Robusta coffee poised to overtake arabica, industry veteran says

Robusta is poised to overtake arabica as the more produced, and drunk coffee, the former chief executive of industry giant Neumann Kaffee Gruppe said, citing lower production costs and growth in countries with stable economic records.

Robusta coffee - which accounted for just 13% of world coffee production in 1950, with the balance arabica beans – has already raised its share to 45%, as of 2015, said Michael Neumann, whose father Hanns founded the German-based Neumann group.

By 2030, robusta will account for 55% of world volumes – with its growth helping meet the challenge of coffee consumption which he forecast then reaching 200m bags, some 50m bags more than current volumes.

Besides being spurred by a growing world population, coffee drinking is being lifted by an increased taste for coffee, forecast to increase to 1.43 kilogrammes per capita in 15 years' time, from 1.2 kilogrammes per capita today.

Macro-economic factors

Robusta strengthened grip on the world coffee trade stems in part from its adoption by countries, such as Vietnam, which have a stable exchange rate, cushioning price volatility in sales and purchases for growers.

Vietnam has grown into the world's second-ranked coffee producing country, after being encouraged - following the collapse of Soviet Union which it had looked to for support - by the World Bank to get into robusta plantations "big time".

Meanwhile, many arabica-growing countries have suffered "crisis", which has helped slow growth in Central America and send it into reverse in Africa, which will continue to "accentuate the trend away from arabica towards robusta", Mr Neumann told the Global Coffee Forum in Milan.

Furthermore, coffee growers and roasters have achieved a "significant improvement" in the quality of robusta, which has historically been seen as inferior to arabica beans on this score.

'Built-in advantage'

And robusta also has a "built-in advantage" over arabica in financial terms in that its cost of production is significantly lower, said Mr Neumann, who succeeded his father as chief executive of Neumann group, a position he held until 2004.

The typical arabica coffee farmer ground around 3,000 trees per hectare, and obtains a yield of some 1.5-2 tonnes per hectare.

However, robusta growers obtain a higher yield, of 2.5-4 tonnes per hectare, from a lower tree density, of about 1,000-1,500 per hectare.

Robusta works out cheaper to grow by some $0.60 per pound, or $1,300 per tonne, he said.

Demand forces

Coffee drinking since 1950 has increased from some 30m bags, 0.88 kilogrammes per head, thanks in part to the reconstruction of Europe following World War II, but also the collapse of the Soviet Union, "when we saw many markets open up".

"Asia became a leading consumer, and producing countries discovered the beverage," said Mr Neumann, who is now chairman of the trustees for Hanns R Neumann Stiftung, a foundation concerns with improving the competitiveness and living conditions for smallholder coffee farmers.

During his time as head of Neuman group, he oversaw the acquisition of rival Bernhard Rothfos in 1988 to form the Neumann Kaffee Gruppe the company trades as today.