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The Coffee Industry – Producers & Consumers

The coffee industry has evolved significantly over recent years, with a shift in focus towards sustainability, single-origin beans, and innovative brewing methods. In this comprehensive guide, we will explore the state of the current coffee industry, from the global market size to the major players and trends that are shaping its future. We will also delve into the coffee consumption habits of Americans and people around the world, as well as the production, distribution, and pricing of this beloved beverage.

Global Coffee Market Overview

The global coffee market has experienced steady growth over the past decade and is expected to continue this upward trajectory in the coming years. According to Mordor Intelligence, the coffee market size is estimated at USD 126.17 billion in 2023 and is projected to reach USD 158.89 billion by 2028, growing at a CAGR of 4.72% during this period. The major factors driving the growth of the coffee market include the increasing demand for certified coffee products, the acceptance of single-serve coffee brew systems by consumers, and the constant innovation led by top players in the industry.

Coffee Market Segmentation

The global coffee market can be segmented by product type, distribution channel, and geography. By product type, the market is divided into whole-bean, ground coffee, instant coffee, and coffee pods and capsules. Based on the distribution channel, the market is categorized into on-trade and off-trade channels, with the latter including supermarkets/hypermarkets, convenience stores, specialist retailers, and other channels. Geographically, the market covers major regions such as North America, Europe, Asia-Pacific, South America, and the Middle East & Africa.

Coffee Industry: Major Players and Market Concentration

The coffee industry is highly competitive, with significant players such as Nestle, JM Smucker Company, Kraft Heinz Company, and Starbucks Coffee Company dominating the market. However, private-label brands like Massimo Zanetti Beverage Group and Tchibo GmbH are also focused on increasing their market shares and global and domestic sales.

Market leaders in the coffee industry have recorded substantial scope for growth in their market shares through product innovations and regional expansions via joint ventures. For example, in September 2021, Louis Dreyfus Company Asia Pte. Ltd signed a joint venture agreement with Zephyr Japan, a Japanese specialty coffee retailer, aiming to expand its specialty business and increase premium coffee flows into Japan and other East Asian markets.

Coffee Industry Consumption: A Global Perspective

Coffee is the second most-consumed beverage in the world, with approximately 2 billion cups of coffee consumed daily. In the United States, 62% of Americans drink coffee daily, averaging 3 cups per day. This equates to over 400 million cups of coffee consumed in the United States every day.

In terms of coffee consumption per capita, Finland leads the world, with 26.5 pounds consumed per person per year. The top five countries for coffee consumption include Finland, Norway, Iceland, Denmark, and the Netherlands.

Coffee Production: Global Landscape

Brazil is the world’s largest coffee producer, responsible for 62.6 million 60 kg bags of coffee in 2022. The top five coffee-producing countries are Brazil, Vietnam, Colombia, Indonesia, and Ethiopia. Other major coffee producers include Uganda, India, Honduras, Peru, and Mexico.

The United States, as the largest coffee importer worldwide, imported $5.68 billion worth of coffee in 2020. Other major coffee importers include Germany, France, Italy, and Canada.

Coffee Industry: U.S. Consumption and Spending

According to a study by Zippia, 150 million Americans drink coffee regularly, with the average American coffee drinker consuming 2.7 to 3 cups per day. This leads to an estimated 400 million cups of coffee consumed in the United States daily. When it comes to spending, the average American spends $1,097 on coffee per year, with American women spending an average of $2,327 per year on coffee and American men spending around $1,934.

Types of Coffee and Market Share

Ground coffee accounts for 45.8% of the retail sales of coffee in the United States as of 2022, followed by single-cup coffee, which represents 36.5% of the market share. Instant coffee, on the other hand, accounts for 25% of all retail brewed coffee consumed globally, with Europe being the most significant consumer of instant coffee.

In recent years, the popularity of cold brew coffee has surged, with one out of every five Americans under age 40 consuming cold brew at least once per week.

Independent Coffee Shops and Their Market Presence

As of 2020, there are 37,189 independent coffee shops in the United States. However, the competition is fierce, with a 2019 survey indicating that 50% to 74% of independent coffee shops fail within their first five years. This is often attributed to the overwhelming presence of corporate coffee shops in the market.

Coffee Industry Trends and Future Outlook

Over the last few years, there has been a surge in demand for certified coffee products, driven by consumers’ concerns about poverty, social injustice, and environmental destruction. Sustainable coffee types that adhere to various combinations of social, environmental, and economic standards, independently certified by an accredited third party, are expected to grow in popularity.

European countries, particularly Germany, Italy, Spain, and the United Kingdom, are increasingly consuming coffee while working, leading to a significant demand for coffee in these regions.

Lastly, the specialty coffee market is expected to grow at a CAGR of 13.62% from 2020 to 2025, with North America, particularly the United States and Canada, driving the accelerated growth of this market segment.

Conclusion

The coffee industry continues to evolve and grow, with a focus on sustainability, premium coffee products, and innovative brewing methods. As the global market size and consumption habits of coffee drinkers worldwide continue to expand, the coffee industry remains a dynamic and essential part of the global economy. With major players such as Nestle, Starbucks, and Kraft Heinz Company leading the way, the future of the coffee industry looks promising, offering new opportunities and challenges for producers, consumers, and everyone in between.

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