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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 750 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 imports the second largest quantity of coffee beans and the third largest quantity of tea in the world.

Industry size & Structure

The average coffee or tea manufacturer operates out of a single location, employs about 28 workers, and generates about $15-16 million annually.

    • The coffee and tea manufacturing industry consists of about 750 firms that employ 21,000 workers and generate $11.7 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.
    • Large tea manufacturers include Unilever, R.C. Bigelow, Hain Celestial, and Twinings. Major soft drink manufacturers, such as Coca-Cola and Pepsi, have tea brands in their product portfolios.
                                    Industry Forecast
                                    Coffee and Tea Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Coronavirus Update

                                    May 16, 2022 - Coffee Consumption Remains Strong
                                    • US coffee consumption is at a two-decade high, according to the recent Spring 2022 National Coffee Data Trends report by the National Coffee Association (NCA). Two-thirds of Americans said they had consumed coffee in the last day, up 21% from January 2021, marking the largest year-over-year increase since the NCA has been gathering data. About 27% of consumers say they are venturing out more for coffee, up from 8% in January 2021. However, away-from-home coffee consumption still has not recovered to pre-pandemic levels. At-home consumption is up significantly: 84% of Americans said they’d had coffee at home in the last day compared to 4% who did so in January 2020.
                                    • The coffee supply chain came under additional strain as Russia’s invasion of Ukraine and resulting sanctions by the US and its allies drove oil prices to their highest level since 2013. Higher fuel prices come on top of COVID-19-related disruptions in trade flows, poor weather in major coffee-producing countries, and sky-rocketing commodity prices for coffee beans.
                                    • While away-from-home coffee drinking is improving, inflation may be taking a bite out of consumers’ budgets, and restaurants may be a key area where Americans plan to curb their spending. In a recent CNBC poll conducted by Momentive, 53% of those surveyed said they had cut back on dining out in the last six months due to rising inflation. Nearly one-third of those surveyed said they had switched from a brand-name product to a generic one.
                                    • About 40% of Americans tried new coffees during the pandemic, 33% tried replicating their favorite coffee-based drink at home, and 25% bought a new way to make coffee at home, according to the National Coffee Association.
                                    • Many analysts say that coffee and tea manufacturers should prepare for an upcoming pandemic-related spending shift that some are calling revenge shopping. Shoppers will sweep “through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns.” Businesses with “communal value,” namely eateries and entertainment venues, will benefit the most, the consulting firm says. A significant portion of coffee sales may shift from grocery stores back to coffee shops.
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