The Business of Coffee: 10 Surprising Financial Facts

The global industry of the coffee trade is quite large. Coffee is more popular than ever, no other beverage is more revered or respected than our trusty cup of joe. Coffee is a $60 billion dollar industry, produced by third world nations and consumed by industrialized nations the world round. After crude oil, coffee is the most sought after commodity in the world. Amazing right?

The spread of coffee began in the Horn of Africa, where coffee trees originated as early as the 15th century. Cultivation began and word spread of this delightful plant, making its way to the Dutch where it was grown in greenhouses. Coffee drinking was encouraged and by the late 1600’s the Dutch were growing coffee and taking the plants to be grown in other climates as well – thus the spread of coffee we see today.

Large brands like Starbucks have grown their entire businesses off coffee, while others like McDonald’s are expanding offerings to increase their bottomlines as well. Self-serve coffee machines and today’s pod coffee makers are an additional way companies have been able to offer people who love coffee more options, while starting and growing amazing businesses. The business of coffee is quite extraordinary!

There are many surprising facts about the coffee industry that those with savvy financial minds may find interesting. Did you know that:

#1 Less than 10% of the $60 billion a year industry ends up in the hands of coffee farmers.

Few dollars make it back to the end farmer who actually harvested the crop, and this is very evident in the coffee industry. Several countries today produce the majority of the world’s coffee including Brazil, Vietnam, Peru, Indonesia, Ethopia, Columbia and many others. In third world countries where most coffee is grown individual production is paramount to the local economy.

#2 By January 2003, commodity pricing for coffee dropped to its lowest rate at .54 historically, and has since rebounded.

Historically we entered a coffee crisis with prices dipping far below industry standards. Just six years prior the price of coffee was over $3, marking a severe drop in prices at the time. Understanding the market including ups and downs with this cash crop is important for investors.

#3 The International Coffee Organization (ICO) reports that in September 2014 8.15 million bags of coffee were exported, compared to 8.55 million the prior year showing a decline in production.

While growth of coffee production seems plateaued, the industry is still consuming an exorbitant amount of coffee on a monthly basis. The trends seem to indicate that demand continues, with slight production variances month over month and year over year.

#4 The best resources for coffee industry facts can be found on the ICO.org website.

If you’re looking to dive deeper into statistics, information and market data the International Coffee Organization’s website is a treasure trove of information. Individuals looking to garner additional information are encouraged to check out the resources you can find here.

Coffee is indeed one of the most loved products in the world. Everywhere you look, there are big and small coffee shops and coffee products that are just too amazing to resist. Are you a coffee lover too? What can you say about the information listed above?

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