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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Jun 20, 2024 - Flat Prices and Employment
                                    • Employment by coffee, tea, and other food product makers dipped by nearly 1% in April compared to a year ago amid stagnating producer prices. While the Producer Price Index for coffee and tea manufacturers, which measures prices before reaching consumers, rose 4.9% in April year over year, wholesale prices for coffee and tea have plateaued, down about 1% since January, BLS data show.
                                    • 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.
                                    • Global prices for coffee are surging as severe weather hampers production in key growing regions, The Wall Street Journal reported in April. Heat waves, heavy rainfalls, and droughts are increasing in frequency, damaging harvests and crippling supplies amid growing demand from consumers worldwide, according to WSJ. “Adverse weather conditions, mostly in the Southern Hemisphere, have played an important role in sending several food commodities sharply higher,” Ole Hansen, head of commodity strategy at Saxo Bank, told WSJ. The global coffee benchmark prices, London Robusta futures, are up 56% this April compared to a year ago, according to data from FactSet. Soaring coffee bean prices and rising costs for other inputs like labor and transportation are pinching coffee manufacturers' margins. Climate change is central to the rising price of coffee and other commodities and threatens to send them even higher, per WSJ.
                                    • Legislators in Hawaii have introduced a pair of bills that would increase the percentage of Kona coffee required for a product to be labeled as such and would expand legal penalties for mislabeling, Spectrum News reports. Currently, products labeled Kona coffee must contain at least 10% Kona coffee beans. The bills, which followed the January release of a study by the Hawaii Department of Agriculture (HDOA), are intended to support Hawaiian farmers and preserve the integrity of the Kona brand. “Requiring coffee labeled as “Kona” to actually be 100% Kona beans will protect the value of the Kona name and support farmers’ ability to get the best prices for their products,” said state Rep. Nicole Lowen. The HDOA reports that increasing the minimum amount of Kona coffee content from 10% to 51% or 100% would increase the price of Kona coffee without significantly impacting quantities grown and sold.
                                    Get A Demo

                                    Vertical IQ’s Industry Intelligence Platform

                                    See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                    Build valuable, lasting relationships by having smarter conversations -
                                    check out Vertical IQ today.

                                    Request A Demo