Roasted coffee beans played a central role in the range of products offered by Heinrich Schwarzenbach’s delicatessen in Zurich. The photograph dates from around 1920.
schwarzenbach.ch
Only Brazil exports more coffee than Switzerland. How did a small country, where the climate makes it impossible to grow coffee, become the world’s second-largest coffee exporter? It is a story that also has its dark chapters.
Switzerland has achieved something economically that defies all logic. With an export value of around CHF3.3 billion ($4.2 billion) in recent years, the small country is only just behind Brazil in terms of coffee exports, but ahead of giants such as Colombia, Ethiopia and Vietnam – all countries that grow coffee and supply the beans that are roasted in Switzerland.
The local industry generates good margins with this processing. According to the Swiss Trade Monitor of the University of St Gallen, coffee beans (known as green coffee) are imported into Switzerland for around $5 per kilogramme. When they leave the Swiss roasting plants, they are worth $26.80 per kilo.
This enormous increase in value makes coffee Switzerland’s most important agricultural export today. With a share of around 33%, it is even more important than traditional exports such as cheese or chocolate.
Switzerland is slightly behind Italy and Germany in terms of pure export volumes, as the Dutch government writes in an analysis of Switzerland’s market potential in the coffee sector.
However, Switzerland’s specialisation in high-priced, portioned products explains why it is ahead of these two countries in terms of export value.
According to the same source, green coffee is almost always delivered via the River Rhine. The beans first reach seaports such as Antwerp, Rotterdam or Hamburg, where they are transported up the Rhine by barge to Basel, where many of the large green coffee trading companies have set up shop.
The miracle of ‘substantial transformation’
But why is coffee that is only roasted in Switzerland allowed to carry a Swiss cross on its packaging? The secret behind the country’s success is a legal finesse called “substantial transformation”.
Under international trade law, a product is labelled with the origin of the country in which it was substantially transformed.
The degree to which fresh coffee beans are roasted determines whether a coffee tastes good or not.
Keystone / Gaetan Bally
In the case of coffee, customs authorities worldwide have decided that the roasting of green beans constitutes such a transformation. This subtlety has made Switzerland one of the world’s largest coffee-producing countries.
‘Coffee Valley’ and Swiss precision
But it’s not just the beans. Around Lake Geneva and in eastern Switzerland, ecosystems have developed that are often referred to as “Coffee Valley”. Not only are the giants such as Nestlé (with Nescafé and Nespresso) based here, but also the industry’s technology leaders.
While Switzerland is in second place for coffee, it is the undisputed leader in the market for fully automatic coffee machines: Around 70% of all machines sold worldwide come from Switzerland.
The logo of the coffee machine manufacturer Thermoplan at its headquarters and production site in Weggis, canton Lucerne.
Urs Flüeler / Keystone
They are produced by the industry leaders Jura, Schaerer and Thermoplan. The latter, for example, supplies all the coffee machines for the branches of the Starbucks coffee chain.
Swiss suppliers, who produce highly specialised components, are also behind the success of the machine manufacturers. These precision plastic components have to withstand extreme pressures of up to 20 bar and temperatures of 100°C, which is necessary for a fine coffee.
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Commodity trading centre Switzerland
The fact that Switzerland has become a global hub for coffee is also due to its role as a commodity trading centre. According to the Swiss Trade Monitor, it is estimated that 60% to 70% of the global green coffee trade passes through Swiss desks.
The more than 40 members of the Swiss Coffee Trade Association control more than half of the green coffee traded worldwide.
Coffee in all its many varieties: a shelf in a Nespresso shop in Winterthur, canton Zurich.
Gaetan Bally / Keystone
Capsule coffee as a booster
The sharp increase in export figures from the early 2000s is primarily due to the success of the capsule system. Market leader Nespresso produces its capsules for the global market exclusively in three factories in Switzerland.
Switzerland is also a major exporter of instant coffee and other highly processed specialities that are positioned in premium segments worldwide.
The dark side of the coffee business
When Switzerland’s success as a coffee country is emphasised, it should not be forgotten that this business has its origins in colonialism. Although Switzerland never had its own colonies, well-known Swiss people owned plantations.
The Escher family, for example, owned a coffee plantation in Cuba, “where slaves guarded by dogs had to work 14 hours a day”, as Swiss Review writes. Alfred Escher is regarded as one of the architects of modern Switzerland.
However, Swiss families not only owned plantations, but were also heavily involved in the logistics of transporting slaves and coffee.
In a podcast on the subject, Dominik Flammer, food researcher, author and curator of the Culinarium Alpinum in Stans, called it a “triangular business”.
A supervisor watches workers as they plant out coffee seedlings on the Indonesian island of Sumatra, photographed between 1926 and 1932.
ETH-Bibliothek Zürich, Bildarchiv
Today, the industry continues to struggle with its image. Ecological and social grievances still prevail in the countries where coffee is grown. After the European Union enacted a regulation on deforestation-free products, the Swiss Platform for Sustainable Coffee was launched.
Targeted projects aim to improve the living conditions of small farmers and make supply chains more transparent. The sector is modelling itself on existing models from the cocoa sector.
Despite government start-up funding for the programme, critics doubt its success as the model is based on voluntary action rather than binding legal obligations.
A look at the Swiss coffee industry and the history of coffee in Switzerland also reveals the global interdependencies of this business, which continue to have an impact to this day and continue to give rise to criticism. The final chapter of the Swiss coffee saga is therefore far from being written.
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Edited by Balz Rigendinger. Translated from German by AI/ts
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