Coffee: More than a Jolt of Caffeine
With Starbucks' giving out free samples of their new Pike Place Roast coffee today, the battle for share of your daily caffeine fix wages on. Growing competition and a weakening economy has put a lot of pressure on Starbucks. Increased marketing and lower priced options from companies like McDonalds and Dunkin Donuts have consumers seeking alternatives. Here are some stats on what's at stake:
In the past year, 12.5 billion pounds of coffee or ~80% of total coffee produced has been exported from coffee producing countries (International Coffee Organization). At today's futures prices of $1.33 / pound for coffee, that translates into ~$16.6 billion in exports.
Biggest Exporters (by share of exports):
- Brazil - 29%
- Vietnam - 17%
- Colombia - 12%
- Indonesia - 5%
With the high margins retailers collect for a single cup of coffee, there is a huge opportunity in gaining "share of stomach." According to the National Coffee Association, more Americans drink coffee than they do soft drinks. That number grows with age.
Daily coffee consumption by age:
- 26% of Americans ages 18-24
- 47% of Americans ages 25-39
- 61% of Americans ages 40-59
- 71% of Americans 60 years and older drink coffee every day.
Additionally, gourmet coffee products has grown to represent ~17% of daily consumption. Starbucks has been a big driver of that trend.
Other players in the coffee battle include Peet's Coffee & Tea , Caribou Coffee , Tim Horton's and Panera Bread