Coffee versus Tea: The Demand for Throat Share

A majority of Western consumers will not go without either or both coffee and tea daily, whilst
consumption at origin mostly lags behind. The ongoing battle for throat share among these two leading beverages is complex, and markets continue to shift and to evolve. By Barbara Dufrêne.

It is not easy to compare the tea and coffee statistics, as data are based on the traded material, ie, the dry tea leaf, which is ready to be brewed, with an average of 2gr per cup, whilst coffee is traded as green bean, in 60kg bags, and must be roasted and ground for a traditional brew (averaging about a 20 percent weight loss, with an average 7gr of roast powder fora traditional mug).

A whole set of calculations is required to assess which cup is the world’s number one, with the International Coffee Organization (ICO) publishing a production total of 178 million 60kg bags of green beans for the 2023/34 coffee year (1 October 2023 – 30 September 2024) and the International Tea Committee (ITC) publishing a global tea production of 6.604 million tonnes of ‘made’ tea, ie, dry leaf, for calendar year 2023. However, based on acknowledged conversion factors and average brewing methods, without taking extracts and soluble powders into account, it is reasonable to assess that today, the world consumption of tea amounts to about twice as many cups as the world consumption of coffee.

Both coffee and tea continue to see production expand year on year, despite climate change and adverse weather patterns, labour shortages and transport problems, whilst consumption shifts and changes occur in both the origin and the importing markets.

People often state that coffee is a must for ‘busy urban people’, constantly ‘on-the-go and under pressure’, whilst tea is part of a less hectic pace of daily life and requires more leisure and mindfulness. There is a current fascination of coffee in the young generations in Asian markets, namely in Japan, Korea and China, with  the cup’s Western profile and immediate pick up, whilst consumers in mature Western coffee markets are enthralled with expensive and highly refined premium teas from namely China, Japan, and Korea. These trends may well be triggered by a strong desire for novelty and fashionable convenience in the East wanting to follow Western ways and Western people being attracted by ancestral and ceremonious origin leaf taking them to indulge in Eastern ways.

The Role Competitions Play
A vital role in raising the profile, awareness, and qualities of coffee and tea is played by marketing, promotions, and competitions — here coffee is truly the king with its long standing global platform that is World Coffee Events (WCE). This highly efficient event management organisation, which is registered in Dublin, Ireland, was originally founded in 2011 by the Specialty Coffee Association of
Europe and the Specialty Coffee Association of America, which merged in 2017 to become the
Specialty Coffee Association.

Wuyishan Tea Research Institute in China Image credit:
Barbara Dufrêne

The current WCE portfolio includes the World of Coffee (WOC) exhibitions, seven annual World
Coffee Championships – the World Barista Championship (WBC), the World Cup Tasters Championship, the World Latte Art Championship, the World Coffee in Good Spirits Championship, the World Brewers Cup, the World Coffee Roasting Championship, and the Cezve/Ibrik Championship – as well as features such as All-Stars, the Espresso Bar, and the Brew Bar. These activities continue to expand as they attract many young professionals and the trade press continues to highlight all possible ways of coffee serving and coffee drinking. In May 2024 , for example, World of Coffee took place in Asia for the first time in Busan, South Korea. This year, WOC Asia will be held in Jakarta, Indonesia, 15 – 17 May.

No way to compare this to tea, since there is still no fully operational global competition platform for tea tasting, tea art, tea mixology, tea brewing, which would enable highlighting the cup under all the aspects. Indeed, the brilliant concept, The International Tea Masters Cup, launched in 2014 Russia’s Tea & Coffee Association director, Ramaz Chanturiya, is struggling for more support to fully and consistently unfold its global tea promotion strategy.

An additional step for raising tea’s global profile was undertaken in 2018 with the establishment of The European Specialty Tea Association, which attempts to tread on the steps of the Specialty Coffee Association, however, its efforts to step into the centerstage limelight have been slow.

Where Growth Potential Lies

The tea and coffee worlds are divided into the producer and the consumer side, as both crops prosper only in tropical climates, and have to be exported to the temperate and cold areas of the
globe. With both tea and coffee being produced by millions of smallholders, with limited
market access, those who move and trade the materials before they reach the food industry
and the retailers are powerful players in the supply chain.

Concerning coffee, the global throat share of the producing countries represents 32 percent of
the world consumption and is gradually increasing according to the most recent ICO data. This low percentage puts the main power in the hands of the importing markets, where 68 percent of the coffee is consumed.

With tea, the calculation model is slightly different as ITC analyses the global tea export volumes versus the volume of tea retained in the producing countries. Here, the origin countries represent 73 percent of the world tea consumption and this ratio continues to slightly increase. This allocation leaves the main power with the producing and exporting markets, of which China dominates, supplying 49 percent of the global output (an increase compared to a 40 percent share in 2013) catering first of all to its own huge domestic market.

A closer look indicates that the ten biggest coffee-consuming markets in terms of import or home consumption volume per the ICO, are the following (in millions of 60 kg bags):
1. USA with 31 million bags
2. Brazil with 22 million bags
3. Germany with 7.5 million bags
4. Japan with 6.8 million bags
5. Indonesia with 6.7 million bags
6. Russia with 4.9 million bags
7. Vietnam with 4.2 million bags
8. UK with 3.7 million bags
9. China with 3 million bags
10. South Korea with 2.9. million bags

Ten countries account for more than half of the world’s coffee production. Image credit: Those Coffee People

These ten markets account for just over half of the world production. According to the ICO, while coffee consumption in the traditional coffee drinking markets, namely, Germany, Japan, South Korea, and Russia are mature and rather on the decline, coffee consumption both in the USA and Brazil, continues to grow.

Looking at the more recent coffee drinkers, like China, Indonesia, and Vietnam, consumption continues to expand, with growth in population and disposable income. Data reveal the average annual per capita coffee consumption, which
offers insight about the cup preference. The UN Food and Agriculture Organization (FAO) reports that the highest per coffee consumption is in Finland, Sweden, and Norway, with 9-10kgs of coffee per head and per year; followed by Austria, Canada, and Germany with more than 6kg; then France, Italy, and the USA with over 4kg; and finally Brazil and Japan with 3.4kg.

A notorious development for the markets that will shift from tea to coffee is a growing consumption of instant coffee, a highly convenient, relatively cheap and often sweetened cup, combined with sugar and milk powder, which is a new treat for the traditional black tea consumers. Th e UK and Russia are amongst the biggest instant coffee-consuming markets.

Looking at the tea-consuming markets, it’s important to note China’s ‘monopoly’ as the world’s biggest tea-producing (3.250 million tonnes) and consuming market (2.880 million tonnes), followed by India, the global number two tea producer (1.370 million tonnes) and consumer 1.140 (million tonnes). Omitting China’s and India’s huge volumes leaves a balance of 3- percent of the global production volume and of 39 percent of the global consumption volume to be shared out by around 35 other producing countries, with their millions of smallholders, their big tea auctions, and their many different teas facing tough competition in the around 80 importing country markets.

The ITC tables provide useful overviews, the changes in consumption patterns over the past ten years – from 2013 to 2022 (however impacted by the Covid pandemic), the ongoing political conflicts, and the ensuing trade restrictions and
sanctions. If or when these conflicts are revolved, one will need to read between the lines and get updated. However, it is obvious that tea consumption has been declining in the traditional big consumption markets over the past ten years. In 2-2022, for example, tea consumption in the UK dropped by 13 percent to 100,000 tonnes; in the Russian Federation, it fell 11.5 percent to a total of 138,000 tonnes; in the USA, consumption decreased 7.7 percent to 120,000 tonnes. These three markets are all home to major national and multinational coffee shop chains, and Russia and the UK are both leading soluble markets as well.

Conversely, there are impressive tea growth rates in several African and Asian markets:

• Pakistan — surging 86 percent to total 236,000 tonnes of mainly black tea in 2022;
• Saudi Arabia — jumping 70 percent to 34,000 tonnes in 2022;
• Malaysia — with 29,000 tonnes, up by 45 percent from 2013;
• Morocco — (China’s biggest green tea importing market) increased 44 percent in 2022, to total 82,000 tonnes.

Religious requirements for the Muslim world are an important motivation, and strong black teas as well as spicy and sweetened green teas may well respond to these requirements in a more adapted way than refined coffee shop cups.

Concerning the big tea drinkers, that is, assessing the average annual per capita tea consumption the world, the ‘champions’ live in Turkey and consume 3.11kgs of leaf, followed by Morocco and Libya, with just above 2kgs, and China ranks fourth with 1.86kgs. The biggest tea drinkers in Europe are the Irish, with 1.8kg followed by the British, who still consume an average of 1.5kgs of leaf per year, but down from 2.11 kgs just 20 years ago.

Far left: Luckin Coffee store in Jewel Changi in Singapore Image credit: Vanessa L Facenda

The new Smith Teamaker Store in Japan Image credit: Smith Teamaker

Projecting Possibilities 

From the official data published by the authorities in charge, one can see that coffee production is readily reabsorbed and cups are gobbled up without much delay, whilst tea consumption is lagging behind tea production. More impetus may be needed to make tea cups increasingly attractive in traditional coffee markets. Functional teas, blends of tea and herbals and premium origin teas have seen their sales grow regularly, but there is not the same abundant availability in the out-of-home segment as for coffee.

There are ongoing attempts to expand bubble tea chains, with a selection of sophisticated cups with a substantial price tag, mostly initiated by Taiwanese companies, which may be a way forward. Tea lattes and the launch of new ready to-drink premium teas together with premium tea extracts for convenient quality cups in the Western urbanised younger consumer markets, who are keen on functional and hydrating cups, could provide new consumption incentives.

Discussing the appallingly flat tea consumption data in several continental European markets with tea industry experts, many say that switching from tea to coffee occurs mostly as a choice of the young generations, whilst its more often the seniors who switch from coffee to tea, and they consume at home, and with moderation. The search for new marketing strategies is definitely ongoing.

Barbara Dufrêne is the former Secretary General of the European Tea Committee and editor of La Nouvelle du Thé. She may be reached at: b-dufrê[email protected].