Widespread of soluble coffee in Spain: historically, Spain was slow off the mark with coffee drinking, but has more than picked up over the years. Coffee there has evolved into one of the most varied and high quality markets in the world, and produced the third largest soluble industry in the European Union (EU), including manufactured soluble and imported soluble for packing and re-export.
In spite of its 17th-century novelty and innovative nature with coffee beverages, Spain had to overcome strong competition from taverns selling wine and brandy (Spanish Cognac), and other establishments selling a highly refreshing cold and white colored drink made from crushed tiger nuts called horchata. However, the keenest competition of all, and the biggest barrier preventing the adoption of coffee drinking in Spain, came from the country's obsession with a beverage made from cocoa.
During this time, cocoa and chocolate beverages had rapidly become the traditional drink in Spain. After all, it was the Spanish who discovered cocoa and its use by New World Indians way back in the 16th-century.
It wasn't until the early 19th-century that cafes opened in Spain, selling the beverage that Spaniards had come to regard as a 'foreign' drink. Coffee became the drink of Spanish trendsetters, especially among intellectual forward thinkers (including political revolutionaries) who plotted the future of Spain over steaming cups of coffee in cafes throughout cities like Barcelona, Granada and Madrid.
By the end of the 19th-century, cafes vastly outnumbered traditional 'chocolate' shops and the 20th century cities of Spain took their rightful place in Europe. Coffee houses and cafes were finally predominant and pre-eminent in Spain.
Widespread Spanish Coffee
'Wide' is the word that comes to mind when referring to choices of coffee available in Spain. The spectrum of coffee types available in cafes and bars from espresso machines are truly remarkable.
Mainstream in Spanish coffee drinking is the small-cup local espresso or 'cafe solo' served black and strong, or 'cafe doble' if a double dose of the strong stuff is called for. All milk coffee (cafe con leche) is equally popular and usually drunk by Spaniards at breakfast. Short black coffee with a drop of milk is called 'cafe cortado,' or at the other extreme is 'cafe manchada,' which is steamed milk splashed, spotted and stained with a minute amount of coffee. 'Cafe suizo' is coffee topped with whipped cream, and 'cafe caramel' has a squirt of condensed milk. Spain has also managed to bring the best of its taverns into the coffee house by offering 'cafe carajillo,' which is black coffee fortified with a drop of spirit, such as anisette, Spanish cognac (brandy) or rum. This hugely different and innovative choice of cafe beverage is just the tip of a coffee choice the 'iceberg' in Spain.
Last but not least, the Spanish coffee market is notable for use of 'mezclas.' These are blends of regular coffee and 'torrefacto,' the latter made by roasting coffee with sugar, and account for about half of the market.
When it comes to describing soluble coffee in Spain, in relation to product range, manufactured volume and export markets, the most appropriate words are breadth and depth. Spanish people do not drink an awful lot of soluble coffee themselves--less than 17% of the total domestic coffee market is accounted as soluble--but Spain manufactures make a huge tonnage of soluble coffee for export throughout the world.
By juggling the various import and export figures and breaking down green coffee imports into coffee type and origin, one can notice the importance of soluble coffee manufacturing and trading in Spain.
Up until 1980, the Spanish coffee market was highly regulated with green coffee bean imports of 1979 (just over 1.8 million 60-kg bags), and minimal import or export of processed coffee. Franco had at last died and under his authoritarian government, many business sectors were controlled by state owned, controlled or regulated companies. In Spain it meant tight control on prices, ground coffee was not allowed, and only a very few companies were licensed to import. As the new Spain emerged, in 1980, the old Franco coffee regulations (controls) were lifted. Suddenly an entire field of new coffee importing companies were formed, roasters could set prices, grind coffee, package as they wished. Coffee roasters formed consortiums to grind and vacuum pack, etc.
By 1999, green coffee imports into Spain had doubled to 3.63 million bags, and have risen steadily ever since, topping 4.0 million bags for the first time in 2005 (Table 1). Patterns in processed coffee manufacture and trading have changed out of all proportion too. In 2005, approximately 163,000 tons of processed coffee was produced, with almost 34,000 tons encompassing soluble coffee (extracts, essences and concentrates of coffee in solid form including instant coffee). Overall, more than 20,000 tons was exported.
Like Germany, Spain manufactures a lot of soluble coffee, but prefers to drink R & G, giving other EU members and consuming countries the benefit from its soluble coffee production, which rang up a value of 181 million Euros in 2005. Spanish soluble consumption in the home and food service sectors was 9,870 tons and 2,120 tons, respectively (2005). At the same time, consumption per capita at 4.03-kg (green coffee equivalent/year) is in the middle range for EU countries, half of that in some Scandinavian countries, but almost twice the level of the U.K.
Neighboring Portugal is a significant importer, receiving 69% of its entire soluble coffee imports from Spain in 2005, with the remainder being sourced from France. As new EU members spread across the eastern half of Europe, they are taking a significant volume of Spanish soluble. The Czech Republic and Hungary, for example, imported 1,714 tons and 616 tons, respectively, in 2005 (Table 3). Germany is the number one supplier of soluble coffee to these countries, and Poland is the single biggest importer of soluble from any source amongst the 'new' EU entrants.
Spanish soluble coffee exports for 2005 stood at 21,737 tons, but they are more correctly described as soluble coffee exports from Spain. This is because Spain continues to import considerable quantities of soluble from other countries for packing and re-export. Soluble coffee imports into Spain also come from other EU members and countries, including green coffee producing countries like Brazil, Colombia, Ecuador and India. Spain imported 4,154 tons of soluble coffee in 2005, and approximately 20% of soluble exports for the same year.
Spain, which was a prime market for bulk Brazilian soluble, packed and re-exported mostly for the private label market. Bruno Giestas of Realcafe Soluvel do Brasil recalls how, until just several years ago, Spain was second only to Germany (within the EU) for importation of Brazilian soluble. However, the unfavorable exchange rate for the Brazilian Rial with the U.S. Dollar, and increasing cost of Brazilian Robusta Conilon (for practical purposes, the only Robusta resource for Brazilian soluble manufacturers) has corroded their competitiveness. According to Bruno, the arrival of the 9% EC tariff on Brazilian soluble on January 1, 2006 effectively also hit this market hard. Especially since Spain's soluble packers and traders mostly supply the supermarket's own brand label products, and therefore 'live or die' on cut-price deals in such a cutthroat market.
The prime position of soluble manufacture in this southern European country of mostly R&G drinkers is clearly indicated in the Robusta/Arabica split for green coffee bean imports into Spain, which stood at 56/44% in 2001, and widening to 61/39% by 2005. While the share of green coffee bean imports apportioned to individual origin countries throws up even more interesting trends.
The Spanish coffee industry clearly knows its own mind when sourcing green coffee, because just five origins (Vietnam, Brazil, Uganda, Cote D'Ivoire and Colombia) have traditionally accounted for around 80% of total imports. This situation (where handful of key origins supply virtually the whole market in Spain) sharpened in 2005, when the established 'favored five' plus relative newcomer India took no less than 92.4% of Spain's green coffee imports (Table 2).
This relatively narrow spectrum of green coffee resources is in complete contrast to Germany where 92% of green coffee imports are shared between 14 different origins! To be fair, a detailed look at 2005 green coffee imports into Spain does reveal imports from 30 different origin countries, but some are so tiny it is doubtful whether they would even furnish many cups of 'manchada', the Spanish specialty comprising a few 'grains' of coffee in 'steamed milk'. For instance, 2005 imports (January-June) from Mexico and Ecuador were the equivalent of less than 2000 bags from each country and less than 400 bags were imported from Panama.
Vietnam, Uganda, Cote d'Ivoire and India accounted for most of the Robusta market share in Spain, the remainder coming from Indonesia and Cameroon with a sprinkling from Angola and Togo. Price paid indicates almost all Brazilian coffee imports were Arabica (Brazilian naturals).
In 2005, the EU (25 countries) imported over 46 million bags of green coffee of which just over 4 million went into Spain as the third biggest single EU country importer behind Germany and Italy. Breakdown by origin for the EU 25 showed Brazilian (mostly Brazilian naturals--Arabica]) taking 29.2% and Robusta sourced from Vietnam 17.6% of the market.
Imports into Spain show Brazilian Arabica and Vietnamese Robusta shares are almost exactly reversed from the EU average at 18.9% and 35.5% respectively. This is similar to the situation seen in corresponding U.K. figures and what you would expect for another of the big EU soluble manufacturers, only difference being that unlike Spain the British drink most of what they manufacture. Vietnam took 34.2% and Brazil 20.7% of U.K. green coffee imports in 2004.
The picture from Italy and Netherlands where soluble manufacture is small in relation to production of roasted coffee shows respective share taken by Brazilian Arabica and Robusta from Vietnam is more akin to the EU 25 average. Brazilian Arabica takes 36% and 23% and Vietnam Robusta 14-13% of green coffee imports entering, respectively, Italy and Netherlands.
Manufacture and Trading
Synonymous with Spain and soluble coffee is Seda Solubles S.L. celebrating a 50th anniversary this year and continuing to display some depth and spread in the soluble market which 'hallmarks' Spanish coffee in general. Seda has passed many milestones since releasing its first own brand of 100% instant coffee in 1957. First manufacture of private label coffee in 1963 sowed the seeds in today's ranking as a top source for private label contract packaging in the soluble sector, especially in the cutthroat competitiveness of supermarket store brands.
Own brand (private label) of instant coffee granules arrived in 1970 and dedicated decaffeination facilities in 1975, but 2003 was the year when big soluble market opportunities were snapped up and satisfied by significant new development and expansion.
These were targeted at each end of the 'bi-polar' European soluble market where U.K. and Russia totally dominate soluble consumption with 80 and 90% of all coffee consumed in these respective countries being instant (soluble) formulations. European manufacturers, packers and traders in soluble coffee who are not well embedded in these markets where instant coffee is a 'way of life' go 'nowhere.'
In the fast moving Russian market, Seda created and set in motion 'Interseda' a 'state of the art' packing plant located in Moscow, capital of Europe's biggest country, supporting 140 million people and where '9 out of every 10' cups of coffee drunk are of the instant variety. 'Interseda' was initially designed with a packing capacity of at least 4,000 tons per year and equipped with two new and modern packing lines utilizing a wide-range of bottle and jar formats.
Russia is still reacting and responding to liberalization with an increasing thirst for high quality coffee. In spite of the 'soluble stranglehold' on coffee consumption, many argue that everything is there to play for in Russia. Articles regularly report the rise of Russian R&G but soluble still reigns supreme, especially with middle class and working Russians with money in their pockets to spend. Russia imported 14,816 tons of soluble coffee from EU countries in 2005, which represented 27.9% of total EU soluble exports to non-EU destinations for that year. Seda Solubles S.L. through its Russian 'subsidiary' 'Interseda' is on-location and on-hand to maintain its share of this trade.
Focus and action by Seda on the supremely strong private label U.K. market was even sharper and wider. Alliance Coffee Company (ACC) was developed in 2003 as a joint venture between Seda Solubles S.L. and Cia Iguacu de Cafe Soluvel to supply solutions for clients in the U.K.'s large own label (private label) market estimated at over 7,000 tons. The new venture was announced by emphasising total control of production process from raw material to packaging, a full range of instant coffee formulations (spray dried powders, agglomerated granules, freeze-dried and mixes) and an annual capacity of 30,000 tons.
By claiming not to be brand owners ACC said there would be no conflict of interest with their clients. In summer 2005, ACC general manager Tom Delaney told Private Label International, "The only brand we feel we own is our customers. We have no conflicts of interest with our customers and therefore we can invest all of our time and effort developing their brand."
In that same year, ACC announced a new freeze dried coffee plant at the Seda headquarters in Palencia, Spain, adding an extra 4,000 tons capacity and claiming to make ACC the largest producer of soluble coffee for the private label market anywhere in the world. In spite of price competitiveness, the U.K. private label market has a poor record on innovation. Industry watchers have suggested ACC with Spanish and Brazilian influence could bring much needed Latin flair and excitement to the otherwise stodgy and slightly stagnant U.K. private label coffee market.
Seda Soluble at Home
Spain makes makes a significant amount of soluble, but drinks few, which accounts for less than 17% of total Spanish consumption. Nevertheless, the figure is close to the estimated world importer country's average of 18%. This is also measurably more than many other EU countries, including Germany, where soluble consumption is still at only around 9.0% even after a steady, slow climb over the last decade.
Spanish data tends to hide the high consumption of decaffeinated coffee products. On a proportion basis, Spain is the biggest consumer of decaffeinated coffee in Europe and probably the world. Decaf as a percentage of total consumption is respectably high in a clutch of other countries. Estimates in 2005 were 13% (U.K.), 12% (Benelux countries and U.S.) and 9-10% (Austria and Germany) but Spain on 17% was head and shoulders above the rest. Spanish production of roasted decaffeinated coffee is accordingly high at 14,085 tons (2005) and second only to Germany. Decaffeinated instant coffee features prominently within the wider spectrum of soluble coffee consumed in Spain.
Facts and figures apart, wide availability of decaf coffee in Spanish cafes and bars are evident from comments made by 'coffee connoisseurs' traveling around the country. 'Cafe descafeinado' is widely available they say but complain that the decaffeinated coffee beverage is usually made and served (unless otherwise requested) as decaf instant granules in steamed milk. Those averse to instant for 'instant's sake' are advised to specificaly ask for 'Cafe descafeinado de maquina' (decaffeinated filter coffee).
Be that as it may Spanish coffee drinkers clearly relish their decaf however it comes and Seda has always catered for this strong segment of the home market with a representative range of own brand decaf instant products. These include 'Pure Decaffeinated Instant Coffee Powder and Granules,' 'Pure Decaffeinated Freeze Dried Instant Coffee' and 'Cappuchino Decaffeinated.' Decaf soluble manufacture was always strong for this home market but has slackened slightly in recent years as soluble exports as a proportion of total soluble production have pushed beyond the 70% level.
Why decaf consumption should be high in Spain is not altogether clear. Maybe deep down Spaniards have never gotten over their country's historical love affair with the perceived calming qualities of cocoa based beverages and don't want to be over-stimulated by coffee. Like coffee drinkers worldwide those in Spain are bombarded with a steady barrage of health related coffee information mostly related to caffeine and predominantly negative, although many industry watchers believe caffeine concern is becoming a spent force.
Even if Spanish coffee drinkers are not particularly conscious of alleged negative health implications of caffeine and simply like the taste of decaf, Seda Solubles S.L. is definitely conscious of the current focus of economic, social and environmental issues that surround coffee production in origin countries. The company is a founder member of 'Cafemundi' a non-profit organization devoted to the development and set up of social sustainability plans in coffee producing countries.
Dr. Terry Mabbett has been covering the tea, coffee and cocoa industries for decades. He resides in England.
He is a technical writer with a PhD degree in Tropical Agriculture. He has worked in crop production and processing throughout the tropics- India, South East Asia, West Africa and the Caribbean--and in his home country of the U.K. Dr. Mabbett has been writing professionally for over 20 years.
Table 1: Imports of Green Coffee into Spain from 1996 to 2005 * Year amount (number of 60 kg bags) 1996 3,270,741 1997 3,490,161 1998 3,483,274 1999 3,633,701 2000 3,511,108 2001 3,772,666 2002 3,681,934 2003 3,785,850 2004 3,770,856 2005 4,020,600 * Source: Spanish Coffee Federation Table 2: Partition by Percentage of Green Coffee Imports into Spain by Top Six Origins * Origin County 2001 2002 2003 2004 2005 Vietnam 29.3 26.5 25.4 34.3 35.5 Brazil 18.1 26.3 22.3 17.6 18.9 Uganda 10.1 12.5 13.1 9.3 8.1 Colombia 6.3 6.9 7.3 6.4 5.9 Cote d'Ivoire 8.0 4.1 6.2 6.1 7.7 India -- -- -- 6.2 4.3 Remainder 22.9 19.1 19.9 20.2 7.6 * Source: Spanish Coffee Federation Table 3 Snapshot of Spanish soluble coffee in 2005 ** Robusta as a percentage of total green 69% coffee imports Robusta green coffee imports from Vietnam 1.43 million bags Percent of total green coffee imports 35.5% Change since 2001 + 6.2% Soluble production--volume 33,954 metric tons * Soluble production--value 181 million euros * Per capita consumption total coffee 4.03/year GBE Soluble consumption 11,990 metric tons Soluble as proportion of total coffee 16.72% consumption Soluble exports 21,011 metric tons Soluble exports to Portugal 616 metric tons Percent of total soluble imports into 69% Portugal Soluble exports to Czech Republic 1,714 metric tons Percent of total soluble imports into 17.61% Czech Republic Soluble exports to Hungary 616 metric tons Percent of total soluble imports into Hungary 8.1% Soluble imports 4,154 metric tons * Extracts, essences and concentrates of coffee in solid form including instant coffee GBE--Green bean equivalent, ** Source--European Coffee Report 2005; European Coffee Federation
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|Title Annotation:||Soluble Coffee|
|Comment:||Widespread of soluble coffee in Spain: historically, Spain was slow off the mark with coffee drinking, but has more than picked up over the years.|
|Publication:||Tea & Coffee Trade Journal|
|Article Type:||Industry overview|
|Date:||May 1, 2007|
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