Will Coffee Surrender to Tea in the East –West Struggle?

Coffee and tea continue to beat all other beverages in sales and popularity. And while chocolate competes with both in the cold winter days, its business value as a beverage is a fraction of that of coffee or tea. Both beverages compete for menu space in most eateries whether offering fast food or offering nouvelle cuisine.

Their centuries old appeal has recently been reinforced with the introduction of sophisticated coffee strains and exotic tea herbs. Both industries have grown at a very fast rate over the las decade representing today billionaire industries that thrive on the continuously growing appetite of new generations for adventure which includes searching for new flavors, sounds and images.

The world largest coffee market is the US with about 20,000 coffee shop businesses representing combined revenues of $10 billion in 2011, Last year, Americans bought 797,000 tons of coffee, followed by Brazil at nearly 676,000 tons and Germany at 375,000 tons. The top three tea markets in terms of retail value in 2014 were China, Russia, and Japan with market values of $9.7 billion, $4.0 billion, and $3.5 billion respectively, The US enjoys the fourth position based on the sector’s retail value of $2.4 billion in 2014.

And as globalization proceeds and the East-West trade corridor rises, many experts forecast that both beverages will face off in a duel to impose itself on the drinking preferences of 21^stcentury generations. This would be a re-enactment of the historical battle initiated after Venice introduced both beverages to the West around the 17^th century. Coffee’s journey started in Ethiopia on 11^th century proceeding to Yemen in its early world expansion.

Istanbul received coffee under the reign of Sultan Suleiman the Magnificent introduced by Özdemir Pasha, the Ottoman Governor of Yemen. From Istanbul coffee went to Venice and in 1645 the first coffeehouse opened in Italy. Coffeehouses soon sprang up all over the country and, as in many other lands, they became a platform for people from all walks of life, especially artists and students, to come together and chat.

Paris welcomed coffee in 1669 brought to the city of light by Hoşsohbet Nüktedan Süleyman Ağa, Sultan Mehmet IV’s  ambassador to the court of King Louis XIV of France. Paris’s first coffeehouse, Café de Procope, opened in 1686. Then came London which became acquaintance with coffee in 1637 when a Turk introduced the drink to Oxford.

It quickly became popular among students and teachers who established the «Oxford Coffee Club». By 1660, London’s coffeehouses had turned into the central nervous system of its social culture. «Penny Universities» as they were called coffee houses enjoyed an enlightened sponsorship which included writers, artists, poets, lawyers, politicians and philosophers.

Coffee reached  the shores of North America in 1668. The first coffeehouse in New York, «The King’s Arms», opened in 1696. By 1730, the British began cultivating coffee in Jamaica. By the mid-19th century, coffee had spread to South America , notably to Venezuela, Colombia, Ecuador and Brazil to become one of the most important commodities in world trade.

Tea followed a similar route although its pedigree is far older and classier beginning in 2737 BC when Chinese Emperor Shen Nong  found a tea leaf in his boiling water pot and loved the taste of the infused drink. Not until the Ming Dynasty (1368-1644) was tea prepared by immersing leaves in water. Marco Polo is credited with having brought for the first time tea to the West with commercial purposes. Tea really arrived in the West during the 16th century but was not seriously traded until Dutch merchants discovered its potential.

In 1610, the first shipments of Japanese and Chinese tea arrived in Europe via ships chartered by the Dutch East India Company. Russia benefited early on through the famous Silk Road. Attraction for tea quickly spread to major European cities including Amsterdam, Paris and London. But contrary to coffee, its high price limited consumption to royal families and aristocrats. The English were not immediately enthused by tea. Coffee remained the preferred drink in coffee houses frequented by men. Preference for tea was spearheaded by women who fell in love with the refined drink.

In 1657,  Thomas Garraway opened the first tea shop in England Teamania took off!!!  The drink gained further legitimacy when Charles II married Catherine of Braganza, who introduced tea time to the court. This was the first historical face-off between tea and coffee where tea wiped coffee away in British preferences. Tea initially came to America in the 1600s through the New Amsterdam, today known as New York, where the Dutch settlers imported tea from China.

A favorite of colonial women and wealthy colonists, a heavily taxed tea trade flourished between the colony and England. Heavy taxation led to the Boston Tea Party which, in turn, led to the fight for independence from England. Starting in the 1850s, the US began importing tea directly from China. Iced Tea made its debut in  1904 at the World Fair in St. Louis, Missouri. With a view to promote sales, a  tea merchant dumped ice into the hot brewed tea to make it more appealing under the summer sun. Today, ice tea sales make up at least 80% of the entire U.S. tea market. Thomas Sullivan  from New York is often credited with creating the first commercial tea bag concept. Today, tea is the world’s most popular beverage after water.

Coffee however is ready to reenact the history long duel. Armed with its medically proven health promoting properties coffee is gaining ground every day in the largest world market: China. Starbucks has more than 1,700 stores in mainland China and hopes to exceed 3,400 in the country by 2019. «China’s population consumes just 4.5 billion cups of coffee a year, well below North Americans, who drink 133.9 billion cups a year, From 2014 to 2019, Chinese coffee consumption should rise 18%,  while U.S. growth is expected to be 0.9% in that time» according to the National Coffee Drinking Study from the National Coffee Association.

In the US,  40% of 18-24 year olds are drinking coffee each day — a rise from  31%. 54% of adults age 25-39 reported drinking coffee each day, another increase from 44% .Coffee drinkers still outnumber tea drinkers in the U.S.: 183 million coffee drinkers to 173.5 million tea drinkers. In 2012, combined sales of coffee and tea at restaurant and drinking places totaled $18.7 billion. Over the last decade the most vibrant market segment is specialty coffee drinks (cappuccinos, lattes, Americanos and Macchiatos).

This trend flies on the Macchiato’s headwinds which has seen its demand increase by 50% since 2007. Specialty coffees represent 37% of US coffee cups and are considered the highest quality in the world. The retail value of the U.S. coffee market is estimated at $30-32 billion dollars, with specialty comprising 50% value share. Coffee is thus well prepared to put a good fight in the beverages market vis-a- vis tea. We are thus about to witness a historical encounter between Confucius and Suleiman!!!!