COFFEE DRINKING HABITS IN SELECTED COUNTRIES5

The Portuguese are most likely to drink their coffee outside the home.

Although it is the largestconsumer of coffee, theU.S. has a fairly low percapita consumption.

90

100

80

70

60

50

40

30

20

10

0

50100 20 30 40

The typical Finn consumes 12.1 kgs, about six cups of coffee a day.

U.S.

GermanyJapan

France

Italy

Russia

Spain

Portugal

U.K.

Turkey

Poland

Ukraine

The Netherlands

SwedenFinland

Switzerland

Greece

Austria

Belgium

Denmark

Norway

Coffee is a supremely social beverage, and people in different countries and regions tend to differ not only in how much they drink, but in what they drink and where. In Eastern Europe, the U.S., Germany, and France, the majority of coffee is consumed at home, but in the café cultures of the Iberian Peninsula, the split is more even

% R

oas

ted

co

ffee

% In

stan

t co

ffee

% Drinking outside the home

5 The selection of importing countries by the International Coffee Organization is based on the following criteria: an average national consumption of at least 2.5 millionbags during the period covered by the study, based on information received from members, and the availability of statistical data. 2010 data are used for this chart.

Source: International Coffee Organization

between at-home and out-of-home consumption.Another major cultural divide is between instant and fresh-brewed coffee. Although instant coffee is stilldominant in markets such as the U.K. and Russia, fresh-roasted coffee has become more and more prevalent in the past decade in the U.S., Japan, and Brazil.

Annualconsumption(in millions of bags)

20

105

Per capita consumption(in kgs/year)

10.1—12.5

7.6—10.0

5.1—7.5

2.6—5.0

0—2.5

Cafés and coffee shops are only just beginning to arrive in these former Soviet Union countries.

Traditional Turkish coffee is laborious to make, lead-ing more people towards instant coffee.

10

0

20

30

40

50

60

70

80

90

100

Coffee Cultures

ExportImport

CoffeeTea

102 78448 70

42 5478 36

50 60413 48

69 68218 65

81 70517

’07

’08

’09 51

’06

’10

ANNUAL TRADE (in millions of U.S. dollars)

MARKET SHARE STARBUCKS GROWTH IN CHINA In 2009, nearly 99 percent of the coffee consumed in China was instant. Instant coffee giants Nestlé and Kraft controlled 82 percent of the market.

Nestlé68%

Kraft14%

Others18%

Instant99%

Roasted1%

is still one of the smallest coffee consumers. And while domestic coffee production in southern China is growing, the country currently exports more than it consumes.

The U.S. is the world’s largest market for coffee, but China is thought to be its largest potential market. Despite having 20 percent of the world’s population, the country

Premium coffee retailers such as Starbucks have been making inroads in urban areas. Starbucks is currently opening an average of one new store every four days in China, with plans to increase that pace in 2012.

China: Coffee’s Untapped Market

Although expected to soon be surpassed by Brazil as the world’s largest coffee consumer, the United States remains the world’s largest importer. While most of this

Sources: International Trade Centre, Starbucks

U.S. COFFEE SUPPLY AND DISTRIBUTION(2010, in millions of bags)

coffee comes from South and Central America, millions of bags of lower-quality Robustas from Asia areprocessed into instant coffee.

48 cities 70 cities

570 stores

1,500 stores

April 2012 2015 (projected)

Sources: International Coffee Organization, International Trade Centre,U.S. Department of Agriculture, The National Coffee Association

6 Canada and Germany process and re-export coffee to the U.S. and other markets.7 Hawaii and Puerto Rico are the only places in the U.S. where coffee is grown on a significant scale. 8 The discrepancy between supply and distribution is due to rounding.

Vietnam 3.83

Brazil 6.67

Colombia 3.16

Mexico 1.79

Guatemala 1.31

Peru 0.88Costa Rica 0.72Canada6 0.60

Indonesia 1.35Germany6 0.63

Others 3.44

Re-exports3.19

Domestic 0.07Production

Openinginventories

Closinginventories

Gourmet/specialty 60% Non-gourmet 40%

4.57

3.97Decaf Caffeinated 87%

Total consumption 21.78

Total imports 24.38

13%

= 30 stores

United States: The Coffee King

SUPPLY 29.02 million bags

DISTRIBUTION 28.94 million bags8

7

Brazil48.1M

Vietnam19.5M

Indonesia9.1M

Ethiopia7.5MColombia

8.5M

Annual production

45 million bags1

30

15

Data unavailable

Primary type of coffee produced

Brazilian natural Arabicas

Colombian mild Arabicas

Other mild Arabicas

Robustas

TRADITIONAL COFFEE-PRODUCING NATIONS

1 One bag equals 60 kilograms.2010 production data are used for this chart.

Sources: International Coffee Organization, International Trade Centre

Brazil has been the world’s largest coffee grower and exporter since the 19th century.

The majority of beans grown here are the less expensive, lower-quality Robusta varieties.

Coffee accounts for a third of all exports in its legendary birthplace.

How Coffee Makesthe World Go Round

INFOGRAPHIC

Coffee is an $80 billion a year global industry that ties the world together in a dense web ofeconomic, cultural, and political connections. The humble coffee bean, which began spreading from Africa and the Middle East in the 16th century, is now grown in and exported fromapproximately 50 countries. Total worldwide production this year is expected to be 132 million 60-kilogram (about 132-pound) bags, which amounts to nearly nine million tons of beans.

Source: International Coffee Organization

Production and consumption2

(in millions of bags)Annual average price3

(in dollars/kg)

The price of coffee has been on a roller coaster ride in the past few years as the world has struggled to recover from the global economic downturn. Price fluctuations like this are not uncommon in the coffee market due to

2 World production and consumption data for 2012 are not yet available.3 Prices given for 2012 are year-to-date averages.

4 Map shows only the major emerging markets identified by the ICO.

the often imperfect match between demand, which has seen steady growth over the past decade, and supply, which is always cyclical and can be affected by major weather events in coffee-producing regions.

Brazilian natural Arabicas Colombian mild ArabicasOther mild Arabicas

Robustas

1990 2000 2010

40

20

0

60

80

100

120

140

2.00

0

4.00

8.00

10.00

6.00

12.00

$14.00

Source: International Coffee Organization

From 2008 through 2011, coffee prices soared before softening demand in Europe and forecast of a record cropin Brazil caused a recent price drop.

For much of the last decade, coffee production has barely kept up with demand.

2011 WORLD CONSUMPTION

137.9 million bagsWhile the bulk of the world’s coffee

is destined for traditional markets such as the U.S., Germany, and Japan, consumption in exporting countries and emerging markets is growing three times as fast, and accounts for much of the

growing demand.

Exporting countriesTraditional marketsEmerging markets4 30.8%

17.9%

51.3%

ProductionConsumption

Supply and Demand