thailand specialty coffee industry

Tapping into Thailand’s burgeoning specialty coffee scene

Michelle Anindya speaks with two local coffee experts to get the inside scoop on Thailand’s rapidly emerging third wave coffee industry.

In Thailand, consumers are rapidly developing a thirst for better coffee.

The third-largest coffee producer in Southeast Asia, it is now also home to a burgeoning market and a generation of young, highly trained coffee professionals.

In 2019, Thailand’s market size for coffee was estimated at more than $1 billion, of which $33 million represented the premium coffee market – roughly equivalent to 300 cups per person per year.

In comparison, the average person in Japan, a major coffee consumer, drinks 400 cups a year. Incredibly, this number is projected to multiply by two to three times in the next five years.

Thailand is traditionally a tea-consuming country, and historically, coffee options were limited to kafae boran (very dark roasted coffee) or instant coffee. However, in the last ten years, coffee drinkers have outpaced tea drinkers, largely driven by a younger generation that demands higher-quality coffee.

Northern Thailand produces the bulk of the country’s arabica coffee in regions like Chiang Mai, the popular tourist hub, as well as Chiang Rai and Nan. Further south, production is focused on robusta.

The owner of KIFFA Coffee Company, Safak Akkose, explains that accordingly, the type of coffee consumed varies by region.

“South of Bangkok, you can find robusta,” he elaborates. “Some coffee shops still use it. In northern Thailand, it’s almost impossible to find robusta.”

Chiang Mai has long been known as the place to find the best coffee in Thailand, but other cities are catching up quickly as trends like ready-to-drink coffee, delivery services, and coffee vending machines take hold.

One example is Tao Bin, a vending machine that has won consumers over with modern technology, cloud computing, and premium coffee. Café Amazon, a household name in Thailand, has robot baristas making lattes at its Bangkok location.

The iced coffee revolution

Brave Roasters’ Ekameth “Tay” Wipvasuthi believes that many consumers now expect a premium experience with their premium coffee.

“You have to make your coffee shop really fancy,” he explains. People are willing to pay more because they pay for the experience.”

In recent years, cold coffee drinks have soared in popularity, especially in markets located in the tropics. According to Tay, every Thai coffee shop menu should include an iced latte.

Thailand also has its own coffee trends. For example, espresso yen (iced) is a popular blend of espresso, milk, and condensed milk or evaporated milk.

Another is “dirty coffee”, which contains cold milk served in a glass, topped with a hot espresso shot. Dirty coffee differs from an iced latte in that the milk and coffee aren’t mixed together, making the presentation unique.

Another popular trend is mixing coffee with orange juice. Baristas use various types of coffee, including cold brew and espresso.

Tay adds that Thai consumers love signature drinks. This adventurous market helps cultivate an environment for baristas and owners to experiment and try new recipes. “People love to choose,” he laughs.

The specialty coffee scene still places plenty of focus on hot espresso-based drinks and filter coffee, roasting coffees from Ethiopia, Panama, Colombia, and many other popular origins. Even though this market for specialty beans is relatively small, it still maintains a strong and loyal customer base.

Thailand’s coffee processing boom

Coffee consumption in Thailand has long exceeded its production, and the gap continues to grow. Between 2017 and 2018, total coffee consumption was 82,500 metric tonnes, while the country managed to produce just 28,500 tonnes.

“The production is not enough even for Thailand,” Safak explains. “This is to help you understand how many people have started drinking [coffee]. Farmers don’t even care to export the coffee beans right now, because we can sell to the local market at a good price.”

Tay adds that even local robusta does well, sometimes selling for the same price as robusta or even higher, thanks to a recent contraction of robusta production by 25%. To balance the cost, some local roasters are importing coffee from Myanmar or Laos.

However, it’s Thailand’s young farmers who are really taking advantage of the country’s new-found obsession with coffee. Many are young, highly educated, and adept at using social media. As such, they’re well connected to trends happening in more developed markets and aren’t reluctant to replicate and apply it in Thailand.

As a coffee specialist, Safak has seen Thai coffee processing evolve from basic methods to complex specialty coffee innovations.

“Producers can do the standard processing, and now they want to do fancy methods, even if it’s just to try,” he says. “It means they really understand the process.”

He adds that some Thai producers are now using fermentation during processing, with some even “adding banana leaves or bamboo shoots” as part of the experiment.

“Before, farmers would see a processing method somewhere and then copy it,” he continues. Now, they create.”

As a specialty coffee roaster, Tay has sourced from micro-lot coffee producers who process using mucilage fermentation and “amarone natural” or “yeast natural” methods. In his opinion, this has been incorporated in specialty coffee marketing.

Safak agrees, saying that because many Thai coffee farms share similar soil characteristics – thus producing similar flavours – it’s more effective to differentiate lots according to processing techniques rather than origin.

Whether it’s very good marketing, innovative farming, or a combination of both, it’s an exciting time for Thailand’s coffee industry. Not only is the domestic market growing significantly stronger, but the creativity of the Thai coffee community is driving the scene forward faster than ever before.

Tapping into Thailand’s burgeoning specialty coffee scene

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