The period from 1450 to 1750 saw coffee evolve from a localized stimulant to a major international commodity. Its introduction to new markets created a sustained period of high profitability, initially driven by scarcity and later by burgeoning consumer demand. This three-century span saw the trade transition from a tightly controlled regional monopoly to a global enterprise, generating immense wealth for those who controlled its production and distribution. Profitability shifted dramatically based on geographic control, trade route dominance, and the scale of production. The trade offered exceptionally high returns, making it one of the most lucrative agricultural products of the time.
The Original Monopoly and Early Revenue
The initial phase of coffee’s profitability was defined by a scarcity model centered on the Arabian Peninsula. Cultivation was concentrated in the highlands of Yemen, with the port of Moka serving as the single, heavily regulated point of export. This geographic concentration allowed local merchants and state powers to dictate prices and maintain high margins. The trade contributed significantly to the economic growth of the Ottoman Empire, which controlled the region starting in the mid-16th century.
Ottoman authorities strictly enforced a monopoly on cultivation and trade. To prevent the plant from being grown elsewhere, they prohibited the export of viable seeds or seedlings, often boiling or roasting the beans before shipment. This tight control over the supply chain lasted for over two centuries, guaranteeing a sustained, high-value trade route across the Middle East. Goods traveled by ship from Moka to Jeddah, serving as a gateway for distribution to major cities like Cairo, Damascus, and Constantinople. The state collected revenue at every stage of transit.
Profit margins for this early trade were immense due to the high cost and risk of long-distance transport. European merchants permitted to trade at Moka in the 17th century paid substantial prices for the rare commodity. For example, an account from the early 18th century recorded a price of approximately $15.00 per pound for green coffee in Yemen, reflecting its high valuation. Merchants who brought the product to new markets enjoyed significant financial control, as consumers were unaware of the original acquisition price.
Driving European Demand and Price Premiums
Coffee’s arrival in Europe in the early 17th century initiated a highly profitable consumer market for importers and retailers. The beverage was introduced as an exotic luxury item, often transported by Venetian merchants from Ottoman trade routes. Initially, only the wealthiest could afford the beverage, viewing it as a sign of sophistication. This association with rarity allowed importers and wholesalers to charge substantial premiums upon its entry into European ports.
The rapid proliferation of coffee houses across major European cities in the mid-17th century accelerated demand and profitability. The first British coffee house opened in Oxford around 1650, followed by hundreds more; London hosted over 2,000 establishments by 1700. These social venues transformed coffee into a staple commodity. Proprietors benefited from high markups on the prepared drink, capturing a significant portion of the consumer’s spending.
The price of imported coffee relative to average income highlights the high profit margins captured by the European distribution network. In the early 18th century, a kilogram of coffee sold in Amsterdam approximated one percent of the average annual income in Holland, demonstrating its status as a high-cost indulgence. This price premium included the cost paid to monopoly holders, long-distance shipping expense, and substantial duties and markups applied by European trading companies and local retailers. These financial returns attracted major commercial entities, such as the British and Dutch East India Companies, which sought to break the existing monopoly.
The Colonial Production Shift and Wealth Creation
The greatest surge in wealth generated by the coffee trade occurred in the early 18th century, when European powers broke the Arabian monopoly and established colonial mass production. The Dutch initiated this shift by obtaining seedlings and establishing massive coffee plantations in Java, beginning in 1699. The transition was swift: in 1721, nearly all coffee in Amsterdam originated in Yemen, but within five years, Java supplied 90% of the Dutch market.
The Dutch East India Company and the French established vast plantations in their colonies, including Caribbean islands like Martinique and Saint-Domingue. This lowered the cost of the raw product by eliminating Yemeni middlemen and drastically increasing supply volume. By 1750, coffee trees were growing across five continents. Saint-Domingue alone supplied half of the world’s coffee by 1788, generating immense wealth for merchant companies and colonial governments through sheer volume.
This systematic wealth generation relied on a highly efficient, high-volume trade system feeding the European consumer base. Profitability was no longer dependent on scarcity, but on the ability to produce and transport massive quantities with minimal production costs. Colonial powers controlled the entire chain, from cultivation to European sale, maximizing revenue capture for the state and their chartered companies. This new economic engine solidified coffee’s status as a global powerhouse, creating multi-million guilder revenues for the colonial entities that controlled its supply.