Coffee is one of the most consumed beverages in the United States. About half of the adults in this country drink a coffee based product a day. Dunkin Donuts (DNKN) claims they sell nearly 1 billion cups of coffee a year.
Coffee production and consumption is a worldwide pastime. The process of making coffee began in Ethiopia over 1000 years ago and quickly spread to Arabic nations and Europe. Coffee has come a long way since then, becoming one of the world’s most popular beverages.
How the Coffee Market Could Change
The world gets its beans from all over. Since it’s such a cash crop, many developing nations grow the beans. Areas like Latin America, Africa, and Southeast Asia are popular for growing the beans (Hawaii is the only US state to grow coffee beans). It should be noted that a change in political regime in any of these areas could affect the price of coffee beans.
Another aspect of the coffee market comes in the technological developments in brewing the beverage, made by Green Mountain Coffee Roasters (GMCR). They developed the popular Keurig brewing system, which uses the individual K-cups. Many people have switched to this simple coffee maker as opposed to traditional coffee machines. The patents that GMCR holds concerning K-cups will run out this fall.
Business Section: Investment Ideas
When investigating coffee stocks, do not forget that the company is importing all of their beans from around the world. Depending on the company, a war or national disaster in a third-world country could affect the price of the cup you drink every morning. So it's a good idea to look into their key production sources.
Here are a list of companies heavily involved in the coffee business:
Use the Compar-O-Matic to compare market caps of traded coffee companies:
3. Farmer Brothers Co. (FARM, Earnings, Analysts, Financials): Engages in the manufacture, wholesale, and distribution of coffee, tea, and culinary products in the United States. Market cap at $122.1M, most recent closing price at $7.50.
5. Teavana Holdings, Inc. (TEA, Earnings, Analysts, Financials): Operates as a specialty retailer of loose-leaf teas, teawares, and other tea-related merchandise. Market cap at $512.04M, most recent closing price at $13.31.
6. Peet's Coffee & Tea, Inc. (PEET, Earnings, Analysts, Financials): Operates as a specialty coffee roaster and marketer of fresh roasted whole bean coffee and tea in the United States. Market cap at $799.77M, most recent closing price at $60.36.
7. Starbucks Corporation (SBUX, Earnings, Analysts, Financials): Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. Market cap at $39.69B, most recent closing price at $52.33.
Written by Ryan Horch
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Analyze These Ideas: Getting Started
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Caribou Coffee Company, Inc. (CBOU, Chart, Download SEC Filings)
- Dunkin' Brands Group, Inc. (DNKN, Chart, Download SEC Filings)
- Farmer Brothers Co. (FARM, Chart, Download SEC Filings)
- Green Mountain Coffee Roasters Inc. (GMCR, Chart, Download SEC Filings)
- Teavana Holdings, Inc. (TEA, Chart, Download SEC Filings)
- Peet's Coffee & Tea, Inc. (PEET, Chart, Download SEC Filings)
- Starbucks Corporation (SBUX, Chart, Download SEC Filings)
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