Coffee and Tea Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 910 coffee or tea manufacturers in the US produce roasted coffee, packaged tea, and related products. Coffee manufacturers roast coffee beans and produce coffee-based products, such as concentrates, extracts, flavorings, and syrups. Tea manufacturers produce tea concentrates or herbal teas or blend tea. Firms may offer related products, such as green coffee, other types of beverages, coffee filters, sugar, and creamers.
Variable Ingredient Costs
The cost of green coffee, the primary input to roasted coffee, is volatile and affects margins and profitability.
Dependence on Imports
The US is the world’s largest importer of coffee beans and the third-largest importer of tea.
Industry size & Structure
The average coffee or tea manufacturer operates out of a single location, employs fewer than 22 workers, and generates about $13-14 million annually.
- The coffee and tea manufacturing industry comprises about 910 firms that employ 20,000 workers and generate $12.5 billion annually.
- The industry is highly concentrated; the top 50 companies account for about 91% of industry revenue.
- Multi-national food conglomerates, including J.M. Smuckers (Folgers) and Kraft Heinz Group (Maxwell House), roast and sell coffee beans, as do large coffee chains, such as Starbucks and Dunkin’ Donuts.
- Large coffee manufacturers include Farmer Brothers and Coffee Holding Co.
- Large tea manufacturers include Unilever, R.C. Bigelow, Hain Celestial, and Twinings. Major soft drink manufacturers like Coca-Cola and Pepsi have tea brands in their product portfolios.
- Domestic production comes from Kona coffee grown in Hawaii, which represents less than 1% of US consumption. The rest is imported primarily from Colombia and Brazil.
Industry Forecast
Coffee and Tea Manufacturers Industry Growth
Recent Developments
Oct 20, 2024 - Temperatures and Prices Rising
- Coffee and tea prices are rising along with global temperatures. Futures prices for coffee and tea are up more than 50% since the start of the year, according to data from Trading Economics. A major factor in the price rise of these two commodities is the changing climate, marked by longer summers and prolonged droughts. In an interview with The Wall Street Journal Italy’s Illy Coffee Chairman Andrea Illy, said “Coffee producers have to adapt to climate change in order for global prices to stabilize.” With daily coffee consumption at a 20-year high according to the National Coffee Association, robust demand amid a shrinking supply is driving up coffee prices. In addition to climate change, geopolitical pressures – including tensions in the Red Sea and the war in Ukraine driving up fertilizer prices – are disrupting the traditional tea supply chain, causing tea prices to boil.
- The Producer Price Index (PPI) for coffee and tea manufacturers, which measures prices before reaching consumers, climbed to a new high in July, driven by poor harvests that crimped supplies. Producer prices for coffee and tea manufacturers rose 8.2% in July compared to a year ago after climbing 8.2% in the previous July-versus-July annual comparison, according to the latest US Bureau of Labor Statistics data. Employment by makers of coffee, tea, and other food products shrank 2.4% year over year in July following a recent dip in shipments, according to BLS data.
- According to a new report from analytics firm Placer.ai, which tracks shopping and dining trends, coffee bars across the US are enjoying an increase in visits. Overall, the visits to three major coffee chains, including Dutch Bros., Dunkin’, and Biggby Coffee, increased 5.1% during the first five months of 2024. Sales for the US coffee shops and snack bars industry are forecast to grow at a 5.22% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to the Interindustry Economic Research Fund. The rise in sales by coffee shops is a positive sign for coffee and tea manufacturers.
- The biggest at-home manufacturer in the US retail coffee market, JM Smucker Co., is hiking prices across its portfolio of coffee brands beginning in June, Bloomberg reports. The maker of Folgers, Café Bustelo, and Dunkin' brand coffees cited higher green coffee costs as the reason for the price increases. “The coffee category continues to experience commodity volatility and overall meaningful inflation,” CEO Mark Smucker said in a recent earnings call. According to Bloomberg, futures prices for Robusta beans used in instant coffee have soared more than 50% this year to new highs as production in key grower Vietnam dwindles under drought, and prices for arabica coffee beans are also climbing. As a result, consumers are paying 20% more for their ground coffee than they did in April 2023, an upward price trend that’s expected to continue as climate change and extreme weather batter coffee-growing regions.
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