Instant Coffee Gains Against Ground
In populous tea lands an emerging middle class favors instant over ground.
The global instant market is expected to grow 5% through 2022.
By Kelly Stein
Asia and the Middle East are quickly overtaking Europe as the driver of instant coffee growth in an expanding global market valued at $9.9 billion per year.
No matter where you live or how much money you make, it takes utensils and time to brew fresh coffee. Single-serve capsules are a popular solution in more affluent countries but single-use, pour-over packets, and sticks of freeze-dried, powdered or micro-roast instant are versatile, and easily cached and carried in pocket or purse.
Instant Coffee Gains Against Ground
Sudden instant tastes like a pour-over.
Convenient and inexpensive, 2-in-1 and 3-in-1 coffee sticks are packaged with sugar and creamer. Sold in boxes containing 6-7 combination packs, coffee sticks contain 2-3 grams of coffee, 7-8g of non-dairy creamer, and 9-10g of refined cane sugar. Customers pay 50 cents or less per cup. Price is a major consideration. Premium micro-roast Via from Starbucks and the best quality Nescafé selections cost only $1 per cup.
Fresh-brewed coffee is available worldwide, but instant coffee reached a volume of 21.5 million 60-kilo bags in 2016, according to the International Coffee Organization. Exports of ground roast, mainly arabica, are estimated at 3.5 million bags in 2017/18. In contrast, soluble exports are projected at 15.9 million bags.
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Market research firm IMARC predicts compound annual growth of 5% per year through 2022. Emerging markets such as Asia and the Middle East will increase sales to $13.1 billion by 2022.
For more than 15 years, thanks to new manufacturing methods and greatly improved taste, instant has found its way into consumer’s cups. Manufacturers like Colombia’s Buenacafé report strong demand for one-use packages that will increase competition and lower prices. Surveys reveal that even freeze-dried coffee consumers “will look for the aroma and smoothness of arabica and the character of other origins,” according to Buenacafé.
P&A International Marketing business partner, Carlos Brando, predicts instant coffee will experience the fastest growth in emerging markets such as China, India, Indonesia, and Vietnam.
Instant Coffee Gains Against Ground
Nescafé is the top instant brand globally.
“These tea consumers are migrating to coffee consumption via soluble coffee because it is easy to make it like tea and its cost per cup is low,” he said.
Nestlé’s Nescafé and Nespresso brands remain the global leader with 23% of the $77 billion coffee market, but regional players like India’s Starbucks-Tata partnership are introducing millions to coffee.
Single serve is how to reach these new coffee consumers according to Aguinaldo José de Lima, institutional relations director of ABICS (Brazilian Soluble Coffee Industry Association). He said that “instant coffee will take advantage and grow with the single-dose segment, especially final products with coffee and milk blends, cappuccinos, among others.” This explains a growth rate of 3.6% in the last 7 years (2009-2016) in both at-home and out-of-home segments, according to Neumann Kaffee Gruppe Statistics.
The recently published report by IMARC, “Instant Coffee Market: Global Industry Trends, Share, Size, Growth, Opportunity, and Forecast 2017-2022,” states that instant will grow in popularity despite the dominance of fresh beans in the industry. The report adds that “transportation of instant coffee is cheaper, as it has lower shipping weight and volume than beans or ground coffee. Moreover, instant coffee offers convenience in preparation, which increases demand among the urban consumers.”
The convenience of soluble coffee opens markets for more premium coffee products, according to IMARC. “Europe including the CIS represents the largest market for instant coffee globally. Asia is the second largest market and within Asia, the Middle East represents the fastest growing market.”
Nestlé became the world’s biggest coffee seller by launching its first instant coffee in 1938 and the first capsule machines in 1986. Few people know, but the first soluble coffee in the world was developed in response to a request from the Brazilian government, during the coffee crisis of 1929, to come up with ways to add value. Nescafé was formulated in Brazil in 1938 and its first factory was built in Araras, a two-hour drive from São Paulo.
“Coffee prices declined vertiginously after the great depression and the government understood that Nestlé, with its knowledge and food processing technology, would be the ideal partner and the solution for this problem,” according to the company. Decades later, in 2014, a brand new facility opened in the same little town in Brazil. Today it is considered the largest and the most modern Nescafé factory in the world.
Since its launch, Nescafé has been the market leader in the Brazil. Globally it is the most valuable brand in Nestlé’s portfolio and the fifth most valuable brand in the food and beverage segment. The Nescafé blend of arabica and robusta is sold in more than 180 countries.
Market dominance invites competition and spurs innovation. Since 2010 the JAB Holding Company has spent $30 billion acquiring coffee companies, beginning with Douwe Egberts. Strauss group, Mondele International (Kraft) and Tchibo are all jostling for position. Meanwhile smaller companies are investing in innovation, technology, and quality processes to claim market share in the lucrative premium segment.
Instant coffee for the specialty market
Aguinaldo José de Lima with ABICS says that “Quality in soluble coffee is improving. In the last few years, freeze-dry is showing good results in the sensorial aspects. Considering that this segment will grow more than roasted and ground coffee, the industry is investing more in production and technology.”
According to IMARC, retail coffee shops in mature and emerging markets are popularizing coffee with young consumers. “Most importantly, innovation in the food and beverage market is stimulating the demand for instant coffee as manufacturers are introducing finer quality of products with enhanced flavors and aroma, and attractive packaging,” de Lima said.
A great cup of coffee ready in seconds is heaven for those with an urge for tasty cup but few consumers have the time or gadgets that preparing specialty beans demands. The quest is convenience without sacrificing rich taste. Sudden Coffee is an example. This premium instant brand recently launched in specialty coffee market. According co-founder and c.e.o. Joshua Zloof, Sudden Coffee tastes like a pour over with the convenience of instant.
Instant Coffee Gains Against Ground
Descamex in Cordoba Mexico is a pioneer in natural decaf.
“We would like to make the world of great tasting, specialty coffee accessible for everyone,” he said. At $3 per serving anyone can have a cup of quality coffee with nothing more than hot water and a cup, he said.
Compared to a typical soluble, Sudden sounds pricey, but Zloof explains that “specialty instant coffee costs about the same to produce as fresh specialty coffee. Specialty instant coffee is roasted and brewed into a liquid first, and then dehydrated into a powder. As a result, we need to put the same amount of effort and care into each cup as a café,” he explains.
“The quality of our flavor is determined by the quality of beans. We use the same specialty-grade beans as the cafés which can cost 3-4 times more than beans used for standard instant coffee,” he said, adding that “our goal is to be the online version of Starbucks.”
Mexican decaf and instant coffee company Cafiver is betting the country’s fast-growing domestic market will pay for quality.
Cafiver commercial director Carlos Eduardo Lópes Romero says that soluble coffee makes up 80% of Mexico’s domestic market. Average coffee consumption is 1.6 to 1.8 kilos per capita. Cafiver produces an about 500,000 bags per year in the company’s decaf and instant facilities.
“Nowadays we mix 60% robusta and 40% of arabica in our blends. We are working toward 50:50 in our blends,” he says. “We want to be the biggest coffee company in Mexico with different products on Mexican grocery shelves all over the country.”
Solubles manufacturer and exporter Descamex (Descafeinadores Mexicanos S.A.) created the Café Los Portales brand to meet growing demand for a quality instant.
“Diversification is really important for our businesses, but we will never lose our focus in coffee,” explains Descamex general director, Luis Demetrio Arandia Muguira.
The company has developed several different products, not only with coffee but in teas, sauces, and oils. The soluble coffee portfolio now offers seven different options for the internal market: Los Portales Platino, Gold, Decaf, Traditional, Cappuccino, Freskaf, and Ver-alkaff. Descamex also offers its production infrastructure to other brands and companies so they can produce customized and private-label products.
Making instant
Coffee crystals and coffee powder are the two most popular forms of soluble coffee. Each begins as processed and ground roasted beans and both traditionally feature a robusta and arabica blend. This inexpensive blend became popular in the 1970s in the United States. Recently changing lifestyle and a greater appreciation of taste have led to the creation of instant coffee with better sensorial qualities.
The first step in producing soluble coffee is to brew it under tightly controlled conditions, capturing all the essential oils and aroma as well as suspended particles using sophisticated extraction equipment. Extraction occurs in a series of columns which are filled with roasted and ground coffee. At this stage, the grounds receive water at different temperatures and under different atmospheric pressures in order to extract all of the flavorful elements. The final result is a dense coffee extract.
After creating the extract and discarding the roasted beans, the goal is to separate water with minimal loss of flavor. A centrifuge can be used, or the coffee can be heated until the water evaporates. After processing, the extract is exposed to air heated to 480ºF. The hot air is blown downward from a high tower, drying the spray into a powder as it falls. The powder contains 2% to 4% moisture.
Spray drying is more efficient and permits larger production runs. It dries quickly and the fine rounded particles of coffee are ideal for packaging. This is the most common and least expensive method for producing instant coffee.
Freeze-drying consists of cooling the extract to extremely low temperatures which freezes water into tiny crystals. The extract is first cooled to -20oF. Once frozen, it is placed on a steel belt (or trays or drums) and passed through a freezer at temperatures of -40ºF to -50ºF. Ice crystals are removed mechanically and as vapor under vacuum. Production costs are higher, but freeze-drying guarantees enhanced quality since freeze-drying leads to better flavor and richer aroma. That is why freeze-dried coffee is growing in popularity.
Throughout the process, the beverage loses volatile compounds which diminishes aroma. This is why manufacturers use special machinery to capture gases and volatile compounds during the roasting and grinding phases. The extract is protected from oxidation by introducing nitrogen or carbon dioxide before dehydration. The “coffee essence” is then added back.
A patented hybrid process adds microscopic coffee grinds after the coffee is freeze-dried and before packaging. In this variation, some of the roasted coffee used to make the extract is pulverised into particles (about one-third of a millimeter in diameter) to create the blend. The surface area is so large they brew instantly and their size mimics the sediment found in drip brew.