, parturition, pregnancy, rheumatism, snakebite and wound. {Cocoa butters applied to wrinkles in the hope of correcting them, ‘The astdevelopmentin developments in «cacaochocolate esearch published inthe Journal ‘ofthe American Medical Association, include wo clinical studies whieh india the flavanls Found in (Cocoa are beneficial to vascular heath + ChangingEU consumer preferences and buying behaviour. EU industry and consumers demand (cheaper) mainstream cofee, tea and cocoain largevolumesand quality ‘products ‘witha story’at the same time.In general the EU industy and consumersask forthe conditions under whichthe products areproduced Both the responsible ‘consumerin Wester Europe andthe ‘new’ consumer in EU emerging countries increasing, Exporters should be aware ofthe distinct increasingsegmented markets ‘based on different types of EU consumes. ‘Source: CBl Market Information Database» URL: www. cbleu «Contact: matketintelaibleu- wus chleuldslaimer(1 Tendmapping for Coffe, Tea and Cocoa * Demand forqualty products increasing Quality productcan refer to (1) higher quality ‘products, (2) unconventional product suchas flavoured coffees, cocoa’ orteasand (3) products wth an unusual background or story behind them (see box 3foran ‘example)- Origin and altitude for coffe are important factors that determine the quality of the products. For coffee, cocoa and tea, single origin products are already ‘onthe market, Exporters should realise that quay and origin are more often directly linked to the consumer product and the brand image (see box). Box3, Example quality coffeewith a story marketed asa brand certain growths of coffee may be highly prized fo thee favour characteris and aac suitable premium Examples include: J+ Jamaican Blue Mountain- buy. buemountalncofiecomt J+ Havall Kona bp. konacofie com; J+ Top Kenya AA-hnpjwnw voleaicacoffee.com estatecofes/kenyar aacoffee htm; J+ Guatemalan Antguas-hupcoffee aniguacofee oglgonall + EVindusty focus onfarmerproductivig. Expected scarcity and sustaining the supply base are wo important drives Asa result EU based industry and cerfiersaremore and mote proactivelyinvestng in the productivity and sustainability of farmers. Productivity gains are expected in the cocoasectorbecause itis faced with relatively ‘old farmers, litle interest of young farmers and high differences inyields In the tea sector. there is room for improvement inthe availability and organisation of manual Tabour. And in the coffee sectorquality and productivity improvements arestill feasible Exporters can play an active role in sustaining and increasing farmers productivity Technological market drivers + Innovation o improve quality. Small innovations in agronomy combined with better farm management can lead to improved crop management, higher production and/oryieldsand higher quality products. The emphasis on quality in the EU market has led to increased importance ‘of collecting, cutting, sorting and mixing ‘techniques. Exporters are more and more asked to secure the quality ofthe produas delivered. * Genome nmovaton. The development of resistant and more productive trees and seeds isan important tool to sustain production. The genome ‘of the (Theobroma) cacao tree's can help cacao ‘breeders to accelerate esearch on cacao molecular biology and breeding for elit varieties tha are resistant to fungal, viral diseases and yield and hardiness improvement. Uncertainty about the ‘outcome of genome innovation and investments, needed to suppor this innovation can be two issues will effect the (role) of the exporter. "the Specialty Coffee Associaton of Europe psn sca. com * For cocoa ine &flavou? ised. indicate aype of specialty coco thatomes rom spececounes. See thelist of Co, bus cco onan sccoa-beanslufineorfasnuscocea hum ‘Source: CBl Market Information Database» URL: www. cbleu «Contact: matketintelaibleu- wus chleuldslaimer