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Things about coffee factory revealed by coffee traders

Coffee factory plays a key role in the coffee trading market. To be an expert in coffee trading, having a clear understanding of processing factories is really necessary.

See more: Vietnam coffee factory and the impossible not to know

Brief introduction about coffee factory

Coffee factories are partners that any importer has to pay attention to when considering purchasing coffee in the market.

Overview about coffee factory

Coffee factories are responsible for making coffee products to distribute to buyers. Factories often are responsible for washing, removing the outer layers, processing or even packing coffee beans into packages.

Typical features of coffee factory

The coffee factory is popular with foreign customers due to their 2 main features, which are beneficial to both parties.

  • Having their own planting area

Since coffee is a typical agricultural product, most coffee factories have their own farming lands and are located near the farms to ensure the quality of coffee after harvesting. Delivering coffee cherries right after picking within 24 hours to the processing mill helps keep the fullest and natural flavor of coffee beans.

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Having their own farming area

  • Understanding their products and market

Because most coffee factories are also producers, they have a deep understanding about coffee from the planting to processing. The soil, surrounding conditions and every step of processing all affect the flavor and aroma of coffee beans. Moreover, working as producers makes them get their market, make good predictions about the price trend depending on each crop.

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Understanding the market and products

Main types of coffee factories in the world

There are two main types of coffee factory being responsible for the two different processing stages:

  • Processing coffee factory, also known as coffee manufacturer, is in charge of a simple processing stage which transforms coffee cherries into green coffee beans. Coffee processing factories supply both roasted and green coffee beans and often trade in large quantities. Since these coffee beans also account for a large proportion of the coffee production, more than 85%, processing coffee factories are considered as the main source of worldwide coffee exports.
  • Deep-processed coffee factory is regarded as a factory processing finished coffee products such as instant coffee or coffee powder. These coffee factories require modern technology and huge capital investment, so the production of coffee powder is not really high when compared to that of green coffee beans. The quantity is estimated to be about 7 to 8 times lower than the green beans output, making up about 10% of the global coffee production.

Main products that coffee factory supply

There are two main types of products supplied by the coffee factory including: green coffee beans and roasted coffee beans. In which, the former has the best production accounting for more than 80% of the global coffee production. The rest belongs to roasted coffee beans and other forms of coffee.

  • Green coffee beans

Green coffee is coffee beans that have just been peeled and removed from all the outer layers without any processing intervention. For this type of coffee beans, at the peeling stage. There are two main types of green coffee in the world including Arabica and Robusta, with the best production accounting for 60% or more and nearly 40% of the world’s coffee production respectively. Currently, Arabica coffee supplier’s factory is often in growing countries such as Brazil, Colombia, Mexico, Peru, India. In which the largest producer is Brazil. For Robusta coffee, Vietnam is the global leader in exporting this type of coffee. About importing countries, although Europe decreased their import volumes by about 77 MT compared to that of the year 2020/21, it still takes the first position with about 2550 MT accounting for nearly 40 percent of the world’s coffee bean imports volume in 2021/22. Whereas, America, the second‐largest green coffee beans importer with a volume of about 1500 MT in the year 2021/22 experienced a slight increase in the volume compared to that of the previous year with 1460 MT of green coffee.

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Green coffee beans

  • Roasted coffee beans

Roasted coffee beans are coffee beans going under the roasting process which transform its color from green to brown or even dark brown. This heating step affects much on the coffee flavor, creating numerous aroma compounds of coffee. Because the roasting process requires much investment on high-tech machines, the highest exported volume of roasted coffee belongs to the EU and Switzerland, making up nearly 45% and 34% of the worldwide roast exports in 2020/21. In spite of the Covid 19 epidemic, the quantity of roasted coffee exports still experienced an upward trend during the last 3 years from 261.6 MT in 2018 to 327.3 MT in 2020. The reason for this growth is due to the effects of quarantine times, coffee drinkers are interested in learning how to make a cup of coffee at home by themselves with brewing equipment. The main importing markets of this coffee are Canada, US and UK with the ratio ranging from 11% to 15% of the total roast import volume.

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Roasted coffee beans

Besides the two above types of coffee, coffee powder or subtle coffee also plays an important role in the coffee trading market. According to the USDA coffee report, coffee powder exports account for about 10% of the global coffee exports volume in 2020 and the rate has increased up to more than 12% in 2021. This upward trend is predicted to occur due to the rising demand for making coffee at home and office. Coffee powder is packed in pouches, which is convenient and saves time for drinkers.

Competitive advantages when purchasing products from coffee factory

When it comes to coffee factories, there are 3 main competitive advantages of them that attract many global worldwide coffee suppliers including price, output and diverse products.

  • Coffee factory can provide the high-quality products with the most reasonable price

Most large coffee factories come from big growing countries such as Brazil, Vietnam, Colombia,… which are renowned for their top high-quality products of the most competitive price in the world coffee market. The common characteristic is that their factories are often located in or near the farming land which helps lower the capital cost due to savings in transportation cost from farm to factory, brokerage fees or the inexpensive labor cost. Moreover, the location of factories also assists in keeping the fullest flavor of coffee beans if they are delivered to factories within 24 hours after being picked.

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High-quality products with reasonable price

  • Coffee factory can produce stable output

Since most coffee factories are situated right on the “coffee belt” road and have long experience in producing and processing high-quality coffee, their annual coffee production is high and stable. The production of growing regions such as Brazil, Vietnam, Colombia take the top 3 countries of the highest output, making up to nearly 37%, 20%, 9% of the global coffee output respectively on average in the last 3 years. In 2019, when the Covid 19 pandemic first emerged, the worldwide output went down about 4% to 10,142 MT of coffee but gradually recovered up to 10,557 MT in 2020 thanks to the adaptation of coffee factory and less abnormal weather.

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Large and stable coffee output

  • Large coffee factory receives much support from government

To get the best wholesale price and simple custom practice procedure, foreign traders should have an overview about the trading policy of coffee factories regulated by their government. In growing countries such as Brazil, Vietnam, Colombia,… many activities conducted are beneficial to coffee factory since coffee plays an important role in improving the national economy. For example, in 2020 in Vietnam, especially mountainous regions of ideal climate conditions for planting such as Quang Tri, Son La,… experts from International Coffee Association like Australia, American,… and from local authorities directly come to these regions and hold training courses about cultivation, preservation and processing steps to produce coffee meeting global standards. According to these local reports, planting coffee creates jobs for hundreds of small households and coffee is regarded as one of the main focuses of the local economy.

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Government support

What affects the wholesale coffee prices of coffee factory in the world

The bulk coffee price of coffee factories can be affected if there is a change in the supply and demand for coffee in the global market.

  • Supply from coffee lands

The Covid-19 lockdown makes factories unable to work continuously and the number of employees working is limited, which weakens the productivity of coffee factory. Moreover natural disasters such as the Colombian La Nĩna phenomena or the droughts in Vietnam in 2020 threaten the global coffee output, in other way it reduces the input materials to factories. However, according to the world coffee annual report, the total coffee production decreased about 4% down to 10,141 MT in 2019 compared to the previous year but gradually recovered in 2020 due to the higher production in Brazil. The lower productivity of factories can not meet the stable or even rising demand for coffee in the world, leading to the going up of coffee prices.

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Supply from coffee lands

  • Higher or lower demand

Due to the Covid 19 lockdown, the demand for making coffee at home has gone up significantly from 108 MT in 2019 to 118 MT in 2020. Besides, businesses must adapt to survive, creating the gradual recovery of the global coffee industry. That is the reason why most coffee factories have to reproduce with the high productivity to satisfy the higher demand of customers, partly improving the revenue of green coffee exporting companies after the pandemic. The higher demand and the weaker production capacity make the customer burden a higher price. According to the coffee price chart, the average prices of coffee in 2021 is nearly twice higher than those in 2019 with the latter is about 2435 USD/ MT.

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Higher or lower demand

Guideline to work with reputable coffee factory effectively

Purchasing coffee in large quantities requires wholesale buyers to have a clear understanding of the 6 working steps with the global coffee factory.

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How to work with reliable coffee factory well

  • Send Letter of Intent (LOI)

A standard LOI needs to fully have basic information about the buyer profile and requirements about products. Then buyers can send it to the coffee factory so that they can consider and prepare goods as required. The more detailed the LOI is, the more reliable the buyers’ orders are.

  • Finalize the final FCO

After receiving the LOI, the coffee factory will check its products about the quantity and quality to see if they can meet the buyers’ needs and negotiate with them about the official FCO.

  • Check samples

After negotiation, buyers can ask the coffee factory to send samples so that they can test the product’s quality and make decisions about placing orders or not. If the factory is reliable, they will be not reluctant to send the buyers testing samples.

  • Sign contract

Signing a contract is an important step, which legalizes the cooperation of both parties. After this step, both sides will have to follow obligations and perform their responsibility as negotiated. If either party breaches the contract during the contract performance, it must compensate as the penalty clause agreed in the contract. Therefore, both parties need to carefully check all the terms in it before signing a contract,

  • Prepare goods

It will take the factory about 2-4 weeks to prepare the goods and deliver to the buyer depending on the agreed Incoterms terms.

  • Receive goods and feedback

Upon the receipt of products, the buyer needs to carefully check both the quality and the quantity. If there are any problems, the buyer should immediately contact the coffee factory to negotiate and resolve then both can consider further orders.

Top 5 reputable coffee factory in the world

Here are some suggestions about 5 renowned coffee factories around the world that traders should keep in mind.

Lina Premium Coffee – a reliable coffee factory in Colombia

Established in 2000, Lina Premium Factory focuses on producing high-quality coffee beans which are made mainly from Arabica. They provide a wide range of products with many varieties and numerous processing methods such as natural, cold, semi-washed, and washed processes. Their target customers are usually of high income because of the high price of coffee they produce and supply.

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Lina Premium Coffee

K- Agriculture Factory – one of the leading coffee factories in Vietnam

Supported by the Ministry of Industry and Trade of Vietnam (MOIT) and with a long history of 25 years producing and supplying top-quality Vietnamese farm products to the worldwide market, K-Agriculture Factory is prized for its best service and goods compared to others, regarding as a must-chosen coffee factory for any coffee traders.
With a widespread system of processing coffee factories across Vietnam from the North (Hung Yen) to the South (Da Lat, Lam Dong, etc) and a big warehouse capacity of over 21,000 tons, K-Agriculture Factory can provide large quantities of diverse coffee products from the commercial to Specialty coffee for big markets such as the US, the UK, Italy, Russia, etc.
For further information about the products and the best wholesale price, feel free to contact:
Email: info@k-agriculture.com
Website: https://k-agriculture.com/
Whatsapp:+84855 555 837

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K-Agriculture Factory

Trung Nguyen Legend – a popular coffee factory with Vietnamese

Trung Nguyen is defined as a highlight of many Vietnamese coffee factories. This factory can produce numerous types of coffee products from green beans to coffee powder. Their products now are present in over 60 regions in the world including large markets such as China, the EU, Germany, America, ….

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Trung Nguyen Legend

Café Pilao – one of the biggest coffee factories in Brazil

Café Pilao Factory is well known for instant coffee or coffee powder products. It owns a system of modern factories equipped with high-tech machines from Germany. Cafe Pilao is regarded as a prize of Brazilian coffee with complex flavour and special aroma. Their products now are available on reliable E-commerce platforms such as Alibaba, Amazon,….

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Cafe Piláo

Hacienda Flandes – a highlight coffee factory in Colombia

Located in the Ande Mountains, Hacienda Flandes Factory possessed a large coffee farm with modern coffee processing machines. With a long history of experience in coffee production and over 100 years of development, Hacienda Flandes is a notable factory in the coffee market that traders should consider due to their high quality and variety of products.

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Hacienda Flandes Factory

Contact information:
Phone: +84855 555 837

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