Income
Income is an important factor affecting the demand for coffee. In
many ways this is not surprising especially as coffee is still perceived by
many to be a luxury item, especially in low income countries. There is clear
evidence that consumption is highly dependent not only on absolute income
levels but also, and probably more importantly, on changes in real income
levels.
In countries that have a history of drinking coffee, there seems to be a direct
correlation between the level of income and the level of consumption. For
example, high per capita consumption is found in Scandinavia (by far the
highest in fact), and other European countries as Germany, Switzerland,
the Netherlands and Austria. All these countries have a history of
drinking coffee and also enjoy relatively high personal incomes. Clearly habit
and tradition play a significant role in determining the overall level of
consumption in a country, but it is noticeable that countries that also have a
tradition of drinking coffee but have lower personal incomes, such as Spain,
Portugal and Greece, have a considerably lower rate of consumption.
Given that coffee is still considered to be a luxury item in many consuming
countries, it is not surprising that, as a general rule, changes in real
incomes have a greater effect on consumption in low income countries than they
do in high income countries. For example, Spain has witnessed a relatively fast
rate of growth in the consumption of coffee per head in recent years and has
also experienced a fairly impressive rate of growth in its overall level of
real disposable income per head, whereas in many Scandinavian countries
consumption has either remained static or fallen although real income levels
have continued to rise.