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The coffee value chain

Who handles coffee between the farm and the cup – producers, collectors, cooperatives, mills, exporters, trading houses, importers, roasters and retailers – what each one does, and where ownership and bargaining power concentrate.

Across the chain: Sustainability

Source-checkedby Coffearium verification pass· Last source-checked 24 Oct 2026· Prepared with AI assistance· 15 sources (8 tier A)· 2 contested· Updated 24 Oct 2026· Literature last searched 24 Oct 2026
Reading depth
Contents
  • A value chain is all the people and organisations that carry a product from its start to the consumer; for coffee, from producers to those who serve the cup.1
  • In 1998 the two largest roaster groups held 49% of the world market for roasted and instant coffee, the top five 69%; the two largest green coffee traders held 29%.3
  • After the International Coffee Agreement’s quotas lapsed in 1989, coffee boards in many producing countries were dismantled and bargaining power moved towards roasters.3,4
  • Producing countries still organise sales differently: Kenya through an exchange dating from the 1930s, Ethiopia through one since 2008, Colombia through a growers’ federation that also exports.12,13,14

What a value chain is#

A value chain is all the people and organisations that carry a product from its start to the consumer. For coffee, a textbook chapter lists producers, suppliers, processors and those who serve the drink.1 The same chapter states that the total value is decided when the consumer buys.1

The word “chain” suggests one line, but coffee takes many routes, and some actors are skipped. A lot is a batch of coffee from one origin and process, traded as a unit. This entry describes who the actors are, what each one does and where control sits. How much money each one keeps is covered in Who earns what along the chain.

From the farm to the export port#

Producers grow the coffee. They range from smallholders to large plantations.13 In Colombia, an estimated 60% of production comes from farms of less than 5 ha.12 Kenya’s production is described as increasingly dominated by smallholders.13

Collectors, often called middlemen, buy small quantities from farms and sell them on. In Ethiopia before 2008, producers sold their harvest to licensed collectors, who sold it to licensed suppliers.14 Cooperatives pool their members’ coffee instead. In Kenya, cooperative-owned mills gather coffee from small farms.13

Processors run the wet and dry mills that turn cherry into green coffee (see Hulling and dry milling). Mills can belong to cooperatives, plantations or exporters.13,14 Exporters sell the green coffee to buyers abroad.2,13 The terms are set in standard contracts (see Green coffee contracts).

From the export port to the cup#

International trading houses buy from exporters and sell to roasters. According to a 2018 NGO report, they handle export and import, logistics, storage, risk management and finance, and they work mainly in bulk grades on thin margins.7 How much of this trade runs through Switzerland is covered in Switzerland and the coffee trade.

Importers and agents bring coffee into the consuming country and sell it to roasters. According to the textbook, large conventional roasters rely almost entirely on this importing trade.2 Roasters turn green coffee into a branded product. Some specialty roasters buy free on board (FOB) from exporters or cooperatives, and some buy directly from producers (see Direct trade).2 Retailers and cafés sell the coffee to the consumer.1

1Producerssmallholders, plantations 13 2Collectorsbuy from farms 14 3Cooperativespool members’ coffee 13 4Wet and dry millscherry to green 13 5Exporterssell abroad 2 producing countryconsuming country6Trading houseslogistics, risk, finance 7 7Importers, agentssupply roasters 2 8Roasterstop 2: 49% (1998) 3 9Retail, cafésserve the cup 1 direct purchase, FOB 2 usual route of the coffeeshorter routeSchematic, not to scale. Routes and roles differ by country.
The main actors from farm to cup and the usual route of the coffee; dashed lines show shorter routes named in the sources. Routes and roles differ by country. Schematic, not to scale.1,2,3,7,13,14

Where ownership and power concentrate#

After export, few firms handle much of the coffee. In 1998 the two largest roaster groups, Nestlé and Philip Morris, held 49% of the world market for roasted and instant coffee. The top five held 69%.3 In the same year the two largest green coffee traders, Neumann and Volcafe, held 29% of the market.3

Later figures use other bases. A 2021 study, citing a market-data company’s retail shares, gives 38% of global roast and instant coffee for Nestlé and Jacobs Douwe Egberts in 2014.9 Two NGO reports also estimate the share of the ten largest roasters, but on other bases and partly from the same report series, so they are not independent of each other.7,8 These numbers cannot be compared directly (see Contested).

Concentration shapes who sets the terms. A 2019 review finds that buyers now have more bargaining power over other members of the chain than they had for a long time.4

Why the structure matters for producers#

Until 1989, export quotas under the International Coffee Agreements aimed to prevent oversupply and keep prices within a band (see The International Coffee Agreements).4 The quota system lapsed in 1989.4 Many producing countries then dismantled the coffee boards and institutes that had regulated export sales.3,4 A 2019 review links this to weaker bargaining power for producing countries and producers.4

Producers usually have to accept the price the market offers, even when it does not cover their costs.1 A 1997 study cited in the review estimated that producers’ share of total coffee income fell from about 20% in 1971–1988 to 13% in 1989–1995.4 Shares from other studies, years and countries are compared in Who earns what along the chain.

A 2005 book calls the result a “coffee paradox”: a coffee boom in consuming countries alongside a coffee crisis in producing countries.5 Its explanation is that consumers pay mostly for symbolic qualities and services, not for the material coffee that producers sell.5

How big the chain is#

The International Coffee Organization (ICO) reports that the value of coffee exports grew from USD 8.4 billion in 1991 to USD 35.6 billion in 2018.10 The summary does not say which forms of coffee this includes. For green coffee, an ICO overview of 2022 gives an average export value of about USD 20 billion a year.11

The often-quoted figure of “over USD 200 billion” for the whole industry is an estimate, not a statistic. The 2018 Coffee Barometer dates it to 2015 and traces it to a 2017 report for the World Intellectual Property Organization (WIPO).7 The 2022 ICO overview uses it, for revenues at retail level, without a source.11

Reference values: who does what#

Actor Main functions Where it sits Source
Producers (smallholders, estates) Grow and harvest; some process on the farm Producing country 12,13
Collectors, suppliers Buy from producers and resell to suppliers, mills or the market Producing country 14
Cooperatives, cooperative unions Pool members’ coffee; run mills; some export Producing country 2,13,14
Wet and dry mills Turn cherry into parchment and green coffee; hold stock (Kenya) Producing country 13
Exporters Sell green coffee abroad, often FOB; hold stocks (Kenya) Producing country 2,13
International trading houses Export and import, logistics, storage, risk management, finance Both; head offices often in consuming countries 7
Importers, agents Bring coffee in, supply roasters Consuming country 2
Roasters Blend, roast, pack, brand Mostly consuming countries 2,10
Retailers, cafés Serve or sell to consumers Consuming country 1

Roles overlap. Since 2017, for example, Ethiopian exporters may own washing stations.14 According to the ICO’s 2020 report, processing takes place mainly in higher-income regions, and Europe and North America accounted for more than 96% of roasted coffee exports in 2018.10

Reference values: concentration and size, as dated#

Measure Value Date and basis Source
Two largest roaster groups (Nestlé, Philip Morris) 49% 1998, world market share, roasted and instant 3
Five largest roaster groups 69% 1998, world market share, roasted and instant 3
Five largest buyers of world coffee ≈2/3 1998, citing Ponte (2002) 9
Two largest roasters (Nestlé, Jacobs Douwe Egberts) 38% 2014, global roast and instant coffee; retail shares from a market-data company 9
Two largest green coffee traders (Neumann, Volcafe) 29% 1998, market share 3
Value of annual coffee exports USD 8.4 billion → USD 35.6 billion 1991 → 2018, ICO statistics 10
Value of green coffee exports ≈USD 20 billion a year ICO overview, 2022 11
Whole industry ≈USD 200 billion Estimate for 2015 (NGO report); retail revenues (ICO overview, 2022); not a statistic 7,11

No source consulted for this entry gives the share of the largest green coffee traders after 1998 with a stated method. No figure is given here for the ten largest roasters: the two NGO estimates consulted rest partly on each other and do not meet the sourcing rule (see Contested).7,8

How value chains are governed#

Value chain research asks who coordinates a chain and how. A 2005 theory paper distinguishes five types of governance: hierarchy, captive, relational, modular and market.6 They range from tight coordination with strong power asymmetry to loose coordination with little.6

Applied to coffee, a 2002 study argues that the chain after the International Coffee Agreement behaves as a buyer-driven chain.3 In buyer-driven agricultural chains in general, the study names large retailers in industrialised countries, brand-name merchandisers and international trading companies as the key actors; in coffee it calls the chain roaster-driven.3 The study also found that producer organisations could not replace governments as organisers of exports. Local exporters could not raise the funds to compete with international traders.3

A 2019 review traces the chain through several phases. Its table names roasters as the strongest actors, in some cases also retailers, and finds that government bodies withdrew to oversight or disappeared during liberalisation.4 The 2005 book on the coffee paradox argues that producers will keep receiving low prices unless they control at least parts of the “immaterial” production of symbolic quality and services.5

Market structures in producing countries#

Liberalisation did not make every country alike. Three examples show different ways from producer to export.

Colombia. The Colombian Coffee Growers Federation (Federación Nacional de Cafeteros, FNC; the USDA report calls it Fedecafe) represents the sector and manages its programmes.12 Most programmes are funded by the National Coffee Fund, which levies USD 0.06 per pound of coffee from producers, as stated in a 2025 USDA report.12 On average the FNC accounts for 18% of Colombian coffee exports; private companies export the rest.12 The country has over 550,000 producers.12

Ethiopia. The Ethiopia Commodity Exchange (ECX) was launched in 2008.14,15 Coffee was traded on it from December 2008.14 All coffee trade then had to pass through it; only cooperatives and large estates were exempt and could export directly after ECX grading.14,15 Coffee sold on the exchange lost its traceability to the farm. This applied to 80% of Ethiopian coffee exports; the 20% exported by cooperatives and estates kept it.14 In 2017 the rules were changed. Exporters may now sell directly to buyers abroad, bypassing the ECX, and may own washing stations.14,15

Kenya. Producers sell through the Nairobi Coffee Exchange (NCE), a spot market dating from the 1930s, through marketing agents they authorise.13 They may also sell directly to buyers abroad; such contracts must be registered with the Coffee Directorate.13 Millers, marketing agents and exporters hold the stocks, and the government runs no specific price support programme for coffee farmers.13 This describes the system in 2017; later reforms were not checked for this entry.

Colombia, 20251Producersover 550,000 12 2FNC and private exportersFNC 18%, private firms the rest 12 Ethiopia, from 20083Farmers4Collectors, supplierslicensed 14 5ECXfrom Dec 2008 14 6Exporterscooperatives, large estates: exempt 14 since 2017: exporters sell directly, bypassing the ECX 14,15 Kenya, 20177Smallholders,plantations 13 8Millscooperative, estate 13 9Marketing agents13 10Nairobi exchangesince the early 1930s 13 direct sale, registered with the Coffee Directorate 13 Exportmain routeother legal routeSchematic, not to scale. Each lane as described in the source for the year shown.
Main routes from producer to export in Colombia, Ethiopia and Kenya, as described in the sources (Colombia 2025, Ethiopia 2008–2017 and after, Kenya 2017). Schematic, not to scale.12,13,14,15

Finance and payment terms#

Money moves along the chain more slowly than coffee. A 2019 review reports that roasters owned by investment funds extended the time they take to pay traders from an industry standard of 30 days to up to 120 days, citing a 2015 trade report.4 It argues that this turns traders into cheap sources of capital for roasters, a role many smaller and regional traders cannot fill, and so adds to the dominance of a few multinational traders.4 According to the textbook, a model of investor-owned coffee companies restricts supply to merchants who can tie up capital for long periods, and so excludes small exporters and independent traders.2

At the other end, cooperatives often need pre-financing to buy their members’ coffee. They usually sell before the harvest to get it.1 If prices then rise, members may sell to middlemen who pay cash, and the cooperative can fail to deliver.1 How such forward sales are priced is explained in How a coffee price is made.

Open questions#

  • Current trader concentration. No peer-reviewed or official source consulted for this entry measures the market share of the largest green coffee traders after 1998.3,7
  • Number of coffee farms. The 2018 Coffee Barometer notes that the widely used estimate of smallholder numbers had stood unchallenged for 15 years; no count consulted for this entry meets the sourcing rule.7
  • Effects of the 2017 Ethiopian reform. The rules now allow direct sales and traceable lots; no source consulted here measured the effect on producer prices.14,15
  • Kenya after 2017. The description of the Kenyan system rests on a 2017 report; later changes were not checked.13

Key studies#

Ponte, 2002 – The “latte revolution”. Uses global commodity chain analysis to show how the end of export quotas, new consumption patterns and corporate strategy changed the coffee chain. It finds power shifted to transnational roasters and traders and gives their market shares for 1998.

World Development 30(7), 1099–1122 · doi:10.1016/S0305-750X(02)00032-3

Daviron and Ponte, 2005 – The coffee paradox. A book-length analysis of why a boom in consuming countries coexists with a crisis in producing countries. It argues that value lies in symbolic quality and services that producers rarely control.

Zed Books, London · agritrop.cirad.fr

Grabs and Ponte, 2019 – The evolution of power in the coffee chain. Traces the chain from the quota era through liberalisation to the rise of sustainability standards. The kinds of power changed, but the gap between buyers and producers did not.

Journal of Economic Geography 19(4), 803–828 · doi:10.1093/jeg/lbz008

Mbakop et al., 2023 – Traceability in Ethiopia. Uses the 2008 and 2017 rule changes of the Ethiopia Commodity Exchange as a natural experiment. It describes how the exchange removed traceability for most exports and how the 2017 reform restored direct sales.

Agriculture 13(2), 368 · doi:10.3390/agriculture13020368

Ghoshray and Mohan, 2021 – The retail–international price margin. Analyses how retail coffee prices respond to international prices and suggests that concentration among roasters could explain the asymmetric response. It summarises roaster concentration in 1998 and 2014.

European Review of Agricultural Economics 48(4), 983–1006 · doi:10.1093/erae/jbab027

Contested
  • Size of the largest roasters’ share: a 2002 study gives 49% of the world market for roasted and instant coffee for the top two roaster groups in 19983; a 2021 paper, citing a market-data company’s retail shares, gives 38% of global roast and instant coffee for the top two in 2014.9 Two NGO reports estimate the share of the ten largest roasters on other bases (world coffee in 2018; volume sourced as a share of world exports in 2024), partly from the same report series and from company data.7,8 The data providers and bases differ, so the figures do not show a trend on their own.
  • Whether power in the chain has shifted since the 1990s: a 2019 review finds that the kinds of power exercised along the chain have changed, but that the underlying inequities between buyers in consuming countries and producers have not.4 A 2002 study described the change after 1989 as a move from a balanced contest between producing and consuming countries to the advantage of transnational corporations.3
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Change log

  • – Nairobi Coffee Exchange: “in existence since the early 1930s” changed to “dating from the 1930s”. Reason: Later USDA reports and the ICO date the exchange to 1935 (first auction September 1935); “the 1930s” agrees with all sources. See the kenya entry.
  • – The share of the ten largest roasters (“more than a third”) was removed from the body, table and contested list. Reason: The IISD report gives nearly 43% of world exports (2024), and its estimate builds on the Coffee Barometer series, so the two NGO reports are not independent and the number fails the sourcing rule.
  • – Payment terms: roasters owned by investment funds extended the time they take to pay traders (30 to up to 120 days), which makes traders a source of cheap capital and adds to the dominance of a few multinational traders. Reason: The entry had reversed who gives the terms and overstated the review’s conclusion (Grabs and Ponte 2019, footnote 11).
  • – The Nairobi Coffee Exchange is described as a spot market, not an auction (text, brief and figure). Reason: The cited USDA report (2017) calls it a spot market.
  • – Removed the claim that the ICO export value series counts all forms of coffee; dated the 96% share of roasted coffee exports to 2018. Reason: The ICO summary does not state the forms included and gives the year 2018 for the 96% share.
  • – Large retailers, brand-name merchandisers and international traders are now given as Ponte’s key actors of buyer-driven agricultural chains in general; for coffee the study calls the chain roaster-driven. Reason: The source makes the first statement about agricultural chains in general, not about coffee.

Sources

  1. BPerez, J.; Kilian, B.; Pratt, L.; Ardila, J. C.; Lamb, H.; Byers, L.; Sanders, D. (2017). Economic Sustainability – Price, Cost, and Value. In: Folmer, B. (ed.), The Craft and Science of Coffee, Academic Press, ch. 6, pp. 133–160.
  2. BNadelberg, E.; Polit, J. R.; Orjuela, J. P.; Ranitzsch, K. (2017). Trading and Transaction – Market and Finance Dynamics. In: Folmer, B. (ed.), The Craft and Science of Coffee, Academic Press, ch. 9, pp. 205–224.
  3. APonte, S. (2002). The ‘Latte Revolution’? Regulation, Markets and Consumption in the Global Coffee Chain. World Development 30(7), 1099–1122. doi:10.1016/S0305-750X(02)00032-3 · other copies
  4. AGrabs, J.; Ponte, S. (2019). The evolution of power in the global coffee value chain and production network. Journal of Economic Geography 19(4), 803–828. doi:10.1093/jeg/lbz008 · other copies
  5. ADaviron, B.; Ponte, S. (2005). The Coffee Paradox: Global Markets, Commodity Trade and the Elusive Promise of Development. Zed Books, London, 319 pp. (ISBN 1-84277-457-3).
  6. AGereffi, G.; Humphrey, J.; Sturgeon, T. (2005). The governance of global value chains. Review of International Political Economy 12(1), 78–104. doi:10.1080/09692290500049805 · other copies
  7. BPanhuysen, S.; Pierrot, J. (2018). Coffee Barometer 2018. Hivos; participating organisations: Conservation International, COSA, Hivos, Oxfam Wereldwinkels, Solidaridad.
  8. BLuna, E.; Trottier-Michaud, V. (2026). Coffee and Sustainability (Global Market Report, Sustainable Commodities Marketplace Series). International Institute for Sustainable Development (IISD), Winnipeg.
  9. AGhoshray, A.; Mohan, S. (2021). Coffee price dynamics: an analysis of the retail-international price margin. European Review of Agricultural Economics 48(4), 983–1006. doi:10.1093/erae/jbab027 · other copies
  10. A/BInternational Coffee Organization, Executive Director (2021). ICO Coffee Development Report 2020: The value of coffee – sustainability, inclusiveness and resilience of the coffee global value chain (ED 2357/21). International Coffee Organization, London.
  11. A/BPatacconi, G. (2022). ICO Report – Coffee Market Overview (13th Multi-year Expert Meeting on Commodities and Development). International Coffee Organization, presented at UNCTAD, Geneva, 10–12 October 2022.
  12. A(2025). Colombia: Coffee Annual (CO2025-0014). USDA Foreign Agricultural Service, GAIN report.
  13. A(2017). Kenya: Coffee Annual (2017). USDA Foreign Agricultural Service, GAIN report.
  14. AMbakop, L.; Jenkins, G. P.; Leung, L.; Sertoglu, K. (2023). Traceability, Value, and Trust in the Coffee Market: A Natural Experiment in Ethiopia. Agriculture 13(2), 368. doi:10.3390/agriculture13020368 · other copies
  15. BMas Aparisi, A. (2021). Ethiopian coffee marketing reforms and smallholder coffee producers: A socio-legal empowerment lens. International Institute for Environment and Development (IIED), London.

Tier A · authoritative · B · trade and expert · C · general. Supporting quotes for every source are in the data version of this entry. If a publisher’s site refuses access, try the doi link or “other copies”.

The literature for this entry was last searched on 24 Oct 2026. A statement that no source consulted for this entry shows something refers to the sources above; newer or missing work may exist.

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