The fourth wave of coffee remains an elusive concept in the industry. There are a number of definitions, all of which show change and evolution from the third wave.
The emerging fourth wave isn't about taking coffee science to the next level, but rather about scalability.
The fourth wave is about bringing better quality coffee to the masses; focuses on expanding from a small corner of the market and bringing it to more and more people. It is characterized by the commercialization of quality coffee, which in the process has become more accessible and widespread.
What are the limitations of third wave coffee?
Trish Rothgeb, Director of Q and Education Programs at the Coffee Quality Institute, has classically described the third wave as a reaction in many ways.
“This is as much a response to bad coffee as it is a move towards good coffee,” he said in a 2002 publication by the Roasters Guild.
Since then, the third wave has offered craftsmanship, expertise, and individuality to a coffee industry that was by then largely mainstream. This was a direct response to a new generation of consumers concerned with their desire for greater transparency, better quality, and a product that appeals to the individual rather than the masses.
Scalability limitations
Hernan Manson is Head of Inclusive Agribusiness Systems at the International Trade Center (ITC). He says specialty coffee still represents a small percentage of overall consumption and targets small consumer segments.
This means that no matter how well-intentioned third wave coffee players are and how sustainable their practices are, the volumes traded in them are still not enough to drive real systemic change and turn coffee producers' livelihoods upside down.
"Many third wave actors are starting to recognize that a certain economy of scale is needed to be successful," says Hernan.
“For them, this means moving away from the characteristic 'project of passion' of the third wave and moving to a more commercial focus that can generate long-term profits.”
Too much sophistication can be daunting
Vanusia Nogueira is the Director of the Brazilian Specialty Coffee Association (BSCA). He draws an interesting parallel between the wine and coffee industries to show what happened with third wave and specialty coffee.
“In the past, Argentina had the highest per capita consumption of wine in the world,” he says. "When Argentina decided to add value to its Malbecs and other wines, it distanced itself from national consumers and made it less accessible."
“While it has gained a reputation for its fine wines and increased exports, national wine consumption has fallen. Now I see a similar pattern in Brazil's coffee industry.”
He explains that the niche specialty coffee market is far from the average coffee drinker.
“For me, this is the limitation of the third wave,” he says. "Too much complexity can be daunting for the average consumer group."
The average coffee drinker – understandably representing a large portion of coffee consumption – lacks the knowledge or tools to understand the nuances between different brewing methods, tools and varieties.
Is there a fourth wave? How?
While there is broad consensus on the definitions of the first three waves of coffee, fourth wave coffee remains a fuzzy and controversial concept.
"I don't think anyone really knows what it is," says Vanusia. “People are trying to be more scientific and sophisticated, but also more inclusive. These are actually two concepts that work against each other and create confusion.”
Democratization and commercialization of high-quality coffee
Hernan is the co-author of the International Trade Center's popular publication, the ITC-Alliances for Action Coffee Guide. This document recognizes the fourth wave of coffee and enlarges the purposes and characteristics of the fourth wave, describing it as "private commercialization."
“One aspect of the fourth wave has to do with democratizing specialty coffee consumption,” he says. "It's not just about South-to-North specialty coffee, it's also about South-South trade and the creation of consumer markets in producing countries."
"Specialty coffee is also slowly becoming more accessible to the average consumer - we're breaking down barriers."
The cold coffee revolution
We could say that “coffee science” is not actually part of the fourth wave, but rather a deeper extension of the third wave.
If there is a fourth wave, an important part of it is the "cold coffee revolution".
When we look at the disruptive movements in coffee, the biggest deterioration in the last decade has been cold coffee or RTD coffee.
“Today, 50% of Starbucks drinks are now sold cold in retail stores. A billion-dollar category of cold coffee has evolved, mostly in the last 10 years. These are the types of consumption disruptors that I think are the basis of the “future wave” of the coffee industry.”
This “revolution” is transforming the beverage consumer into coffee drinkers as it becomes a viable cold option and thus greatly affects the consumption of coffee quality. It's also worth considering that many of these RTD and cold coffee drinks are a healthier and naturally delicious alternative to sugary soft drinks.
As a result, a cold coffee revolution opens up new consumer groups and creates new ways of drinking coffee as it becomes available all year round.
Raising quality: Can it be done?
So the fourth wave means that high-quality coffee is becoming more accessible, more accessible to the general public, and less focused on building an elite circle of coffee enthusiasts.
As a result, more and more consumers are beginning to agree that automation does not necessarily detract from the quality of the resulting product.
Bulk premium moving forward
It is natural for the coffee industry to innovate and expand to cater to more new users. As part of this, we've seen more commercial second wave or "mass premium" brands that scale quality and offer better products at more accessible prices.
At the same time, many third-wave coffee brands are taking a more commercial approach and offering products such as capsules, instant coffee, and ready-to-drink options.
Hernan explains that Coffee Guide describes the high-end audience segment as a powerful tool for democratizing quality coffee and growing its third-wave business model.
“Applying a second-wave commercial approach to the third wave greatly increases its socioeconomic impact,” he says.
“Developing the mass premium coffee market segment means reaching a much larger consumer group while maintaining quality and sustainability parameters.”
Cooperative model can "change volumes"
However, while the special prices are great, manufacturers need to change their volumes. In other words: selling small quantities of high-quality coffee will not affect producers at scale.
Coffee farmers need to gather in cooperatives to take advantage of market power, and the market needs to value and evaluate accordingly.
As a result, selling more coffee at a fair price seems to benefit the coffee supply chain, and especially producers, far more than selling small quantities at a higher price.
As a result, the fourth wave's focus on the wider commercialization of quality coffee could help inject more value into the supply chain at scale.
The fourth wave of coffee, like the three before it, is about a transformation. Its focus on commercializing and democratizing high-quality coffee is already shaping the industry in a number of important ways. As Matthew Swenson said, the "cold coffee revolution" is already upon us.
Ultimately, moving away from the exclusivity and elitism that defines the wave would be a good thing for everyone in the supply chain. Producers, roasters, traders, baristas and even coffee consumers - all will benefit from more people drinking better coffee.
