Introduction: to spy out the coffee industry

  By Ying ZHANG

Coffee, as one of the most popular beverages in the world, is the main source of caffeine for people, and it is also an important factor in our social life. Indeed, most people drink coffee every day.

Data shows that each day 1.6 billion cups of coffee are consumed all over the world. If calculated according to 8 billion people, on average, every five days you will drink a cup of coffee, and 65% of those will be consumed at breakfast. This is mainly because coffee has a very good refreshing effect.1

There are about 125 million people work related to the coffee, including coffee planting, processing, coffee roaster, coffee trade, coffee retail and so on.1 Coffee is worth about 100 billion dollars nowadays, which let it became the second biggest commodity of the world, ahead of the oil, gas and so on.On the export side alone, the industry value is $20 billion and also continue to grow.3

The compound annual growth rate of the coffee industry is closed to 5.5%. Coffee is the highest consumption drink in the developed country, such as the United States and European countries. In the U.S., for example, economic coffee activity took 1.6% of the total US GDP. Consumers in the U.S. spent nearly 74.2 billion dollars on the coffee product, and the industry provides more than 1,696,710 jobs.5

Through data collection, we found an interesting phenomenon: the residents of Nordic countries love to drink coffee. In Finland, the national average of coffee is 12kg per capita per year. In Norway, around 10 kg per capita per year and in Iceland is 9 kg per capita per year which means more simply: 5 cups of coffee per day! We could also say that it is related to the local cold weather.7 In order to meet the large demand for coffee, many countries in the world engaged in coffee farming work. Coffee is almost entirely produced in developing countries, including about 17 of the least developed countries. 90% of the world’s coffee production occurred in the developing countries.5

top coffee

(Top annual per capita coffee – drinkers, 2018)8

The main consumer groups of the coffee industry are between the age of 19 to 34, especially the millennials, who led to nearly 10% increasing of the consumption of coffee. It is the main reason for the expansion of the coffee market.China, Panama, Kenya, Senegal, and the United States are considered to be the most potential market in the ensuing few years. The Asia-Pacific region is the fastest growing market which is represented by the high coffee consumption in China and India. In these two countries, coffee culture is becoming fashionable. More and more people are getting interested in coffee culture, especially the middle class and young professionals. European countries occupy the highest share in the global coffee market, followed by North America. These regions are mainly relied on imports to meet their growing demand.4

In addition, other factors also promote the growth of the global coffee market, such as the type of coffee available in a wide range of areas, taste and style, the urbanization and the improvement of residents’ disposable income, more and more retail stores and coffee shops appear. However, the price fluctuation in the coffee beans and climate change led to supply shortages. These factors also make the market unstable.4 The most famous companies of the coffee market, including Starbucks, McCafe, Costa and Nestle S.A.. Some of these companies focus on the coffee shop business. Some of them, at the same time, run two kinds of business — retails and coffee shop. Both of them are trying their best to expand their business. Due to the change in people’s consumption style, these companies start to look for cross-border cooperation with retail O2O – online to offline and so on. For example, New York Uniqlo became the first clothing retailer who introduces Starbucks on the premises. McCafe is selling instant coffee in the supermarkets in the U.S. and Canada.6

In our blog, we are going to introduce you to the  4 famous coffee brand in the world, including their brand strategies, brand perception…and all the things you will get interested in these brands. Let’s look forward to it!

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References:

  1. . (2017.June.16). 数字咖啡 | 全世界每天喝掉16亿杯咖啡,有1.25亿人的工作与咖啡有关. Retrieved from https://zhuanlan.zhihu.com/p/27421154
  2. Global Coffee Industry Facts & Statistics of 2014-2015 | Global Business Development Company & Investment Gateway. (2018, April 16). Retrieved from http://www.wevio.com/wevio-blog/global-coffee-industry-facts-statistics-of-2014-2015/
  3. Feng, J. (2016, February 01). All about the Coffee Industry. Retrieved from https://www.worldatlas.com/articles/all-about-the-coffee-industry.html
  4. Coffee Market – Growth, Trends and Forecasts (2018 – 2023). (2018). Retrieved from https://www.mordorintelligence.com/industry-reports/coffee-market
  5. Menke, A. (2018, April 19). The Global Coffee Industry. Retrieved from https://globaledge.msu.edu/blog/post/55607/the-global-coffee-industry
  6. Hu, K. (2014, April 10). 分析:咖啡店与零售O2O的跨界合作. Retrieved from https://www.iyiou.com/p/3132
  7. Bernard, K. (2015, March 18). Top 10 Coffee Consuming Nations. Retrieved from https://www.worldatlas.com/articles/top-10-coffee-consuming-nations.html
  8. Coffee Trends in Africa – Is Africa an Untapped Market for Coffee Sellers? (2018, April 19). Retrieved from https://pbfy.com/running-your-business/coffee-trends-in-africa-is-africa-an-untapped-market-for-coffee-sellers/

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