Coffee is an incredibly hot drink that humans have consumed for over 500 years. It is loved and revered all over, and coffee represents an industry worth more than 100 billion dollars. Since coffee is an integral part of people’s daily life, it is not easy to imagine a world where the coffee business industry isn’t flourishing.
To analyze the macro-environment for the business of roasting coffee business. This includes looking at the Economic, Political, Social, Technological, Environmental, as well as Legal aspects that affect this industry to understand how it could advance over the next several years.
Factors in the Political Environment that Affect the Coffee Industry
Here’s a political factor impacting coffee production:
● Commerce Relations
The coffee business industry is dependent on trade with other countries. The top coffee producers in the world are within Asia, South America, and Africa; however, it is particularly loved across Europe, Europe and North America. Trade relations between those who produce or consume coffee significantly impact the final cost that the coffee drinks are sold at, which eventually affects the sale. There are currently several international trade agreements that ensure the growth of the coffee industry. Therefore, uncertain economic conditions (such as those that involve the US or China as well as Europe and the US or UK or Europe) will not impact this industry.
Economic Factors that Affect the Coffee Industry
Here’s an economic factor impacting this industry
● Increased Income
As the economies of the world continue to expand and expand, one thing is common: consumers have growing incomes. This means that consumers can spend more each year. This can have a huge impact on the industries of consumer goods (such as the industry of consumer electronics), but it also affects the industries of food and drinks. For example, as consumers become wealthier and more comfortable, they tend to drink coffee, tea and other high-end beverages. Additionally, as incomes increase, the average consumer is more likely to spend their money on premium food items like higher-quality grounds for coffee.
Social Factors that Affect the Coffee business
Two examples are provided below. Sociocultural aspects that affect the industry of coffee:
● Health Consciousness
In the 21st century, we have witnessed significant changes in our perception of health. Making healthier choices is more fashionable than ever before, leading people to be more active, eat better food, and avoid certain behaviors. Although numerous studies have proved that coffee isn’t “unhealthy” however, it does contain much caffeine. In the context of the growing trend toward health, increasing numbers of people choose to avoid caffeinated beverages to boost their energy levels, sleep and much more. This could lead to an eroding consumption of coffee (and, similarly, a higher demand for decaffeinated coffee).
● Fairtrade
Another significant social-cultural phenomenon that is gaining attention is Fairtrade. Fairtrade is an international trend that aims to pay more to those who grow the food instead of the many mediators who have historically made massive profits. The coffee industry is among the major areas of focus for Fairtrade. Since consumers are more likely to pay for fair trade, coffee farmers will make more while intermediaries get less. But fair trade will not impact the market size unless the reasonable trade prices for coffee (which are more expensive than regular coffee prices) cause consumers to leave the market.
Technology-Related Factors that Affect the Coffee Industry
Two examples are provided below. Technological aspects impacting this industry
● Genetic Engineering
One of the most significant Technological changes that affect the entire food and beverage industry is the use of Genetic engineering. Genetic engineering involves altering the production process on a genetic basis to enhance yield, flavor, shelf life and many other aspects. For example, genetically engineered coffee (branded with its “GMO” brand) is rapidly increasing in popularity in the coffee industry. Overall genetic engineering will assist in growing the coffee industry since it allows producers to earn more profits. However, some consumers choose not to consume products with genetic engineering because of various reported adverse side consequences.
● Coffee Machines
Another major shift in the coffee industry is the emergence of new coffee-specific equipment drip machines, coffee grinders, and makers available at every electronic store. They make it more convenient than ever before to enjoy coffee, causing customers to experiment with brewing at home. This shouldn’t impact the amount of coffee consumed; however, it could increase the number of people drinking and making coffee in their homes and less coffee being finished outside the house in coffee shops and cafe chains.
The Environmental Factors that Affect the Coffee Industry
Here’s an Environmental aspect that is affecting this industry
● Sustainable Farming Practices
The world is confronted with a myriad of environmental challenges. While some of the concerns aren’t related to food and beverage industries, such as the emissions from cars, however, some of these are particularly, unsustainable farming processes that could lead to the destruction of forests. Many other issues are related to agriculture, including using pesticides, fertilizers, or water consumption. In all likelihood, the world is insisting on sustainable farming methods. Ultimately, this will likely increase the cost to consumers, which could hurt this industry.
Legal aspects that affect the Coffee industry
Here’s a legal aspect that affects this industry
● Food Safety Standards
As a product formulated for consumption, coffee comes under the food and drink rules across the countries. That means it is subject to various laws regarding how it’s stored, transported, and consumed. Additionally, coffee has a significant amount of caffeine, which means it’s subject to standards for caffeine in certain areas of the world the standards are getting stricter over time, but the safe handling of coffee is so simple to follow that it shouldn’t pose an issue for the coffee business.
