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Soluble coffee: convenience and better quality contribute to growth.

Soluble coffee, better known as instant coffee by the consuming public, is the quieter sibling of the popular specialty coffee segment. It does not command the limelight; increases and decreases in its sales volume are not followed as closely; and the nouveau coffee connoisseurs who so delight in their specialty coffees really do not consider instant coffee "real" coffee.

According to the 1997 Winter Coffee Drinking Survey published by the National Coffee Association of the U.S.A., consumption of soluble coffee has increased 1% over 1996. In 1996, soluble coffee accounted for 12% of overall consumption; in 1997, it had risen to 13% of overall consumption. Curious as to how this slight increase in consumption in the U.S. might compare with soluble consumption in other countries, I contacted various manufacturers and asked them for their insights into soluble consumption worldwide.

Of the companies I contacted, four manufacture soluble and / or freeze-dried coffees (Cafes Solubles De Veracruz, Care Soluble S.A., Decaf S.A., and Deutsche Extrakt Kaffee GMBH). The fifth company, America's Food Technologies, Inc. (AMFOTEK), is a privately held, dry mix blending and packaging operation specializing in the foodservice and custom private label areas. You might be surprised at their responses.

Increased Consumption of Soluble Coffee in the U.S.

Convenience and better quality products were two reasons cited as contributing to the growth of soluble coffee in the U.S. Gabriel Bobadilla Muguira, export manager of Cafes Solubles De Veracruz, explains, "The increase of instant coffee consumption in the U.S. is due to it being a convenience beverage." Muguira thinks that during the current busy times, people do not have time to prepare roasted and ground coffee at home, and instant coffee provides a quick and easy alternative. Muguira also credits the increase in quality of instant coffee with helping this product category grow.

Fernando Rey, commercial manager of Decafe S.A., considers the gourmet trend in the U.S. a contributing factor to the increase in the consumption of soluble coffee: "The quality trend of gourmet coffees has helped increase the awareness of the consumer that coffee is a healthy product. Unfortunately they cannot find these products (gourmet coffees) on the supermarket shelves. This is sending new consumers to high-quality soluble products such as freeze-dried which are readily available."

Bernd Zwengel, advertising manager of Deutsche Extrakt Kaffee, thinks instant coffee consumption is decreasing in the U.S. and credits this decrease to the "poor" quality of instant coffee in this market.

Ellen Jordan Reidy, president of AMFOTEK, thinks the increase in consumption of the soluble coffee product category is "attributable to its use as a constituent ingredient of other products (cappuccino, granitas, etc.) that are tremendously popular and not due to its consumption as a coffee beverage."

Instant Cappuccino As a Growth Category

Instant cappuccino, a sweet, milky, instant coffee beverage, has been a huge growth category both in the U.S. and in other countries. Since one ingredient in the dry mix is instant coffee, its growing popularity cannot help but drive up the overall consumption of soluble coffee. Of the manufacturers contacted, all considered instant cappuccino a stable growth category and not a fad.

Gabriel Bobadilla Muguira thinks the popularity of instant cappuccino will continue to increase, and doesn't think this product category alone is the reason soluble coffee consumption has continued to grow. Muguira definitely thinks the use of soluble products in cappuccino products is a contributing factor but also points out that their ready availability in vending machines, bakery products, and other uses have "helped the instant coffee market continue to grow."

Bernd Zwengel believes "instant cappuccino is growing all over the world, especially in Europe and particularly in Germany." He thinks the primary reason is convenience, but thinks the growth will continue in the future because "above average users (of the product) are younger people." His company, Deutsche Extrakt Kaffe believes so strongly in this trend, in July of this year, they relaunched their Cappuccino - Range GRANDOS product.

Fernando Rey does not consider instant cappuccino a fad but thinks "cappuccino consumption will slow (in) its growth as it has done in Germany." Rey is still optimistic about the longevity of the products because, as growth in one category may slow, there is still use of soluble coffees in other products such as cold ready-to-drink coffees and granitas. He reiterates, "cappuccino is not a fad."

Ellen Jordan Reidy agrees, "we feel very strongly that as evidenced by the continuing volume and market segment increases of the cappuccino product category, it has very evidently transcended any question that it is only a fad destined to 'crash and burn!' It is a mainstream, growing, and widely enjoyed trend that is still early in its product life cycle development."

Soluble Consumption Outside of The U.S.

Bernd Zwengel thinks soluble consumption is growing in countries other than the U.S. He explains, "In other parts of the world, Japan, China, Russia, Eastern Europe, Great Britain, and parts of Africa, instant coffee is experiencing a real growth. One reason for this is a change to fine quality, freeze-dried coffee. In Europe, except Great Britain, we register a stagnation (in growth) of soluble coffee."

Other countries are also prime consumers of instant coffee. Gerardo Baltodano of Cafe Soluble S.A. notes the Nicaraguan market consumes 360,000 kgs of instant coffee annually, and that the El Salvador market should represent three times that amount. Gabriel Bobadilla Muguira has noted growth in instant coffee consumption in Central America. "I don't have any statistics, but in my experience, I have noted growth. In Guatemala, the consumption of coffee used to be 20% instant and 80% roasted; but this situation has changed and it is more like 50% instant and 50% roasted."

Fernando Rey indicates, "in 1997, the trend (of soluble coffee consumption) in Western Europe was decreasing, both in quantity and quality, probably because of the erratic coffee market we had. In Germany, the per capita consumption dropped 3% and in the U.K., there was a 2.4% decline in consumption. Contrary to this trend, Central European Countries increased their imports and the quality of their soluble coffee. This is the case of Poland, where roasters like Tchibo were packing freeze-dried coffee especially for Russia. In Japan, imports of soluble coffees have increased more than 14% in the first quarter of 1998.

The Future of Soluble

Instant coffee has been a mainstay of many homes for decades and shows no signs of disappearing. As the different manufacturers noted, the convenience and versatility the product, along with its strides towards better quality, will cause it to experience continued growth. Instant coffee is used by itself, in granita and instant cappuccino mixes; it is combined with chocolate for an instant mocha - the possibilities are limited only by the imagination.

Although not widely available, certain special coffees are available in soluble form. Besides the ever-present Colombian coffee, I have personally seen Kenya instant coffee, and more and more flavored coffees are available in instant format. Instant, convenient, versions of these coffees are perfect for those who want to be specialty coffee drinkers in spirit if not by actual consumption. As the quality and variety of the products improve, so will the overall consumption, and new and better marketing plans and advertising campaigns will have to focus on repositioning the product in the U.S. from a convenience product to a product of choice that is convenient.


AMFOTEK - America's Food Technologies, Inc., 12520 S. Lombard Lane, Alsip, Illinois 60808. Tel: (1)(708) 489-1226, Fax: (1)(708) 489-1208. Ellen Jordan Reidy, president.

Cafes Solubles De Veracruz, S.A. DE C.V., Prolongacion Av 3 S/N Col. San Cayetano, Zona Industrial, 94690 Cordoba, Veracruz, Mexico. Tel: (52)(271) 4-47-50, Fax:(52)(271) 4-75-88, E-Mail: Gabriel Bobadilla Muguira, export manager.

Cafe Soluble S.A., Km 8 1/2 Carretera Norte, Managua, Nicaragua. Tel: (505) 263-1270, Fax: (505) 263-1195, E-Mail: Gerardo Baltodano, director.

Decafe S.A., Kilometro 10 via al Magdalena, Apartado Aereo 2699, Manizales, Colombia. Tel: (57) 6874 7410, Fax: (57) 6874 7477, E-Mail: Fernando Rey, commercial manager.

Deutsche Extrakt Kaffee GMBH, Buschwerder Hauptdeich 10, 21107 Hamburg, Germany. Tel: (49)(40) 753 040, Fax: (49)(40) 753 044 17, E-Mail: Bernd Zwengel, advertising manager.

Shea Sturdivant is a past officer of the Specialty Coffee Association of America, a partner in the Coffee Associates, an international consulting firm, and chairperson of the Business Administration/Marketing Department of Bauder College in Atlanta, Georgia. You may fax her at (770) 643-9425. While she enjoys hearing about your company and products, she cannot answer each inquiry personally.
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Author:Sturdivant, Shea
Publication:Tea & Coffee Trade Journal
Article Type:Column
Date:Oct 1, 1998
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