The Coffee Economy: How This Small Bean Became the World’s Second Largest Financial Industry

Coffee, this popular and beloved beverage, is not only one of the most widely consumed drinks around the world, but it also holds a special place in the global market from an economic perspective. With an annual revenue reaching hundreds of billions of dollars, the coffee industry is recognized as the second largest and most profitable industry in the world after the oil industry.

This massive industry, which provides employment for millions of people worldwide and influences the economies of many countries, plays an undeniable role in economic development and social welfare. But the question is: how has this small and seemingly simple bean managed to make such a significant impact on the global economy? To answer this, we need to take a closer look at the turbulent history and story of coffee, the evolution of the coffee industry, and the key factors that have contributed to its growth and expansion over time.

Coffee’s Journey from Farm to Cup: A Look at the Coffee Industry Supply Chain

The coffee industry encompasses an interconnected chain of diverse activities including cultivation, maintenance, harvesting, processing, transportation, trade, and distribution. This long and complex process is made possible through the efforts and collaboration of various groups such as farmers, traders, exporters, importers, and coffee shops.

Coffee Cultivation

In the first step, coffee beans are planted and cultivated in tropical regions suitable for this crop, primarily in South America, Africa, and Southeast Asia. Brazil, Vietnam, Colombia, Indonesia, and Ethiopia are among the world’s largest coffee producers.

Harvesting and Drying

After harvesting and undergoing drying and processing stages, the green coffee beans are exported and purchased by importers and traders around the world. These raw beans then go through the roasting process at their final destination to be prepared for consumption.

Coffee Roasting

The type of roast—light, medium, or dark—has a significant impact on the aroma and flavor of the coffee. Finally, the roasted coffee is delivered to consumption centers including cafes, restaurants, and retail stores, and is made available to consumers. Each of these stages adds value and generates employment, playing an important role in the economic function of the coffee industry.

Key Players in the Coffee Industry

In the global coffee industry, major multinational companies such as:

• Nestlé (owner of the Nescafé brand)
• Mondelez
• SMC
• Oldin
• JDE Peet’s (with brands like Douwe Egberts and L’OR)
• Starbucks (with thousands of branches worldwide)
• Lavazza and Illy from Italy

are among the largest companies in the coffee sector and hold a significant share of the global market. These economic giants, by owning a considerable portion of the global coffee market and making large investments in marketing, innovation, and the development of emerging markets, play a decisive role in shaping the future of the coffee industry.

For example, Nestlé alone holds about 30% of the instant coffee market share. Alongside these multinational corporations, thousands of medium and small-sized companies also operate within the coffee industry value chain. From domestic producers and suppliers to chain and independent coffee shops, each of these players plays a key role in the vibrancy and growth of this industry.

For instance, the Iranian company Parto Padideh, by focusing on the quality and authenticity of its products, has gained a significant position in the coffee market in Iran and neighboring countries. This leading company, through importing and exporting coffee and related equipment, actively contributes to expanding coffee consumption and raising the industry’s standards in the country.

Economic Value of Coffee in Global Markets

According to statistics, the coffee industry was valued at approximately $102.15 billion in 2020, and it is expected to reach $155.64 billion by 2025. This industry includes a chain of activities such as agriculture, processing, trade, transportation, and retail, involving millions of people around the world.

The economic importance of coffee can also be understood from the volume of its global trade. According to the World Trade Organization, coffee is one of the most traded agricultural commodities in the world, with more than 10 million tons of green coffee beans traded globally each year.

The global coffee industry has experienced significant growth in recent years, driven by increased global demand, product diversification, and innovations in processing and packaging.

At the national level, coffee also plays a vital role in economies. For instance, in Iran, according to the Islamic Republic of Iran Customs Administration, over 33,000 tons of green coffee beans worth $155 million were imported during the first seven months of the year 1403 (March–October 2024).

Global Coffee Market in Iran

In Iran, the coffee industry is also experiencing notable growth. According to official statistics, in just the first seven months of 1403, more than 33,000 tons of green coffee beans valued at $155 million were imported into the country.

The development of local brands, the spread of café culture, and the increasing interest of the younger generation in coffee-based beverages signal a bright future for the global coffee market in Iran. Parto Padideh Pars Company, focusing on the import of high-quality beans and professional coffee equipment, is considered one of the pioneers in the Iranian coffee industry. With its activities in coffee trade and barista training, the company has captured a significant share of the domestic market.

Fluctuations in the Global Coffee Market: Challenges and Opportunities

Despite its vast potential and numerous opportunities, the coffee industry has always faced challenges and risks. One major challenge is the severe price volatility of coffee in global markets. The price of coffee beans is affected by various factors, including weather conditions, supply and demand levels, plant diseases, currency fluctuations, and geopolitical tensions.

These fluctuations create uncertainty and high risks, especially for farmers, posing serious challenges. For example, in the past two years, global warming, widespread droughts, and fungal diseases in key coffee-producing countries like Brazil, Nicaragua, and Honduras have led to supply shortages and rising prices.

For instance, the price of Vietnamese coffee has increased by nearly 100% over the past year, rising from $2.8 to over $5 per kilogram. Such price volatility has had a direct impact on the income of coffee farmers and producers, as well as the purchasing power of consumers.

Nevertheless, the growing global demand for coffee and the expanding coffee consumption culture in developing countries and emerging economies such as China, India, and South Korea have opened promising prospects for producers and other players in the coffee industry.

The Future of the Coffee Industry: Trends and Outlook

Looking at current trends and future prospects, it can be argued that despite existing challenges, the coffee industry has a prosperous and promising future ahead. Forecasts indicate that global demand for coffee will grow at an annual rate of 5% by 2030.

This growth in demand will primarily be driven by increased per capita consumption in developing countries and emerging economies, especially in Asia and Africa. The spread of café culture and the popularity of coffee-based beverages among younger generations have been key drivers of consumption growth in many developing countries.

Countries such as China, South Korea, and Japan have also experienced a shift in taste from tea to coffee, indicating the potential for larger consumer markets. Moreover, the growing inclination of consumers toward organic, capsule, and instant coffees has created a significant potential market for the development of new and innovative coffee products.

On the other hand, intensifying climate change and the spread of pests and diseases pose a serious threat to coffee production. Therefore, investment in research and development of resistant varieties, improvement of agricultural practices, and reduction of the carbon footprint across the entire value chain will be essential and inevitable.

Conclusion

With a rich and eventful history, the coffee industry is now recognized as one of the most important and influential industries in the global economy. Relying on an interconnected chain of activities, this industry plays a vital role in the livelihood and welfare of millions of people around the world.

Nevertheless, it has always grappled with challenges such as severe price fluctuations, adverse weather conditions, and plant diseases. In conclusion, despite all its ups and downs, the future outlook for the coffee industry remains prosperous and promising.

Rising global demand, product and service innovation, and smart utilization of new technologies will provide the necessary foundation for the sustainable development and continued prosperity of this vital industry. In this journey, the efforts and collaboration of all stakeholders—including farmers, traders, governments, and companies active in this field—as well as the awareness and responsibility of consumers, are essential for realizing this bright and green future.