How South-East Asia Became a Hotspot for Coffee Production and Consumption

Coffee is the most widely consumed beverage in Asian countries. The root of it travelled way back in the 19^th century with French colonists, who arrived with two coffee plants, Arabica and Robusta, to Laos, a country in Southeast Asia. Knowing that Laos has nutrient-rich soil, a cold climate, and a high altitude chosen by coffee plants, they started the cultivation. Since then, everything has begun effectively in the Southeast Asian nations and is going well at a fast pace.

As per statista, the coffee market in asia is expected to generate a revenue of ISD 24.4 billion in 2024. As per the quote of "Connor Franta" "Coffee has always been a significant part of my life. For me, its chance to start my day and gather my thought - it's fuel for my creative process". The quotes signify the fact that there is something extraordinary about coffee and that it needs to be part of a daily routine to energize the whole day.

Nevertheless, every consumer has their own reason to drink, whether for health benefits or to refresh themselves. Anyway, whatever the reason, it has become an integral part of the market and is inevitable.

Rosario Cherry Cruz, CEO Equilibrium Intertrade Corp, said, "Similar to coffee consumers in other regions, Asians are becoming more aware of the environmental and social impact of their coffee consumption."

Climatic Conditions

One of the most important aspects of growing coffee is a suitable climate. As mentioned earlier about the coffee plants Robusta and Arabica, which are a perfect fit to cultivate predominantly in Indonesia and Vietnam, Besides, altitude plays a crucial role in producing coffee. Let us consider the cases of those two plants: Arabica requires an altitude of 2900–6500 feet, and Robusta requires 600–2500 feet.

The other factor is soil; coffee doesn’t grow well in all sorts of soils, and it needs a specific one that has to be well-drained and volcanic red. Hence, it is healthier that the coffee can be planted in acidic, nutritious, and fertilized soil, which can absorb water better. More importantly, coffee seeds should be sown in the appropriate type of soil at a minimum depth of one meter, and rainfall also has a lot of impact.

Most interestingly, the two nations of Southeast Asia, Indonesia and Vietnam, have met all the necessary climatic requirements to produce coffee beans, and this is one of the prime reasons that the coffee industry has a great existence. Also, Vietnam has bagged the second position in coffee production across the globe.

Low cost labour and Real-estate

Presently, the coffee market is thriving in Southeast Asian countries, and several studies suggest that the market will continue to rise from 2023 to 2032. Most importantly, the cheap workforce and the land are the key attractions for the foreign visitors to outsource their production capacity, and with this, the trade has expanded, which leads to the development of the coffee industry.

Indeed, the first-world nations in Southeast Asia don't have any specific wage system, which means that there is no legitimate amount to be paid to the workers. As per the wage indicator, the revised minimum wage in Myanmar is MMK600 per hour, which has already come into effect since October 1, 2023.

Undoubtedly, this could be a great opportunity for companies across the world to establish footprints in the Asian region and leverage the workforce for better productivity. Consequently, it paves the way for high profit turnover with a minimal wage system and lower land rates.

South East Asia Coffee Consumption

Over the last three decades, the market has been emerging, which has brought a spectacular rise in coffee consumption to the region's fast-growing economies. The Philippines was one of the biggest players in the traditional market, and then new ones such as Indonesia, Vietnam, and South Korea entered the race. Surprisingly, after the arrival of 2000, the markets have achieved an average annual growth of more than 4 percent, while the total consumption in the region grew two times to 19.5 million 60-kilogramme bags in 2012 from 8.4 million in 1990.

The above-mentioned data is as per the London-based International Coffee Organization, which released it a little earlier. In fact, the study is a compilation of 16 Asian nations.

Additionally, when we focus on region-wise consumptions, mainly Vietnam and Indonesia are the biggest producers and the third largest consumers. In Vietnam, due to the spike in household incomes and high education, the consumption of coffee has increased, which has paved the way for manufacturers to produce in bulk quantities. This behavioral pattern of the consumers illustrates that the coffee industry may never plummet and keep going at a rapid pace.

In a nutshell, the Asian economies are growing, and simultaneously, there may be huge demand for coffee. In contrast with the world population, Asia is at the top, and this will also be a crucial factor for consumption. The only challenge would be that, as there are millions of people, coffee production should be performed without compromising quality.