The process of bitter tasting bean turned into a coffee loved across the world may seem rather simple and overlooked. However, the truth is far from simple, as much effort goes into transforming that bean into the final product and making it available across thousands of retail stores, café’s, coffee chain, and individual household. Suppliers in the coffee bean market have to battle out multiple issues including supplier selection, climatic conditions, price volatility, land productivity, fluctuating demand, and stringent government regulations. As a result, suppliers have to avail procurement services to drive profitability and sustainability in the coffee bean market.
Here are some of the reasons why procurement services are essential in coffee bean market:
Balance Demand-Supply Shifts
Both the demand and supply side of the equation is highly unstable in the coffee bean market. The global market is experiencing increased demand from F&B industry for use as a dietary supplement and as an ingredient in baked goods. The increasing demand from developed parts of the world is driving up the prices for coffee beans. Although the demand is consistently rising, the supply has remained constant for a while, with the coffee market facing supply shortage due to fall in robusta production. Both buyers and suppliers have to rely on procurement services to accurately forecast the demand-supply scenario and devise effective strategy to combat shortage or over-production.
Keeping up with the Trends, Innovations, and Market Development
The coffee bean market has seen some rapid market developments and dynamic changes in customer preferences. Consumer preferences are shifting from regular instant coffee to cold brew coffee, nitro coffee, gourmet coffee, and coffee pods. The suppliers have to adjust quickly to such change in preferences to remain competitive. With the help of dedicated procurement professionals, companies can devise effective strategies to keep track of such developments and adjust their supply accordingly. The procurement department also helps the manufacturers to locate suppliers that innovate on such technologies.
Compliance and Government Regulations
The demand-supply landscape of the coffee bean market is governed by a lot of laws, rules, and regulations that complicate the trade on a global level. There are country-specific laws that govern various aspects of supplier’s business, including processing, handling, storage, transport, and sale of agricultural commodity. Additionally, multiple laws govern the acquisition or leasing of rural properties by specific entities or individuals and issues related to sanitary and phytosanitary effects of such land ownership. Procurement teams can help the supplier to gain all required licenses, permits, and approvals from government agencies to ensure compliance and smooth operations across the globe.
Today, procurement professionals in the coffee bean market are turning towards innovative technologies such as coffee plantation software, information sharing systems and tools, and various supply chain software to optimize their operations and improve profitability.
Read more about the procurement process in the coffee bean market along with supply market landscape, pricing, and procurement insights in SpendEdge’s upcoming report on the global coffee bean market.