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Steph Norman is the Co-Founder at Norlo Coffee who bring a truly unique Scandi-style coffee to the nation. Ever since visiting and sampling Oslo's most iconic coffee houses, Steph and her partner Dan have combined their passion and expertise to ethically source some of the world's finest organic coffees to start a Norwegian-style coffee movement here in the UK. Driven by delivering the healthiest, lightest and freshest coffee to those who are daring enough to be different, Norlo is obsessed with supporting the health and wellbeing of their customers going to great lengths to make sure that their coffee is of the highest quality and does justice to their packaging.
One business success
- We have been blown away by the vast number of industry-leading awards that Norlo has won for both its coffee and packaging, yet our most recent success story is that we have finally dipped our toes into exporting. Last month we secured the opportunity to launch into all 11 prestigious department stores, Palacio de Hierro in Mexico. This is super exciting for us with exporting always on the horizon and we are now at a point that we can designate time and resources into doing so. We are so excited about this partnership and our brand-new cold brews, along with our current offerings will be hitting their shelves early next spring!
Two challenges for the sector
- As with all other industries, the coffee industry is feeling the pinch as fuel costs continue to rise. This is putting pressure on already tight margins, with many businesses struggling to keep up. The impact of higher fuel costs is being felt throughout the supply chain with not only sea freight going through the roof but impacts also being felt from growers to roasters to cafes and restaurants, all of which could have implications on the price of coffee beans and the competitiveness of the industry. The rise in fuel prices may also lead to a decline in demand for coffee, as consumers switch to cheaper alternatives. This could put pressure on the profitability of the coffee industry.
- Recent climate issues are having an immediate impact on coffee, producing lower yields and quality. Coffee plants are very sensitive to changes in temperature and moisture levels, and even small shifts can have a big impact on output. In some regions, such as Central America, higher temperatures have led to an increase in pests and diseases, further reducing yields. In the long term, climate change could cause major disruptions to global coffee supplies. Many of the world’s top-producing countries are located in areas that are expected to be hardest hit by climate change. For example, Ethiopia – which is currently the second largest producer of coffee – could see its production halved by 2050 due to drought and other impacts of climate change. This would have a major impact on global prices and supplies.
Three forecasts for the sector
- Despite the challenges mentioned, the coffee industry is forecast to grow significantly in the next few years. The global coffee market is expected to reach $48.5 billion by 2023, up from $39.2 billion in 2017, according to a report by Zion Market Research. The demand for coffee is driven by factors such as the growing popularity of speciality coffees, the rise of the middle class in developing countries, and urbanization.
- The speciality coffee segment is expected to grow at the fastest rate during the forecast period, due to the increasing popularity of premium and gourmet coffees. The rise of the middle class in emerging economies such as China and India are also driving growth in the coffee market, as these consumers are increasingly willing to spend on higher-quality products. Urbanization is another key factor driving market growth, as more people are moving to cities and seeking out convenient and sophisticated food and beverage options.
- The ready to drink and functional coffee segments are expected to be the main drivers of this growth. This is good news for coffee lovers as it means that there will be more choice and variety available in the market. The ready-to-drink segment is forecast to grow at a compound annual growth rate of 6.5% between 2018 and 2023. This segment includes coffee products that are pre-packaged and ready to consume. They are convenient and easy to drink, making them popular with busy consumers who want to enjoy a quick cup of coffee on the go. The functional coffee segment is also expected to see strong growth, with a compound annual growth rate of 5.8% between 2018 and 2023. This segment includes coffees that are fortified with additional ingredients such as vitamins, minerals, and herbs. These products are becoming increasingly popular with health-conscious consumers who are looking for ways to boost their energy levels and improve their well-being.