The coffee business



After water, coffee is the most consumed drink in the world. From your humble cup of nescafe gold instant all the way to a single origin dark roast barista crafted flat white in a modern independent cafe, with so many formats enjoyed by a bullion people worldwide there is something to satisfy every palette and it is easy to see how it has become such a big and important business in todays society.

On average, an American spends $14.40 a week on coffee from cafes. On average, Americans drink 3 cups each every day. The average net profit on a cup of coffee is between 400% and 500%, with roughly 80c spent on labour and materials and the average cup costing $3.50. There are 25 billion small producers relying on coffee for a living. Around 30 million coffee brewing machines have been sold in the US every year since 2010. 45 hours are spent every year on Americans waiting for coffee, compared to the 48 hours they spend in the shower. 46% of coffee drinkers visit a cafe more than three times a week, and 56% percent of these people will buy a pastry with their drink. Needless to say, the market is massive.
The majority of coffee is consumed at home, however the three companies boasting the largest sales in coffee are McDonalds, Starbucks and Dunkin' Donuts. There is however a trend developing which is complicating the art of coffee. The daily consumption of espresso based beverages in the US has tripled since 2008, and a lot of this growth has been seen in the younger generations. The coffee industry remained largely unaffected by the 2008 recession as millennials proved that it had become a staple that they were willing to pay for, even in trying times, who also tend to spend money on products from companies that reflect their personal values more than previous generations. This is seeing an increase in fair-trade and organic products.
There is a rise in consumption out of home and in a social environment, with consumers expecting to have their coffee served precisely as they wish. This is boosting business in smaller, independent cafes and also creating more competition amongst these companies as they all try to bend and adapt to an ever changing market as well as provide something unique.
Apps are changing the way that people buy coffee. These days, you can order your coffee from your phone and so you don't have to wait in line to acquire it. This also opens a potential stream of information which, whilst before was largely unappreciated, today is expected, so that consumers can find out where their coffee beans are sourced, how they are roasted, and the best ways to have it prepared for their particular taste.
The rise in app usage comes alongside a rise in interest in technology. More consumers are looking to buy coffee related gadgets so that they are able to produce high quality beverages in their own home, and the market for this is sharply inclining.


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