New decade, new plan for coffee - Agriculture ministry spearheads Asia marketing strategy
Coffee from Jamaica, grown at specific elevations in the Blue Mountains, is considered the best in the world.
Avia Collinder, Business Reporter
The Ministry of Agriculture is putting in place what it says is a high-level, strategic marketing committee to guide the diversification of marketing efforts for Jamaican coffee, with a keen eye on ramping up sales volumes to China, Europe and the United States.
The marketing team include ministry officials and representatives of the Jamaica Coffee Exporters Association (JCEA), the Coffee Industry Board (CIB) and other agencies.
Christopher Gentles, director general of the CIB, visited China in October to scout possibilities for engaging the market to take off excess amounts of the beans expected from the 2009-2010 crop.
He announced this week that the CIB board of directors and the committee set up for the "strategic diversification" of the Jamaican coffee industry will be evaluating a proposal for the sale of coffee over the long term, that is, the next five to 10 years.
For the ministry and the CIB, market diversification will mean more sales in other Asian markets, apart from Japan, as well as greater volumes in Europe. Currently, the CIB currently sells some four per cent of production in the latter market.
"Given that the average coffee consumption in Europe is 25-35 million bags, and the very upper end of the luxury consumption is usually less than 0.005 per cent of the market, depending on the country, then it is easy to say that Jamaica should be aiming to sell at least 5,000 units per annum in Europe, Russia and the Middle East, rather than the 1,500 units currently now sold," Gentles told the Financial Gleaner.
Japan, Jamaican's primary coffee export market, has fallen off in the recession, but the coffee industry spokesman expected it to recover in time to contribute to the Asian marketing push.
According to the CIB, the three-year annual average for sales to Japan is approximately 1,000 tonnes, which represents about 85 per cent of total annual sales. The United States and Canada account for 10 per cent, or 100 tonnes per year.
"The United States and Canada currently consume approximately 20 million bags of coffee per year and it is estimated that Jamaican Coffee can do significantly better than it is doing right now."
China plays a key role in the new coffee marketing outlook.
According to Gentles, current policy does not facilitate the export of Jamaican coffee in the form of green beans to China.
Currently, China receives some Jamaica Blue Mountain and other Jamaican coffee trans-shipped from Japan and Taiwan.
The CIB estimates that less than 15 tonnes of Jamaican coffee have entered China over the last five years and although the potential is believed to exist for 30 tonnes per year.
"If the execution of a strategic marketing plan works for China, then
Total coffee consumption in China is estimated by the CIB to have been at about 45,000 tonnes
In excess of 85 per cent of actual consumption is for instant coffee.
"The International Coffee Organisation estimates the current unparalleled growth rate in this market in China is an unprecedented 10-15 per cent per year. Nestle has had an instant coffee factory there for 15 years," said Gentles.
While China is said to be a country of tea drinkers, as Japan was some time ago, pundits in the coffee market predict that this could change with the specialty coffee phenomena gaining hold among the more affluent there.
"If you consider that many of the cups of good single origin coffee range from 88 yuan or US$15 per cup for Colombian Emerald Mountain
According to the CIB head: "It will require a paradigm shift in the thought processes of the farmers, licensed coffee dealers and the CIB, to restructure the coffee industry in order to consistently fund the promotion for the marketing of Jamaican Coffee for markets in North America, the European Union and other markets in which we are currently not as active as we would like."
SOURCE: Financial Gleaner, Friday, January 1, 2010