The Market for Organic/Fair Trade Coffee in Germany and the United States

Coffee is one of the most popular beverages in the world. It is cultivated in about 70 countries in South America, Africa, and Asia and more than 8m tons of coffee are produced annually. The two most successful species of coffee are the Arabica and the Robusta. In the US and Germany, coffee spans generations of consumers and is present in almost every household. Sustainability standards are the current trend in the global coffee industry. In the last decade, due to increased consumers concerns over the environmental and social issues, the demand for certified coffee is thriving. Double certification of organic/fair trade coffee has become more popular among the major coffee brands. The US and Germany are the largest markets for organic coffee. Together, they accounted for 57% of the world’s total amount of imports in 2013. In Germany, fair trade coffee is more important than organic, while in the US, organic coffee has a higher demand. However, organic and fair trade coffees command a premium price and not all customers are willing to pay for it. The price for organic coffee is generally 25% higher than for conventional coffee, therefore, high price differentials can be a limiting factor for the development of this sector. The EU and the US apply no import tariffs for green coffee. There are various EU regulations that need to be followed in order to import coffee to Germany. All US import shipments must be accompanied with certification to ensure the legal regulations determined by the FDA are followed. Contract forms for organic coffee are standard for both the US and Germany, issued by the Green Coffee Association and the European Coffee Federation, respectively. Organic and fair trade coffee reach end customers mainly through retailers, such as supermarkets and natural food stores. Due to increasing demand of organic and fair trade coffee, the industry is expected to expand in the future.