Coffee is one of the top ten adulterated and counterfeited food items because of its high consumption worldwide. Billions of dollars are lost in sales for brands every year due to counterfeit coffee. Contaminated coffee is also a health hazard for consumers. But with advanced anti-counterfeiting solutions, brands can protect their reputation and increase their sales.
The Global Coffee Market
To understand the scale of the coffee counterfeit issue, it’s important to highlight the magnitude of the global coffee market. Each year, billions of dollars of coffee are sold worldwide, making it one of the most traded commodities.
The global revenue of the coffee segment in 2023 is expected to be USD 495.5 billion. The revenue has grown steadily over the past years and is expected to grow annually by 4.47%. This shows the significant market potential for counterfeiters to exploit.
There are three segments in the global coffee market: product type, distribution channel, and geography or region:
- Product type: There are primarily five coffee product types available for end consumers –
- Whole beans of coffee
- Instant soluble coffee
- Ground coffee
- Coffee pods
- Coffee capsules
Whole beans or roast coffee dominates the market currently with $361 billion in revenue as compared to $134 billion in revenue for instant coffee types.
- The distribution channel for end consumers is divided into two segments –
- On-trade: Sales via places like restaurants and cafes.
- Off-trade: This includes sales through supermarkets, online stores, and convenience stores.
- Geography or region: Coffee is one of the most popular beverages, being consumed all over the world – from the United States and Europe to Asia-Pacific and Africa. Here’s a revenue comparison chart, with the United States being the top consumer:
Bottom line: The types of coffee sold vary across regions and types of distribution channels. Whole beans are popular in specialty coffee shops and supermarkets, while soluble or instant coffee is more prevalent in convenience stores and households seeking quick and convenient options. The diversity in coffee offerings provides counterfeiters with opportunities to target different segments of the market.
Types of Counterfeit Coffees
Counterfeit coffee products come in various forms, ranging from diluted or adulterated coffee to blends that contain inferior-quality beans. There are more than 100 products used to counterfeit coffee. The most common adulterant is chicory. It’s cheaper than coffee beans but tastes similar to coffee.
In some regions, coffee is mixed with other ingredients, such as cereals, malt, corn, or coffee husks, to increase volume and reduce costs. These practices not only deceive consumers but also undermine the integrity of the coffee industry.
When it comes to coffee beans, fake beans for premium quality beans are common. For example, Panama Geisha coffee beans, one of the highest quality of arabica coffee, are commonly faked. A lot of buyers prefer to purchase online to get a better deal but the downside is, the buyers can’t test the authenticity of the beans until it’s delivered.
Cases of Counterfeit Coffee
Instances of counterfeit coffee have made headlines in recent years, even affecting renowned brands. Nestlé, a market leader, has faced numerous counterfeit cases in many countries. For example, recently in 2023, a factory in Egypt with over five million fake beverage packs was shut down.
In 2021, counterfeit Nescafe packages were found in Germany and Netherlands markets. The products were sold via smaller shops but it led to a significant dent in the company’s reputation and financial losses.
Similarly, Starbucks, a global coffeehouse chain, has also been a target of counterfeiters. In 2020, a Chinese food company was sued for $3.2 million for selling counterfeit Starbucks coffee products. This was the highest compensation ever demanded in consumer civil court in China, highlighting the scale of the counterfeit. The counterfeit company made sales of around 7 million yuan or approx 1 million USD in China.
How Can You Currently Check Coffee Authenticity?
You can determine how genuine your coffee is by performing a simple floating bean test. Authentic coffee beans are highly porous, low in starch, and have several air spaces. Because of this, they tend to float in water due to their lower density, while tampered beans tend to sink. This is true for coffee powder as well.
While this method provides some indication, it’s not foolproof and can vary based on how the beans are grounded, the time of roasting, and more.
Plus, this test can only be performed after purchasing a product – it can’t determine the authenticity before purchase. This is why coffee brands need to implement advanced solutions with which consumers can identify genuineness even before purchase.
Impact of Counterfeit Coffee on Consumers
Consumers who unknowingly purchase counterfeit coffee suffer a lot of harmful consequences. Apart from the disappointment of receiving a substandard product after paying the full price, there are also health risks associated with consuming adulterated or low-quality coffee.
Counterfeit coffee can contain harmful substances and allergens that pose health risks to unsuspecting consumers. The lack of quality control production results in inconsistencies in taste, aroma, and overall coffee experience, leaving consumers dissatisfied and disillusioned.
Consumers also face financial implications when purchasing fake coffee. They unknowingly pay the full price for a product of inferior quality, which not only affects their personal enjoyment but also creates a sense of distrust in the coffee market.
Impact of Counterfeit Coffee on Brand Owners
The reputation of a coffee brand is built on quality, consistency, and authenticity. When counterfeit products bearing a brand’s name or logo enter the market, it dilutes the brand’s value and integrity, undermining its position and competitiveness.
Counterfeit coffee also undermines consumer confidence and erodes trust in reputable coffee brands, impacting their purchasing decisions and potentially leading to a decline in overall coffee consumption.
Brand owners also suffer financial losses as counterfeiters profit from their intellectual property and steal the genuine brand’s market share. The economic impact extends beyond immediate financial losses, as brands need to invest additional resources in brand rehabilitation, legal actions, and anti-counterfeiting measures to protect their products and reputation.
Anti-counterfeiting Solutions for Coffee Brands
With increasing counterfeit cases, consumers need to trust your brand and the authenticity of your coffee products even before purchasing them.
The good news is, you can apply advanced anti-counterfeiting measures to your packaging without disrupting your existing production chain. There are two solutions you can apply: Alpvision Cryptoglyph and AlpVision Fingerprint.
AlpVision Cryptoglyph is a type of covert solution and can be applied to printed packaging, labels, or flexible bags used for coffee products. It adds thousands of micro-holes on the product packaging printed layer. The holes are invisible to the naked eye but can be easily verified using a simple smartphone app.
On the other hand, AlpVision Fingerprint can be used to protect plastic closures for soluble coffee packaging. This technology leverages the individual patterns of a product surface, in this case, the mold of the plastic closure, making it practically impossible to counterfeit. This can also be identified with a simple mobile app.
What’s more, there’s no additional cost to embed any of the technologies into your production process. You can integrate them into your existing production,
By incorporating these advanced security measures into your packaging and production processes, you can protect your products, maintain consumer trust, and safeguard your reputation.
Combat Coffee Counterfeiting with Multi-Layered Protection Solutions
In conclusion, counterfeit coffee has significant risks to consumers and damages brand reputation, resulting in financial losses. However, with the implementation of anti-counterfeiting technologies, it’s possible to protect coffee brands and consumers from the menace of counterfeit coffee.
Along with technological solutions, brand owners must invest in resources to spread awareness among consumers and industry stakeholders. Providing information on how to spot counterfeit coffee, the health risks associated with consuming such products, and the importance of purchasing from trusted sources will empower consumers to make informed choices.
You can read more about the best anti-counterfeiting solution in our whitepaper here.