Brazilian Coffee Sector to Grow Two Percent in 2015

By Lisa Flueckiger, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – The coffee sector in Brazil is set to grow by two percent in Brazil in 2015. The main driver of the growth is the production of coffee in capsules, where an increase in sales of 40 to 50 percent are expected according to the Brazilian Coffee Industry Association, ABIC.

Coffee is consumed in 98.2 percent of Brazilian homes and machines using single-dose capsules are increasingly popular.

“As the sector is undergoing technological renewals, particularly in what we call single dose [coffee capsules], the volume of investment in recent years has grown considerably,” ABIC’s executive director Natan Herskowicz stated. “Research indicates that in 2014 we had an increase of 54 percent compared to 2013,” he added.

With the expectation of growth in the coffee sector, two coffee capsules production plants were announced in Montes Claros, Minas Gerais with resources of around R$285 million.

Yet, research by ABIC has shown that the traditional way to make coffee with bottle and filter is still the most popular way in Brazil. In a survey 84 percent of respondents were making their coffee with filters, while only four percent had used capsules.

The current slowdown in Brazil’s economy seems not to concern the coffee sector. “As coffee is a product of daily consumption and with low cost, fluctuations of the economy do not interfere in our industry,” Herskowicz explained.

However, arabica, the main coffee kind, is very sensitive to climatic changes. A study by the Royal Botanic Gardens in the UK has predicted that the area where wild Ethiopian arabica can be produced will be reduced by 85 percent until 2080, with the possibility to reach 99.7 percent in the worst case scenario. This will likely affect Brazil where a commercial version of the plant is grown.

Brazil is the largest coffee producer in the world and also the main exporter and has the second largest consumer base after the United States. While consumption had decreased in 2013, it increased in 2014 by 1.24 percent. In January 2015 exports of coffee increased by 4.35 percent in comparison to the same month the year before. Brazilian coffee mostly goes to the United States, Germany, Italy, Belgium and Japan.