How Coffee Is Taking Over Other Drinks?

Coffee

Coffee

The global coffee market is growing at a remarkable rate by producing coffee more or less entirely in emerging countries. According to the research conducted by the (NSA) National Coffee Association, above 70% of people prefer homemade coffee over readymade coffee. There has been a progressive shift witnessed from soft drinks consumers to coffee drinks consumers. The consumers favor Nespresso coffee maker to make coffee at home. South America is considered as a leading manufacturer of Coffee across the globe whereas, Europe is the massive manufacturer of premium-quality coffee.

Multinational Corporations are concentrating on the techniques of negligible waste and economy that works on renewable sources, by introducing natural ground coffee jars in two flavors, popularly known as 100% authentic Arabica Ricco and 100% authentic Arabica Aromatica, certified by the Rainforest Association. These jars can be mixed with food waste and are totally decomposable. Organizations are conducting research and development on products, especially on Arabica coffee, with this the companies prime target is on Italian customers who are seeking natural coffee products. The instant coffee global market is growing at a CAGR of 5.5% during the forecasted period from 2019 to 2025. The mean per household per consumption in the globe stands at 0.9 kg in 2020.

Starbucks is undoubtedly the top player owing to its USD 22.38 billion turnovers which is almost 7.5 times much of the closest competitor. Incepted in Seattle in 1971, Starbucks has over 27,000 outlets worldwide; with one-third of these located in foreign countries. Between 1987 and 2007, the coffee giant commenced an average of two outlets every day.

Market dynamics

Rising factors:

  • Most traded beverage (coffee beans) after oil around the world
  • Popular as an energy drink as it has a high dosage of caffeine which is highly addictive (around 40 – 50 mg)
  • Coffee is popular as a social drink as well

The top reasons people prefer to drink coffee right in the morning as it possesses caffeine which is a highly addictive drug that makes people energized and lively. Caffeine withdrawal can give people agitation and headache due to which people can’t resist it. Local coffee shops/café is where people get together to hang out or discuss business. Coffee has several benefits such as it calms down our nerves and burst stress. Another important consideration of high coffee demand is that it is available in a variety of flavors from dark coffee to chocolate coffee.

Threats:

  • Climate change is the major threat as adversely affects farmers trying to grow the crops across the world

Opportunities:

  • Increase in distribution agreements with hotels, airlines, and office coffee suppliers
  • Imports of coffee are custom duty-free as it is the most traded commodity in the international market

North America has the biggest market share of 29.2% in 2018 due to the high demand for a coffee brew. With the increase in the demand for coffee vending machines at public places and increasing demand from the working, professionals are forecasted to make a significant role in the market revenue. Moreover, the opening of the new coffee shops in Canada and the United States is expected to boost the demand for coffee beans over the forecast period.

Conclusion

Coffee gained recognition as it is the most traded commodity in the world after oil, global coffee industry is worth over 100 billion USD that places it ahead of gold, natural gas, Brent oil and it is the source of livelihood of over 25 million farmers. Coffee shops/café are the fastest growing business in the QSR segment among which Starbucks is the leading franchise. Around 90% of coffee output is produced in emerging economies among which major producers are Brazil, Vietnam, Columbia, and Finland is the largest consumer of coffee per capita in the world. Under fair trade rules of coffee, farmers are provided better conditions and higher profit and coffee producer has a direct relationship with the importer.

Coffee was not so famous in the beginning, coffee was held responsible for riots, seditious speech, and Satan worship and was banned in Cairo, Egypt, and Turkey.

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