Throughout its history, coffee culture has been riding a few waves. Describing the constant ebb and flow of the industry, these four waves give insight to how the caffeinated beverage we hold near and dear has evolved. Ask anyone who dabbles in coffee to explain it and the floodgates will surely open up.
WHAT IS A WAVE OF COFFEE ?
A wave of coffee essentially refers to a period of time within the coffee industry, where big changes and innovations have occurred. Many global cultural trends have also emerged throughout the waves, from consumer drinking habits/attitudes and how the high street looks to the manufacturing and growing processes. These changes are basically like mini Industrial Revolutions for the coffee industry, which has disrupted the norm but also made permanent changes and alterations to consumption and attitudes.
UNDERSTANDING THE DIFFERENT COFFEE WAVES
- the first wave represents the shift from novelty to commodity,
- the second wave represents a shift from commodity to culture,
- the third wave represents a shift from culture to consumer awareness,
- the forth wave represents the shift from crafty to scientific
- the fifth wave implies “constantly scaling high quality to achieve a highly successful, customer-focused and sustained business outcome
Occasionally, the waves overlap; and one inevitably spills over to influence the next.
These waves can be caused by shifts in consumer attitudes and market dynamics, along with technological innovations, or can be driven by of changed situations within the coffee industry itself (such as bean quality, sourcing practices,….) -> outside in/inside out.
The European and American coffee markets in particular have already experienced several waves of coffee. By learning more about these different coffee waves, you can clearly see how coffee is evolving and where it is going.
DEEPDIVING INTO THE DIFFERENT COFFEE WAVES
- The First wave is marked by the start of instant coffee when anyone could boil water at home & make coffee. The most important point of this wave was to make coffee a basic item that could be found in every household.
- Coffee becomes a commodity, its consumption exponentially.
- First wave coffee refers to coffee sold in bulk, primarily to restaurants, hotels, diners, and other large establishments like supermarkets.
- First wave coffee focuses on low price and consistent taste. Many restaurants offered free refills.
- In this period people cared only about getting the “caffeine kick” more than the quality, the origins of the coffee were not important as well as the flavour.
- Most first wave coffee has no info about what country it was grown in or how it was processed and is likely a blend of origins and roast levels.
- Common Signs of First Wave Coffee: artificially or “naturally” flavored beans, language of “premium” or “gourmet”, primarily pre-ground offerings, super dark, bitter coffee, the supermarket coffee aisle
- The key factors were the convenience and accessibility of this product.
- Innovations: Instant Coffee, Vacuum packaging, Air-tight cans, pre-ground portion packs
- Important figures/companies: Supermarkets, Nescafé, Juan Valdez
- We see the rise of individual brands attempting to set themselves apart by selling coffee that is a cut above first wave coffee.
- Second wave coffee is more concerned with producing higher quality coffee than selling as much coffee as possible, and the result is a slightly better experience.
- People started to appreciate the drink more and wanted to go beyond just drinking it for the caffeine. Consumers became more interested in where the coffee came from, how best to drink it, and how to cater the taste to their preferences.
- Drinking coffee became more of an experience. The emphasis here was on the ambience of the cafe, and the high level of customer service from the barista.
- The Second Wavers’ entrance was artisan driven, someone turned them on to coffee origins and roasting styles. They looked to the wine industry for inspiration in defining goals & strategies.
- TV shows like “Friends” and “Seinfeld” perfectly capture this transitionary period in coffee history
- Compared to first wave coffee, second wave coffee tends to be less darkly roasted.
- Common Signs of Second Wave Coffee: heavy focus on flavored drinks, fairly dark, bitter coffee, slight recognition of coffee origin country, baristas who are passionate about the cafe, but not the beans themselves.
- Innovations: all kinds of coffee-based beverages, e.g. Starbucks began mixing espresso with sweet flavoured syrups and creams, creating drinks such as the Frappuccino.
- Important figures/companies: Starbucks is an example of a hyper-Second Wave. Their goal of ‘2000 outlets by the year 2000’, have exceeded their objective by far and have set the pace for the Second Wave company. They helped introduce the words ‘latte’, ‘French Roast’, and ‘cappuccino’ into consumers’ vocabularies -not to mention their daily lives, Coffee Shops e.g. Central Perk
- The late 2000s/early 2010s make the start of the third wave when coffee went craft with a hyper-focus on quality primarily driven by coffee shops.
- The third wave of coffee is characterised by the shift in focus to the finer details of the coffee, third wave coffee is a luxury commodity and is the equivalent of gourmet food to a foodie.
- Third wave coffee evolved from a niche community that was highly focused on the quality and provenance of the coffee beans.
- This small group of roasters and cafes was experimenting with lighter roast levels and bringing new, exotic flavours out of well-grown coffees.
- The quality of the coffee became very important, and with it, a lot of other aspects of the coffee such as the formation and professionality of the barista, the traceability of the coffee beans, micro roasters and fair-trade coffee just to mention a few.
- Unlike first or second wave coffee, third wave coffee is always labeled with the bean’s origin, a roast date, and whether or not the coffee is fair trade.
- The fair trade movement is unique to third wave coffee and is concerned with ensuring coffee farmers are compensated fairly compared to other arms of the coffee industry.
- The beans can be light or dark roasted -or in between- but, in general, third wave coffee is lighter than first or second wave coffee.
- Even blended third wave coffee is clearly labeled with origins for each component of the blend, leaving no room for uncertainty.
- Common Signs of Third Wave Coffee specific flavour notes (eg. honey sweetness, rose aromatics, and orange acidity), lighter roast profile, latte art, single origin (single farm, estate) beans, high degree of origin transparency, manual brewing methods like pour over cones and french presses
- Important figures/companies: The term ‘wave’ was coined by Trish Rothgeb back in 2002. In the Roasters Guild Publication, she defined the first three Coffee movements as “waves”, Timothy J. Castle, Specialty Coffee Association.
- Science serves as the foundation of the fourth wave of coffee; technology is used to take coffee experiences to the next level.
- People want better coffee at a price they can afford. Fourth-wave coffee shops show the potential of science, scalability, and sustainability in a market that was once dominated by major distributors.
- By removing the exclusivity of the third wave and refining its taste with techniques, more and more people are introduced to high-quality coffee at an accessible price point.
- Fourth wave coffee is defined by studying the food science and chemistry of coffee, making precise measurements during the brewing process, and developing new, innovative brewing methods using insights gained from a better understanding of coffee on a chemical, scientific level.
- While coffee shops defined second- and third-wave coffee, fourth-wave coffee innovation will center around the home. Many Gen Z’s upgraded their home coffee bars during the pandemic in response to the closure of coffee shops and mandated work-from-home policies.
- A new focus on the whole coffee experience beginning at the farming operations through roasting and brewing.
- Convenience is key – that’s the thought behind one of coffee’s hottest trends, RTD Coffee. Ready-to-drink (RTD) coffee refers to canned or bottled cold coffee products sealed for whenever you’re ready to sip.
- Common Signs of Fourth Wave Coffee: Water chemistry, coffee properties, caffeine levels, brewing temperatures, specialized equipment, cool brews,
- Innovations: cool brew, RTD coffee
- Interesting figures/companies: artisan barista’s, coffeetok influencers
FIFTH COFFEE WAVE *
- The fifth wave of coffee is a concept developed and defined by the Allegra World Coffee Portal after two decades of study and analysis of the coffee market. 5th Wave is the culmination of all four previous ‘waves’ of industry development.
- The 5th Wave represents a quantum leap in the calibre of vision and execution required to meet the desires, needs and aspirations of today’s highly savvy and technically engaged millennial audience and tomorrow’s Gen Z.
- The Fifth Wave is about business and success, from creating professional careers in the sector to creating sustainable and profitable businesses with a strong and high-end (Premium) coffee offering.
- These businesses also have the particularity that they have a high vision of the future, they are highly commercialized, they probably use digital media such as social networks to get their message across and create a tribe.
- The 5th Wave is characterised by hyper-professionalism, operational excellence, investment in technology and training, and people development programmes – ultimately supporting valuable career paths for a new breed of hospitality professionals.
- Reflects a powerful new era of scaled boutique hospitality and is the current ideology shaping business trends across the global coffee industry.
- Put simply, 5th Wave implies scaling up consistent high quality to achieve a highly successful, customer-centric and sustained business outcome.
- Common Signs of Fifth Wave Coffee: small boutique stores, big investments in coffee shop design with distinct concepts, diverse products, and eye-catching displays, strong focus on continuous improvement toward excellence, commercializing products with increasing value, prioritizing overall customer experience, constant investment in new technology and team development to achieve the things listed above
- Initiatives: the coffee giant Starbucks, with its proposal Starbucks Reserve. than traditional Starbucks coffee aims to create a new dimension of the customer experience within the largest coffee operator in the world.
- Interesting figures/companies: Allegra World Coffee Portal
IS THERE SUCH A THING AS A 4TH & 5TH WAVE ?
*WAVE OR NO WAVE
There is some reservation and disagreement among coffee connoisseurs about the (so-called) fourth and fifth coffee waves. According to us, ‘The Waves in the Coffee Industry Trends‘ from Progreso, outlines it clearly:
‘Analysing trends in the coffee industry using wave metaphors has its merits, but also its limitations. First of all, it applies to the western world and the United States in particular – and is not necessarily representative of the rest of the world. Subsequently, since the second wave, the analysis favours coffee shops, while most coffee is consumed at home.
There is no hierarchy between the waves, they kind of roll side by side and none is ended, but flaws in a trend lead to changes that may eventually generate a new trend or wave. On the first three waves there is more or less consensus, but on the fourth and fifth there is not even unanimity that they exist, let alone what they consist of – this largely because we are in the middle of a process that has not yet been properly crystallised.
The most interesting about the analysis is that it shows that the coffee industry is constantly changing and one has to follow the changes to know the best way to participate in the market and get the most out of it.
↦ The second wave has shown that it is possible to get out of the corset of supplying coffee as a commodity and sell a product that stands out for its quality.
↦ The third wave has aroused interest in the entire process, from producer to consumer, in the people behind the coffee and in sustainability, in order to continue to offer a quality product in the future.
With the fourth wave begins the controversy in the analysis of trends in the coffee industry with the focus on waves. Does it exist? And if there is, what is it? The fourth wave, if it exists, is still developing and it is difficult to define the characteristics of a process that has not crystallized well yet. There are different versions of what the fourth wave is, which have in common to overcome the disadvantages of the third wave.
As we delved deeper into these coffee market(ing) trends, a poignant and interesting comment from our in-house Sustainability Expert Katrien Delaet stuck with us:
‘The challenge is to extend these advancements to the general public and generate a response for producers that enables them to live a decent life and provide perspective for the next generation. This requires people to actively participate in shaping the fourth/fifth wave, directly with customers and collectively, advocating for more transparency and sustainability in the purchase process, in exchange for a quality product. The waves are not events that just happen to us, they are movements in which we participate and which we can help shape.’
Some already announce the sixth wave that would have a focus on the connectivity between producer and consumer, an exchange mediated by the roaster. In this way the consumer gains an understanding of how production and the supply chain work, a personalized product can be offered and the basis for true sustainability is created. Sounds good, we’ll see.’
STAYING IN THE WAVE
CATCHING THE RIGHT OR NEXT WAVE
For anyone who has spent any time at the ocean or at a big lake, it’s easy to visualize the rhythm of the waves rolling in. And if you have ever surfed or watched someone surfing or riding the waves, you know the importance of staying in the wave or catching the right next wave at the right time.
Geoffrey Schepens – Green Coffee Trader at EFICO – quickly picks up on this and explains:
‘Timing is everything. With green coffee buying business decisions, as with surfing, choosing the right opportunity at the right time is the key to success. You position yourself in front of a wave and if you get up at the right time, it will carry you forward. At the same time, you can’t survive just chasing trends and you cannot become and run a successful business without good line-up of trusted partners. At EFICO we strive to catch and ride the right waves every time, to be original and timeless every day, so that our partners can surf every right wave with us. Whether you surf the first, second, third, fourth, fifth or none at all, when it comes to the impact of the market on your business and buying options, our EFICO team is always here to answer any questions you may have.’
EFICO’s seasoned coffee veteran and CEO Michel Germanès rounds off this market(ing) exercise nicely:
‘There is a surfing saying that draws a nice parallel with entrepreneurship: “You can’t stop the waves, but you can learn to surf”. As a coffee entrepreneur, roaster, or buyer,… you also encounter many (sometimes unpredictable) waves, where you can see the largest waves as a crisis or recession, for example. Such things are often unstoppable, but luckily you can learn to deal with them. Our EFICO team can help you with that. We can’t teach you how to surf, but we can teach you how to do the best possible coffee business.’
↦ You can schedule face-to-face meetings with our trading team in our offices, conferences or events or book a phone/video call.