Market Experts Say We Could Be Running Out of Coffee

According to market analysts, Britain’s increased consumption of coffee has created a “structural imbalance” between supply and demand that could lead to an imminent coffee shortage.

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Jan 4 2016, 1:00pm

It's the first Monday back after Christmas. Pigs-in-blankets, chocolate selection boxes, and being drunk in front of the telly at 3 PM are but a distant memory. Don't lie: how many cups of coffee have you had today? More than the amount recommended by physicians and health experts? Enough to give you the slightly stunned look of a person who would quite like to be wearing pyjamas but not enough to make clearing your inbox seem like an achievable task? Thought so.

Everyone's favourite caffeinated beverage may seem to be infallible in its ability to move you from duvet cocoon to AM meeting but some are warning that it could be facing an imminent shortage.

As The Daily Telegraph reports, according to food and drink market analysts Allegra Group, Britain's increased consumption of coffee has created a "structural imbalance" between supply and demand that could lead to a shortage of high quality coffee within the next three to five years.

Allegra Group managing director Jeffrey Young warned that "the rising tide of quality that has been keeping this industry alive" could be unsustainable.

He added: "This thirst for high quality coffee means that production is not keeping up with demand at a global scale so stocks have been declining."

READ MORE: Why a Cup of Coffee Sounds Like Brian Eno

Britain's growing love for a good cup of joe has been driven by a rising number of coffee shops, both the independent, bearded barista-staffed cafes and the nationwide chains cashing in on our inability to get through Monday morning commutes without a caffeine hit. The number of coffee shops rose to more than 20,000 in 2015, achieving sales of £7.9 billion. The EU as a whole also accounts for nearly half of the world's coffee bean imports and is expected to import 400,000 more bags this year.

The problem doesn't just lie in the fact that we're drinking more coffee, but that we've developed a palate for good quality stuff with a high coffee content (looking at you, piccolo latte-sipping millennial).

Young said: "Britain is becoming a nation of coffee connoisseurs—like wine, people want to learn about how it's made and how to taste it. But unlike with wine farmers or other high value commodities, we've effectively got people living in poor regions in the tropics and they take what they can get."

As The Telegraph notes, the high quality coffee we've become accustomed to tends to be made from Arabica beans, often grown on small, high altitude farms with a very low yield. These farms are dotted around Latin America and Ethiopia, meaning the market is fragmented and producers have very little supplier power.

READ MORE: Vietnamese Iced Coffee Is the Only Way to Cure Jetlag

As a result, according to commodities research firm Mintec, the price of Arabica coffee has fallen by 35 percent over the last year. Another report from Bloomberg shows that the prices of Arabica beans fell by nearly 30 percent this year to $1.1915 a pound, causing the average retail price to fall to $4.412 a pound in November—the lowest price since February 2011. Global warming poses another threat to our flat white consumption, with some experts warning it could threaten a quarter of output in Brazil, the world's largest coffee producer.

Young added: "Coffee prices, in real terms, haven't gone up in years so it is becoming less worthy of farmers' time to grow coffee."

So, sip that double shot, extra hot, almond milk mochaccino slowly—its days could be numbered.

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