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"Specialty coffee" was first used in 1974 by Erna Knutsen in an issue of Tea & Coffee Trade Journal. Knutsen used this term to describe beans of the best flavor which are produced in special microclimates.

Specialty coffee should not be confused with "gourmet" or "premium" coffee. The latter are marketing terms with no defined standards. According to the Specialty Coffee Association of America (SCAA), coffee which scores 80 points or above on a 100-point scale is graded "specialty." Specialty coffees are grown in special and ideal climates, and are distinctive because of their full cup taste and little to no defects. The unique flavors and tastes are a result of the special characteristics and composition of the soils in which they are produced.

The specialty segment is the most rapidly growing portion of the coffee industry. In the U.S., specialty coffee has increased its market share from 1% to 20% in the last 25 years.

To promote and self-regulate the industry, growers, exporters, roasters, retailers and equipment suppliers have established trade associations. These associations exist in both coffee-consuming and producing countries.

Among the countries that are very famous by producing specialty coffee are Colombia, Ethiopia, Kenya, and Panama.

The specialty coffee demand is growing in many countries, with the US being the most developed market, followed by Europe, and then Asia - which is very early in the consumption of this kind of coffee but has steadily grown its overall consumption of specialty coffee as customers in Asia begin to differentiate the quality of the coffee they drink.