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Solubles: hope has not dissolved.

The soluble coffee is a vital segment of the coffee market ecosystem. Not only does it provide an outlet and a market fur less expensive coffees, but it also supplies a coffee-based beverage to those that might not, or could not, otherwise drink coffee. The market in the UK after World War II is an example of this in that soluble coffee provided an affordable beverage that could be prepared in a similar manner to tea. Presently, other markets, thus far unfamiliar with coffee, are slowly adopting coffee thanks to the low price and convenience of soluble coffee. Examples of this currently include many Asian countries, however, 15 years ago, solubles were one of the most sought after consumer goods in much of Eastern Europe and the former Soviet Union. They were not so much breaking new ground in that case, but fulfilling pent-up demand, and allowing several significant markets to finally mature.

To many in the trade, however, soluble coffee is really a separate business, a commodity made from coffee, but otherwise a separate category. On the grocery store shelf it is marketed near to the ground and whole bean coffee--but not next to it. The plants that produce soluble coffee use green coffee as their raw material but the product they produce is packaged, marketed and consumed differently. Further, most "roast & ground" participants in the industry look down on the soluble category and do their best to avoid it. One coffee trader, associated with a soluble producer, would not comment for this article because, "I've avoided soluble coffee for 30 years and I am not about to change that now, talk to someone else!"

Fortunately for the coffee industry as a whole, those in the soluble trade take a more "live and let live" approach. Ii1 doing so, they find a market for coffees that the "R&G" folks would be hard pressed to do, and, in the meantime, open markets those same folks can participate in later on. This dynamic was verified by the comments of Simon Wakefield, Managing Director of London-based D.R. Wakefiield & Company, Limited, who touched upon the dynamics of the soluble market in the UK saying the market here is estimated at 85% soluble. We do see a conversion of the instant market to R&G largely because people are buying "take-out" coffee from from places like Starbucks or Costa, liking it, and then buying beans or ground coffee to make at home and demanding fresh office coffee. In addition, in this market, supermarkets are trying to improve the quality of the products that they offer and the consumer is becoming more aware of what quality they can buy. Further, with all the health scares we've had, people want to know what they're eating and drinking, they want to be more involved with the things they consume, and an R&G product achieves this for them." Despite this healthy dynamic, however, Wakefield sees the overall market for coffee (soluble and R&G) in the UK stagnating to slowly decreasing, "We're losing out to soda pop and mineral water especially in the unusual but weathe this year. Overall, I see tremendous opportunity, nonetheless, because we (the R&G side) have all the soluble drinkers to convert." This opportunity might not be there today if soluble coffee had not been in the market for the past 50+ plus years.

In light of the essential role (assuming the case has been made!) we solicited the comments of two soluble coffee veterans to get their take on the current status of the soluble market from their perspective. The viewpoint provided, in both cases, given the vantage point of their experience and current roles, was both broad and informed. In this article, Part One of a two-part series, we include the comments of Roel Vaessen. In the next installment we will feature the observations of Roberto Devienne of Delcafe.

Roel Vaessen, is the secretary general of AFCASOLE (Association des Fabricants de Cafe Solubles des Pays de la Communaute Economique Europeenne/Association of Soluble Coffee Manufacturers of the European Union). This association represents the European soluble coffee manufacturing industry. He also holds the same title in the European Coffee Federation (ECF), which is the umbrella organization. Vaessen offered some of his thoughts on the state of the soluble industry in Europe.

Based in the Netherlands, Vaessen begins by discussing the overall picture of the soluble market in Europe, "The picture within Europe is mixed. You will see a country like the UK where soluble coffee still dominates the in-home market. About 90% of in-home consumption is in soluble coffee." But on the other end of the scale, in some other European countries there is negligible consumption.

Vaessen attributes the mixed market to both tradition and habit. "The UK is a traditional tea drinking country and the soluble coffee preparation is more in line with what they were used to in preparing tea. In a way, you see the same phenomenon in other countries." He notes that India and China, also traditional tea drinking countries, seem to respond more readily to drinking soluble coffee rather than roasted ground.

"In Europe, the filter brew methods (or in France and Italy, the espresso brew methods), are somewhat established," Vaessen explains. "The soluble coffee is really seen as a convenience product that you use if you don't have the time. You might use it to serve a soluble decaf if you had a group of people over for dinner and only one of them wanted decaf."

Niche markets seem to be developing overseas in this industry, catering to the younger audience. Single portion sashays with the mixes sugar and milk powder and other favors are doing well in the market. They go by a variety of names, Instant Cappuccino, for example. "That is a big success especially amongst the younger audience," Vaessen says. "They are called the 'new instants.' Some have flavors like hazelnut or chocolate." He is encouraged that there is a new market to explore among the younger audience.

Solubles also have a niche in the out-of-home markets where there is a certain amount of soluble used for large volume brewing. It is eminently suitable to produce large quantities of coffee in a short period of time. Whereas espresso machines, for instance, would not be able to cope with a large number of people showing up at a counter all at the same time.

Vaessen says new production technologies and the actual quality has improved beyond recognition, compared what it used to be. Another new, successful development includes the use of coffee automats and vending machines that use soluble.

According to Vaessen, some overall benefits of soluble coffee include the fact that it is a convenience and it is also an option that allows you to have a whole range of single portion sashays in your household. After dinner variations can be served to different people. "They've got these marvelous show boxes that contain five or six flavors or variants of these single portion sashays," Vaessen says. He predicts that Europe will continue to see more developments in this area.

As was stated at the outset, the soluble sector is essential to the health of the coffee market on a global basis as the Vaessen's comments bear out vis-a-vis Europe. In our next installment we will discuss the status of the soluble manufacturing base in Brazil and beyond. The case will be made that a healthy soluble market can provide help for the coffee industry in general out of the current price morass by opening new markets, now in Asia, as it has done again and again in other markets throughout the world.

Timothy J. Castle is the president of Castle Communications, a company specializing in marketing and public relations for the coffee and tea industries. He is also the co-author (with Joan Nielsen) of The Great Coffee Book, recently published by Ten Speed Press, and the author of The Perfect Cup (Perseus Books). He may be reached at: (310) 479-7370 or via E-mail at: qahwah@aol.com
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Title Annotation:instant coffee market
Author:Castle, Timothy J.
Publication:Tea & Coffee Trade Journal
Geographic Code:4EUUK
Date:Jan 20, 2004
Words:1347
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