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Germany: land of coffee opportunities.

The German coffee market has seen recent opportunities open up as the Berlin Wall was knocked down and the East Germany was reunited with West Germany. No longer does the expression, "Go West, young man" apply. The new slogan is "Go East," not only to the Bundesladen but also to the former Iron countries of: Czechoslovakia, Poland, Hungary, Yugoslavia and Romania.

Each major coffee manufacturer has sent either feelers into these countries' business communities or have set up shop for new business. Larger coffee importers such as Rothfos has set up shop in Warsaw, and Tchibo is currently building a roasting facility in Hungary.

In the Western part of the Federal Republic of Germany, the Jacobs Gruppe, Philip Morris, hold a 24-25% share of the market, followed by Tchibo with 20% and Eduscho with 15%. Aldi (what is considered a discounter roaster) holds 16-17% of the market and Melitta has gained in its market share, now holding 6-7%. Nestle and Dallmayr holds 4-5% of the market, and private label roaster, Darboven, holds 2-3%.

These estimations are a little sketchy as statistics for Germany's East and West total consumption and roasting are being accumulated and should be available sometime this year. Rothfos, a member of the Neumann Kaffee Gruppe, is the largest coffee importer in Germany.

Consumption is growing. The Western portion of Germany experienced a small growth of 1% while the East grew 20%. In 1989, per capita consumption in the former GDR was recorded at 4.5 kg, in 1990, the amount in the new Bundeslander has grown to 5.8 kg. Volume-wise, it is expected that the East will meet the West's standards by the end of 1992. Quality-wise, it will take more time.

There is no generic advertising for coffee in Germany. Articles and press information are sent to the media from the German Coffee Association (Kaffee Verbund) and various manufacturers in an effort to educate people on the roast and quality. The former East Germany prefers non-decaffeinated coffee, while the West is finding acid-reduced, lite-coffees and espresso popular.

I was taken to a coffee cafe by our German correspondent, Cornel Kuhrt. She told me the french style coffees are popular. I ordered a cafe au lait and received a huge soup bowl, no handles, with a heavily milked coffee. It was delicious, not strong as the European coffees usually are (and rightfully so), but almost every person in the cafe was drinking the same.

The Soluble Side to Germany

The Soluble Coffee Association was founded in 1959 to build a working group within the coffee industry, as soluble coffee manufacturing is a small portion of Germany's coffee market. President of the Soluble Coffee Roasters Association is JanRothfos, who is president of DEK (Deutsche Extrakt Kaffee).

Six manufacturing members make up the group of which three manufacture the majority of the group's soluble products. Manufacturers are only eligible for membership. The organization, belonging to AFCASOLE, which is the head of all soluble coffee associations within EC, discusses EC regulations, specific directives on solubilization and international regulations on manufacturing soluble coffee, and gather statistical information on the soluble market.

The association determines for the industry: issues concerning food regulations, waste management, and other questions pertinant to the soluble industry. The soluble market accounts for only 10%, with the remainder of coffee consumed being roast& ground. Consumer prices for soluble and R&G are about equal in all of Germany but in the East, they have to become acquainted with soluble. Germany exports more soluble than they consume (1990: Export 16,000; consumption 12,500).

The German soluble industry has experienced some political problems with the U.S. in that soluble exports to the U.S. have an extra ad valoreum tax versus any other kind of coffee that is not taxed in the export trade.

Proclamation 5759 was effected by the U.S. on December 24, 1987 which increased the ad valorem duty to 100% on EC soluble coffee and various other EC products such as beef, pork, lamb, tomatoes, fruit juices, etc. as retaliation against a ban on importation of hormone treated U.S. beef. The ad valorem tax has been lifted for some EC items, but it remains in effect regarding soluble coffee. The German trade feels it should be lifted.

In reality, the tax is effectively a ban which only affects two, maybe three European companies, all German; Suwelack, DEK, and Kaffee Hag. (Hag belongs to Jacobs Suchard/GF and produces the original Kaffee Hag in Bremen which was exported to the U.S.) There are other soluble coffee manufacturers but they are not really affected by the tax.

Suwelack and DEK who exported to the U.S. have no other production facilities. It is these firms that somehow got lost in the bureaucratic entanglement of nations penalizing one another.

It can be argued that coffee has nothing to do with cattle and that it is not even an European product. There is a health controversy over using growth hormones on beef. There is no health controversy over soluble coffee. The trade has pleaded with the government not to punish a non-controversial unrelated product with no political or economic clout.

The Soluble Coffee Association of Germany and similar European Associations have appealed to the EC officials and the U.S. authorities to repeal the tax. Efforts have thus far been uneffective.


Driving through the Hamburg streets was no treat for me as I struggled to follow the map and read the street signs that changed its name every three/four blocks So, it was with great pleasure that a thoughtful man from Halyssen & Lyon drove me to KVW. Standing high amongst the many buildings that made up the Billbrook Industrial Park, loomed the decaffeination facility of Kaffee Veredelungs Werke (KVW as it is known). This truly was the highest single facility I've seen for decaffeination plants and I can well understand its size as almost the entire world comes to Germany for decaffeination purposes.

KVW treats green coffee for decaffeination. Its mostly processes green coffee with the solvent, methylene chloride, and has recently started decaffeinating with ethyl acetate.

Its president, Peter Frey, is a busy man, but was able to fit me into his lunch plans at a nice German steak pub. He helped explain how the methylene chloride decaffeination process does not strip the coffee of its taste, but does succeed in stripping almost all the caffeine.

KVW decaffeinates approximately 20,000 tons of green coffee a year, and in turn, resells the purified caffeine to the beverage industry. Its main customer distribution is Germany, surrounding countries, and the U.S. The U.S. is especially a good market for KVW as not only does the company decaffeinate for large roasters, but also the gourmet trade. Frey claims this solvent process has been excellent with specific specialty origins. The firm's largest clients come from Europe, of course, the U.S. and Japan.

The decaffeinated market spurted in the late 70's/early 80's and demand exceeded supply. Now there is a worldwide oversupply of decaf coffee suppliers, two different decaffeinators sadly stated. Schaffhausen, Switzerland closed because Jacobs already had a huge decaf plant in Bremen which met all their needs, and Schaffhausen had old equipment. Industry consolidation has closed some facilities down while making opportunities for others.
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Title Annotation:coffee marketing in Germany
Author:McCabe, Jane
Publication:Tea & Coffee Trade Journal
Date:Feb 1, 1992
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