Filipino coffee drinkers to pump Southeast Asia's caffeine rush by 2025

Ian Nicolas Cigaral - Philstar.com
Filipino coffee drinkers to pump Southeast Asia's caffeine rush by 2025
Coffee consumption in the Philippines is forecast to grow 4.4% year-on-year to 7.4 million 60-kilogram bags in 2025 on the back of "growing café culture" that has been driving demand for the commodity in social contexts, Fitch Solutions, a unit of the Fitch Group, said in a report on Tuesday.
STAR / File

MANILA, Philippines — Filipinos’ enduring love for coffee is translating to a consistent rise in caffeine intake, one that will not only reverse last year’s brief withdrawal but also outpace the rest of emerging Asia over the next 5 years.

Each Filipino is bound to drink 3.78 kilograms of coffee every year by 2025, up from an estimated 3.05 kg per capita last year, Fitch Solutions, a unit of the Fitch Group more popularly associated with the debt watcher, said in a report last Monday. 

That consumption means it’s more than just a coffee break, even for Filipino workers now stuck at home because of the pandemic. That doesn’t mean however that the health crisis did not make material impact, when last year’s local coffee consumption was down from 3.40 kg per capita in 2019.

That said, Fitch Solutions is projecting a quick recovery for coffee lovers, not only in the Philippines, but for most of emerging markets. While the Philippines will lead in Southeast Asia as forecast, Brazil will stay as the leading coffee market with consumption set to peak to 7.2 kg per capita by 2025, followed by the US with 5.06 kg.

Developing countries like Costa Rica, and within the region, Indonesia and Vietnam will also contribute to the spike in coffee consumption, thanks to a rise in “café culture” that came with rising incomes in these locations. Japan will lead the broader Asia.

A large population, meanwhile, means coffee demand in China is forecast to “grow significantly over the coming years,” the Fitch unit said.

“Emerging markets will drive consumption growth as a result of rising incomes, population growth, changing habits, investment by foreign firms and attempts by top producers to reduce export reliance,” it said.

“Reflective of these changing preferences for coffee drinking among young urban populations is the marked increase in both large coffee chains and independent of specialty coffee shops in many EMs,” it added.

Like almost anything however, the insatiable thirst for caffeine is at risk of failing to be satisfied and demand is likely to fall more if economies take longer to recover from the pandemic crash. Apart from the obvious depressing impact on incomes used to buy these cups of coffee, lockdowns precipitated by the lingering virus would also mean coffee shops getting shut down longer.

Beyond the pandemic, roasting may also take a backseat as coffee supplies fall globally, particularly in coffee-producing countries like Brazil, Colombia and Vietnam. “The upside risks to our global forecasts are limited,” Fitch Solutions said.

Overall, Fitch Solutions sees the Philippines consuming 7,358.2 60-kg bags of coffee by 2025, up 32% from last year’s estimates. Annual growth is set to slow from as much as 8% this year to 4.4% in 2025, albeit still faster than global 5-year average of 1.7%.

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