INSTANT COFFEE ‘STILL KING’ IN PHL AMID VIRUS
COVID-19 has reduced the market for fresh roasted coffee in the Philippines, with consumers choosing the cheaper alternative of drinking instant variants while stuck at home during the government-imposed community quarantine.
“Instant coffee is still king, especially in the Philippines,” said Emmanuel Torrejon, board director of the Philippine Coffee Board (PCB) at the recent webinar on Cafe, Coffee, Covid-19 —Roasting Ideas for a New Normal. “So if they can’t have their coffee in a café or in a lounge or in the business meetings, they have instant coffee. So we’re sliding back from regular roasting ground fresh coffee to a bit of three-in-one instant coffee again.”
While this may be good news for companies producing instant, threein-one coffee, he said, “It would not be the best for cafés, especially the specialty coffee shops who have lost their clientele, and they’ve been selling a lot of these coffees together with a lot of gadgets. That’s really the trend, [selling] a lot of home gadgets [like] pour overs.”
A 29-gram pack with 30 sachets of three-in-one coffee sells for about P175, while roasted ground coffee will cost anywhere from P350 to P500 per 250-gram pack. At cafés, a small cup of regular brewed coffee will cost at least P110.
Torrejon noted an increase in online selling of roasted beans or roasted ground coffee especially from small start-ups. These are mostly consumed at home, but “the house market is small; it’s very insignificant .... The bigger market is where it’s drunk together with friends, family, associates, business meetings, hotels airlines and that’s all lost.”
He said Philippine coffee roasters suffered a 90-percent loss in business in April, although the market recovered a bit in May and June. “I hope we can recover early next year, but it will be a hard time for us to recover that lost market.” Government has already allowed the reopening of restaurants and cafés at 50 percent dining capacity, although the Businessmirror has observed there are still very few people getting together in these establishments, possibly due to health concerns. On the upside, Pacita U. Juan, president and co-chairman of the PCB, pointed out that coffee farmers were back to planting because of Covid-19. “They have nothing to do but plant, which is good for the Philippines, where demand is so much higher than production.” Data from the Bureau of Plant Industry indicated that 117,454 hectares of farmland are currently planted to coffee, yielding an average of 300 kilograms per hectare. According to the PCB web site, the Philippines now produces about 30,000 metric tons of coffee a year, in four varieties: Arabica, Liberica (Barako), Excelsa and Robusta. The country, along with Asean neighbors Indonesia, Vietnam, Thailand and Laos, produced some 41.8 million bags of coffee in 2018, accounting for 24.54 percent of the world’s production of coffee, as per data from the International Coffee Organization, of which the Philippines is a member. Torrejon, meanwhile, predicted that worldwide coffee prices will likely decrease, with Brazil announcing record-high production and Vietnam still having a surplus production. “As we see now, the market trading in New York [is] at the 90s [US$ per pound] level and therefore directing it to go towards south at the $85 [per pound] level. So I’m not very optimistic about green coffee prices, and probably we will see some cutbacks in production from other countries like Colombia and Indonesia. [And with] people going back to farms, this means more production and maybe lower prices in the Philippines,” he underscored. Other countries such as Singapore and Malaysia have seen a rising trend towards bottled fresh coffee drinks like cold brews, and packaged ready-to-drink coffee, according to its representatives in the webinar. Torrejon also forecasts the same for the Philippines: “We’re going to see more of that being consumed at home and outside. And it’s readily available in supermarkets, which is the main channel [for F&B retail] nowadays.”