From tea-loving Asia to coffee-crazed Europe

As of 2019, coffee was ranked the most popular beverage in Russia. Coffee sales have doubled in Russia over the past decade and continue to grow. In another trend, Russians are increasingly leaning towards whole-bean rather than instant coffee. Has the pandemic changed our people’s preferences and what are the prospects for the tea and coffee market?

Demand for pepper-upper

The organic coffee market in Russia is booming, according to analytic research, the demand for this energy booster in Russian shops having increased by 18–20% this year. Coffee from vending machines is just as popular, with sales having risen by 50%.

The pandemic has largely affected coffee sales in offline stores. The first surge in sales came about in March 2020 when people were stocking up on coffee and tea because nobody knew when stores would reopen. Russians became used to drinking coffee at home during the lockdown, a tendency that persists even today when most of the restrictions have been lifted. Most customers opt for ground coffee.

Gradually, coffee is becoming the go-to beverage both at home and when people are out and about. This trend is particularly strong in St. Petersburg which can be considered the coffee capital of Russia — even historically, as the first ever coffee shop in the country opened in St. Petersburg in 1740.

Still, tea is holding its ground in some regions. Kofeiny Magnat released statistics, according to which the tea vs. coffee sales in the Russian Far East are currently 60% against 40%. While the price of coffee grew by an average of 5% last year, the price of black Indian tea may go up 10—20% as soon as this fall, due to potential closing of major tea plantations in India.

Farewell to Indian tea?

The critical epidemiological situation in India has put black tea plantations in West Bengal and Assam at the risk of shutting down. The severe drought in the country is very likely to damage the harvest as well. Together, these factors may result in a drastic drop in production and a surge in prices. Indian partners have already notified Russian companies of possible cuts in supplies next September. We should not worry about black tea shortage though as Russia plans to compensate by importing tea from Kenya, China and Sri Lanka.

Lab-created coffee

While the black tea problem seems to have an easy solution, maintaining coffee supplies might prove challenging. Organic coffee may become luxury very soon, as 30 years later, global warming may reduce the areas suitable for coffee growing by half. The heat and drought has already significantly affected the harvest in the largest coffee plantations in Tanzania. Higher temperature also creates better conditions for reproduction of pests.

Experts offer alarming prognoses. Unless we take immediate measures to mitigate climate change, organic coffee may disappear from the face of the Earth by the end of this century.

There are companies already working on creating coffee alternatives. An American startup recently presented a brew based on watermelon and sunflower seeds. It tastes and smells just like coffee and has the same properties, the company claims. The ‘coffeeless coffee’ will be sold ready-made in cans. The only disadvantage is that it is only available as a cold drink for now. The next entry in unconventional food is expected to hit the shelves this year.

By Svetlana Gladun, founder of Kofeiny Magnat

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