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 865 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 fewer than 20 workers, and generates about $14-15 million annually.

    • The coffee and tea manufacturing industry consists of about 865 firms that employ 22,600 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.
    • 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

                                    Recent Developments

                                    May 23, 2023 - Tea Companies Linked to Human Rights Abuses
                                    • Large tea companies — including Unilever and Starbucks — have been linked to plantations at which 70 reports of human rights abuses were made in 2022, Food Dive reported in May citing a report published by the nonprofit Business & Human Rights Resource Centre. The reports of abuse – including dangerous plucking quotas in exchange for poverty wages – occurred on farms in India, Sri Lanka, Bangladesh, Kenya and Uganda and fell into three key categories: the right to freedom of association, health and safety infringements, and abuses related to wages, benefits and living standards. The report – titled Boiling point: Strengthening corporate accountability in the tea industry – called for increased transparency from producers and less reliance on third-party certification groups by the multinational companies selling tea to consumers. About 1.5 million workers are employed in the tea sector, according to the International Labour Organization.
                                    • Fairtrade International will raise its minimum price for coffee to provide a ‘safety net’ for coffee farmers grappling with high inflation, rising production costs and erratic market prices, Weekly Coffee Dose reports. As of August 2023, the new Fairtrade baseline price for arabica coffee, which represents more than 80% of all Fairtrade coffee sold, will increase 29% to $1.80 per pound. The price of robusta coffee will rise 19% to $1.20 per pound. The price of organic Fairtrade coffee will jump 33% to $0.40 per pound. “Despite the recent spikes in global coffee prices, coffee farmers are struggling with inflation, skyrocketing production costs, and crop loss due to the effects of climate change,” said Monika Firl, Senior Manager for Coffee at Fairtrade International, a global coffee network comprising nearly 900,000 certified coffee farmers across 31 countries.
                                    • More Americans drank coffee in the past day (65%) than any other beverage, according to the Spring 2023 National Coffee Data Trends (NCDT) report commissioned by the National Coffee Association. The number of past-day coffee drinkers who consume specialty coffee increased to 43% in 2022 from 36% in 2021, according to the NCDT report. Specialty coffee includes flavored coffee, as well as lattes, espresso and cappuccino as opposed to traditional coffee (defined as not brewed from premium whole beans or ground varieties). Vanilla is the most popular flavored coffee, followed by mocha, hazelnut, and caramel. The most popular serving size is 12-16 ounces (52% of past-day coffee drinkers), followed by 5-8 ounces (44%), and 20+ ounces (12%). While the pandemic hasn’t changed how much coffee Americans drink, it’s had lingering effects where they consume it: 35% of past-day coffee drinkers had coffee away from home vs. 41% in January 2020.
                                    • Research suggests drinking tea can protect your heart, reduce your risk of cancer and may even help you lose weight, according to health care provider Henry Ford Health (HFH). Green tea is especially rich in disease-fighting polyphenols, the chemicals in the tea plant that protect it from disease and bacterial invasion. “When we drink tea, those chemicals work the same way in us, feeding the healthy bacteria in our gut and starving the unhealthy bacteria that’s associated with chronic diseases,” explains HFH’s Dr. M. Elizabeth Swenor. Green tea is processed in a way that preserves polyphenols. The result is a tea containing 30% to 40% polyphenols compared to black tea’s 3% to 10%. Moreover, the polyphenols in green tea join other disease-fighting chemicals, including compounds called catechins that help protect against cancer, heart disease and autoimmune diseases by combating inflammation.
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