A brief (4 page) analysis of the coffee crisis. Analysis of the article, The Coffee Crisis (2004) by Gomez-Ibanez and Quinlan.
Competing on a global scale for coffee exporters has proven to not be as profitable as it once was. This decline can be due to a number of contributing factors. There are many different variables that need to be taken into consideration when pondering the reasons for the coffee crisis. The countries which export and the counties that import are very important. The consumption of coffee beans by county plays a big role. The type of land and weather that a producing county has can be very important to the overall production. Success in this type of industry will be determined by having Mother Nature mercy you, having the right type of geography, and having the products that your customers want.
Having the right weather and resources can be very important to being profitable in the industry. Having the right land to grow certain products is also a must. Certain crops are going to better in certain areas than others. Weather can be a very unpredictable factor when dealing with agricultural type products. A surprise frost or flood can wipe out an entire supply of a product leaving the producer out everything that they put into it. Having many bad years due to weather can leave a producer so far in the hole that they cannot come back from it.
The International Coffee Agreement (ICA) stopped production of certain coffee beans and certain areas by producers so that they could remain in compliance with the agreement. This agreement was a fair attempt to regulate supply of coffee beans and keep a control on the industry. This regulation also had an impact on what types of beans were produced since certain areas where only capable of producing certain types of coffee beans. The ability to produce different types of coffee ...
An inside look at the coffee crisis and the impact the industry had on business.