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From Bean to Brew: The Coffee Supply Chain

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Coffee Supply Chain

What Does The Coffee Supply Chain Look Like?

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There’s a good chance your day started with a cappuccino, or a cold brew, and you aren’t alone. In fact, coffee is one of the most consumed drinks on the planet, and it’s also one of the most traded commodities.

According to the National Coffee Association, more than 150 million people drink coffee on a daily basis in the U.S. alone. Globally, consumption is estimated at over 2.25 billion cups per day.

But before it gets to your morning cup, coffee beans travel through a complex global supply chain. Today’s illustration from Dan Zettwoch breaks down this journey into 10 distinct steps.

Coffee From Plant to Factory

There are two types of tropical plants that produce coffee, both preferring high altitudes and with production primarily based in South America, Asia, and Africa.

  • Coffea arabica is the more plentiful bean, with a more complex flavor and less caffeine. It’s used in most specialty and “high quality” drinks as Arabica coffee.
  • Coffea canephora, meanwhile, has stronger and more bitter flavors. It’s also easier to grow, and is most frequently used in espressos and instant blends as Robusta coffee.

However, both types of beans undergo the same journey:

  1. Growing
    Plants take anywhere from 4-7 years to produce their first harvest, and grow fruit for around 25 years.
  2. Picking
    The fruit of the coffea plant is the coffee berry, containing two beans within. Ripened berries are harvested either by hand or machine.
  3. Processing
    Coffee berries are then processed either in a traditional “dry” method using the sun or “wet” method using water and machinery. This removes the outer fruit encasing the sought-after green beans.
  4. Milling
    The green coffee beans are hulled, cleaned, sorted, and (optionally) graded.

From Factory to Transport

Once the coffee berry is stripped down to green beans, it’s shipped from producing countries through a global supply network.

Green coffee beans are exported and shipped around the world. In 2018 alone, 7.2 million tonnes of green coffee beans were exported, valued at $19.2 billion.

Arriving primarily in the U.S. and Europe, the beans are now prepared for consumption:

  1. Roasting
    Green beans are industrially roasted, becoming darker, oilier, and tasty. Different temperatures and heat duration impact the final color and flavor, with some preferring light roasts to dark roasts.
  2. Packaging
    Any imperfect or somehow ruined beans are discarded, and the remaining roasted beans are packaged together by type.
  3. Shipping
    Roasted beans are shipped both domestically and internationally. Bulk shipments go to retailers, coffee shops, and in some cases, direct to consumer.

Straight to Your Cup

Roasted coffee beans are almost ready for consumption, and by this stage the remaining steps can happen anywhere.

For example, many factories don’t ship roasted beans until they grind it themselves. Meanwhile, cafes will grind their own beans on-site before preparing drinks. The rapid growth of coffee chains made Starbucks the second-highest-earning U.S. fast food venue.

Regardless of where it happens, the final steps bring coffee straight to your cup:

  1. Grinding
    Roasted beans are ground up in order to better extract their flavors, either by machine or by hand. The preferred fineness depends on the darkness of the roast and the brewing method.
  2. Brewing
    Water is added to the coffee grounds in a variety of methods. Some involve water being passed or pressured through the grounds (espresso, drip) while others mix the water and grounds (French press, Turkish coffee).
  3. Drinking
    Liquid coffee is ready to be enjoyed! One average cup takes 70 roasted beans to make.

The world’s choice of caffeine pick-me-up is made possible by this structured and complex supply chain. Coffee isn’t just a drink, after all, it’s a business.

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Retail

Visualized: 10 Black Friday Retail Trends

Consumers are expecting more this Black Friday, but for retailers, the pressure is mounting. Here are 10 trends that may impact them in 2023.

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Black Friday trends infographic

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The following content is sponsored by Airwallex

10 Black Friday Retail Trends 

This year, retailers are under major pressure to orchestrate even more substantial and enticing Black Friday discounts for their customers.

We partnered up with Airwallex to visualize the latest available data from 2022 to understand what this year’s holiday weekend could look like for retailers.

Trend 1

Consumer Loyalty and Price

Theme: Buyer Behaviour

In a 2022 U.S. study conducted by Emarsys, 58% of people claim they are more loyal to retailers that offer them discounts, incentives, and rewards, indicating that price plays a crucial role in fostering loyalty.

Moreover, 60% of respondents admitted to turning their back on the brands they were previously loyal to in an effort to save money amid inflation hikes.

Trend 2

Convenience is King

Theme: Buyer Behaviour

Salesforce notes that 2022 saw a global increase of 9% in Buy Online, Pick Up In Store (BOPIS) adoption during Cyber Week compared to early November data.

Specifically in the U.S., retailers offering BOPIS experienced 38% higher growth in online revenue during Cyber Week compared to those without this service.

Trend 3

Global Spending is Up

Theme: Spending Patterns

Globally, 2022 Cyber Week spending increased 2% YoY to $281 billion. This is despite some regions experiencing a decline and some retailers reporting lighter foot traffic.

Trend 4

Margins at Risk

Theme: Spending Patterns

While consumers are spending more, retailers are still seeing their margins squeezed due to a variety of factors such as high inflation, high cost of goods, strained systems, and increased demand for discounts.

That is why we are starting to see certain retailers choosing to “boycott” Black Friday, and although estimates vary, The Guardian reported that as many as 85% of smaller retailers were not participating in Black Friday in 2021.

Trend 5

The Smartphone Surge

Theme: Buyer Behaviour

According to Adobe, 47% of U.S. online sales came from smartphones during the 2022 holiday spending season—up from 43% in 2021.

This reflects a broader trend within the retail sector, aligning with projections for substantial growth in the global mobile commerce market.

Trend 6

Deeper Discounts

Theme: Spending Patterns

In another benefit to consumers, discounts are getting deeper. Throughout the 2022 holiday season, the average discount stood at 21% compared to 19% in 2021 with apparel, skincare, and beauty touting the deepest discounts.

Trend 7

Alternative Payment Options

Theme: Payments

When it comes to payment methods, alternatives such as Buy Now Pay Later (BNPL) are gaining traction, as evidenced by a 5% increase in orders YoY.

Trend 8

Financing Lower-Priced Goods

Theme: Payments

Despite the success of Buy Now Pay Later, the average order value decreased 5% YoY, meaning consumers are using the payment method more, but to help finance lower-priced goods.

Trend 9

Sales Spikes in APAC + Europe

Theme: Payments

Even though Black Friday has been traditionally viewed as an American retail phenomenon, it has transcended its U.S. origins and has been embraced by consumers the world over.

Several countries witness significant spikes in online sales in 2022, most notably in Australia with a +239% sales spike, and Spain at +576% spike when compared to average October sales.

Trend 10

Retailers Hit with Hidden Fees

Theme: Payments

Did you know that merchants of all shapes and sizes can often find it hard to escape paying unnecessary transaction fees during the holiday season?

For context, every international dollar a retailer generates during the holiday period could be converted up to three times, costing them up to 5.5% of every transaction.

Black Friday supplemental The Conversion Trap


Considering the multitude of benefits afforded to consumers during Black Friday and the holiday season, the question that looms is: is this retail bonanza genuinely worthwhile for retailers?

By partnering with Airwallex, retailers can simplify global payments, but also capitalise on increased consumer spending—without sacrificing on profit.

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Learn more about Airwallex now.

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