Coffee from the supermarket comes at rock-bottom prices. How do supermarkets manage to offer such cheap coffee? What's actually in it? And can such coffees even be produced fairly? One thing is certain: if supermarkets only do a little better, that's a lot.
We're repeatedly asked whether we could test supermarket coffees. No, we don't do that – it would be far too easy. Because if small players simply point fingers at big ones, that wouldn't be constructive for anyone. What we can do, however, is attempt to contextualize supermarket coffees. Why they're so often dirt cheap, why many taste the same, and whether anyone actually profits from it.
It's also important to clearly highlight what opportunities supermarket coffee can offer – for consumers as well as producers. So we can now ask ourselves:
What is the purpose of supermarket coffee?
Why are these coffees often so cheap?
And what potential do supermarkets have that hardly anyone else has?
The Purpose of Supermarket Coffees
In many cases, the purpose of coffee in supermarkets is to draw people into stores. Coffee in supermarkets often works like detergent – when there are promotions. Coffee is then often available in bulk packs at fixed promotional times that are planned well in advance.
Taste of Supermarket Coffees
It should come as little surprise that many supermarket coffees taste very similar to each other. There are primarily two reasons for this: first, it requires coffee in large quantities that always tastes roughly the same. This limits the selection of countries of origin for raw coffee. Second, and this is the reverse conclusion, coffees with more distinctive flavors rarely make it into supermarkets because they're rarer and above all more expensive.
The larger a coffee brand is, the less distinctive its taste. Because a brand must keep its promise to always taste the same. And that's ensured by similar coffees in ever similar compositions.
The cheaper coffees become, the worse they are in quality. Coffee is one of the few products that actually tastes worse as the price goes down. Expensive coffees don't have to, but can taste much better. This requires sensory analysis to discover what distinguishes a good coffee from well-intentioned marketing.
Cheap coffees that taste like coffee certainly have their absolute justification. Not everyone wants coffees that smell extremely aromatic and taste like everything except coffee. However, you shouldn't set your expectations too high for sensory delights with cheap coffees. Quality in coffee costs money.
What's in Supermarket Coffees? Almost Always the Same Thing.
While this sounds somewhat bold – I certainly haven't drunk nearly all supermarket coffees – why do I go to such lengths with this statement? Because of the price and the customer base a supermarket is targeting.
Supermarket coffees are typically blends, or mixtures. Through these, sensory, price, and supply fluctuations can be smoothed out. It's not that many different raw coffees bring many different flavors to the supermarket blend; no, they bring stability. And they lower the price.
Supermarket coffees are stable in price and taste. So it requires coffees that can meet exactly these requirements. This is why many come from regions where a lot is produced, much of the production is mechanized, and post-harvest processes are extremely efficient.
These are – with exceptions – mainly Arabicas from Brazil, Honduras, Peru, and Mexico, as well as Robustas from Vietnam, West Africa, and increasingly also India.
The Most Common Raw Coffees in Supermarket Coffee
In the mentioned countries, a lot of coffee is produced, sometimes at extremely low prices that, except in Brazil, have little to nothing to do with actual production costs.
The standard qualities from these origins are available in large volumes and meet most of the purposes supermarket coffee is meant to serve.
But Why Are Some Coffees in the Supermarket More Expensive?
It's usually about brand strengthening, not about drastic differences in raw coffee quality. A supermarket needs different segments to reach different customers. The good thing is that someone who buys the premium product rarely buys the budget line of the same product. The shopping cart therefore rarely contains both the most expensive and cheapest coffee.
And that's a huge advantage for a supermarket: the difference in the blend, or even in taste, doesn't necessarily have to exist – sometimes a lighter or darker roast is enough. And of course, the packages, which come in different designs, names, and emotional appeals, are also positioned at different heights.
Premium products at eye level, the mid-range segment at belly level, and discount goods at knee level. Next time you visit a supermarket, take a closer look at the coffee shelves – they're full of simple psychological tricks.
Why Are Coffees in the Supermarket So Cheap?
Above all, because supermarket coffees are produced in large quantities. Scale effects and efficiency in roasting, packaging, logistics, and storage result in lower prices that can be passed on to consumers. Large roasteries are always significantly more efficient than smaller and medium-sized ones when it comes to labor costs.
from our blog: https://kaffeemacher.ch/wer-roestet-wie-kaffee/
Lower prices are often, but of course not always, passed on, because a higher price for supermarket coffee doesn't necessarily reflect raw coffee quality, but appeals to the emotions a brand can evoke.
The raw coffee itself makes up a small part of the final cost structure of supermarket coffees. The overhead, meaning all costs for operating the business, must be borne by the coffees. Of course, this isn't only true for large roasteries, but for every business. Only the distribution is much larger with supermarket coffees because production can be so efficient.
The Cheap Raw Coffees
Raw coffees are purchased in large quantities for supermarket coffees. This requires a roastery, and the roastery usually has a trader who procures the coffees for it. And because the food industry is a low-margin business, it's all about volume – more volume means more margin. These volume deals are therefore also interesting for trading companies, so they often offer very good prices to large roasteries. At the same time, this is also interesting for large coffee producers, such as very large cooperatives. More quantity moves, admittedly at a smaller margin, but that's recovered through the large volume.
This is purchasing power. Whoever buys a lot is in demand.
Do Supermarkets and Their Associated Roasteries Pay Enough for Raw Coffee?
We can't answer this question, but we can speculate. Your best bet is to simply ask customer service what prices were paid for the raw coffees in a particular blend sold at the supermarket. That should spark an interesting discussion – if supermarkets were to disclose their purchasing prices.
But there's silence here – not just among supermarkets, but among the vast majority of coffee roasteries. The Transparency Coffee is trying to counter this and invites people to disclose raw coffee prices openly. And does it hurt? No. It feels good. Deswegen we also publish our purchasing prices. We need more discussion here.
Are Cheap Coffee Prices Sensible?
Counter question: for whom? For those who shop – yes. And for everyone else in the coffee chain? For those who produce, supply, sort, carry, transport, and stock coffee on shelves? That remains to be answered.
Basically, this is true, and not just for coffee, but for all food in particular:
Someone else pays if we don't.
So the message that coffee must be cheap is a false one. Coffee must cost something because all the work behind it costs something. If coffee is cheap, then that's not a sustainable approach.
What Opportunities Does Supermarket Coffee Offer?
The greatest ones for change. Because do small players do everything better? Hardly. Small might sometimes be beautiful, but to make big promises come true, you also need big volumes. And where are those? With the supermarkets.
The market power of supermarket coffee is massive. The roasted coffee market is extremely consolidated, as this impressive graphic on the Hivos Coffee Barometer shows. The world's top 10 roasteries roast at least 35% of the coffee that is then sold mainly in supermarkets.
And what exactly does this power consist of, besides being able to push prices down and making it hard to trace responsibility?
The mighty freedom of substitution. The ability to swap out coffees when they become too expensive for supermarkets.
Blends, which we discussed earlier, allow a roastery to provide not only sensory but also financial stability. If one coffee suddenly becomes much more expensive due to crop failure, or if domestic prices rise due to social unrest, that coffee can be replaced with one that tastes similar. That alone makes it hardly worthwhile to put sensorily more interesting raw coffees in a supermarket blend.
So it's normal for entire blend components to be swapped out. That sounds logical, but the whole chain of consequences behind it is massive. All the effects are far away and not felt here – and in this case, not tasted. When several containers of a coffee X are swapped out, that has an effect for everyone involved in production and export.
And Here Lies the Great Opportunity for Supermarket Coffee to Do Things Better
Imagine a roastery that roasts 50,000 tons of coffee annually – that's an industrial roastery in Germany – importing roughly 3,000 shipping containers full of coffee each year. Each container holds about 17 tons of raw coffee.
A cooperative in Honduras might produce 5 containers a year, 1 of which goes to the said roastery.
That would be 20% of the cooperative's volume, or 0.03% of the roastery's roasted volume. That's almost nothing for the roastery, and quite a lot for the cooperative.
If the supermarket now decides to price, market, and pay for this coffee from this container differently with this cooperative, etc., that has a huge impact for the producers. And for the supermarket, it's a low-hanging fruit. In terms of quantity, marketing ("our sustainability range," for example), and of course financially.
Now there are – albeit on a very small scale – supermarkets that choose exactly such approaches. And these projects should be supported. But inform yourselves, ask questions, be critical. How long-term these projects – the name says it – are meant to be will have to show.
You can find various examples online of supermarkets writing their own story in coffee. This often applies to only a fraction of their coffee assortment, but it's a start. And it would be proof that market power can also be used positively.
