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The coffee industry adopted this term from the world of wine-making. It is defined as "Made from or belonging to a single specified variety of grape." Put simply, a varietal is a coffee drink made with beans from only one type(variety) of plant.
Beans in a varietal are siblings, in a sense. They can have more than one species of ancestor plant, but every bean in the varietal has the same ancestry as the other beans. This highlights the characteristics of a single type of bean, whereas a blend combines a number of plant varieties, giving a more subtle experience of each.