The Business of Coffee: 10 Surprising Financial Facts

By: Jeremy Biberdorf

November 17, 2014

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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About the Author:

Jeremy Biberdorf is the founder of Modest Money. After working many years in the website marketing industry, he decided to take on blogging full time and also get his finances headed in the right direction. Also check out his contributions to Equities.com and Benzinga.

11 thoughts on “The Business of Coffee: 10 Surprising Financial Facts”

  1. Avatar

    I buy coffee (for home) but more often than not I end up buying it, usually because I actually prefer it later in the day and I have no way of making it at work. Cant win 😉

  2. Avatar

    It took me a while to get into coffee, but even though sometimes I take a break, I’ll probably keep drinking it from now on.

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    Petrish @ Debt Free Martini

    I never use to drink coffee until I moved to Japan. I had no idea that it was such a profitable industry. Very interesting. Its amazing how coffee has become such an important element in our everyday lives.

  4. Avatar

    We’re huge coffee fans in the Frugalwoods house. We make it at home by grinding beans and there’s just no better smell. I equate it with love and comfort now. And, we spend a little more on our beans in order to get fair trade beans that taste amazing. Well worth it in my frugal book!

  5. Avatar

    I had gotten away from coffee because I would make a pot and only drink one cup, throwing the rest away. Now I have a Keurig and while the pods are more expensive per cup, I waste less. The trade off is worth it to me.

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    Christine @ The Pursuit of Green

    There’s money to be made with every single cup of coffee we drink! Pretty interesting facts for something I drink often. Someone out there is counting the dollars everytime I take a sip.

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    Thomas @ i need money ASAP!

    Its amazing that this plant was only found in the 15th century. I enjoy my coffee in the morning but I recently switched to home brewing to save money. Spending $2-$5 a day on coffee is a financial disaster.

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    Jayson @ Monster Piggy Bank

    I completely agree that farmers do not get what they deserve. It’s a sad fact that business is business. The only help that we can do is to consume more coffee so that these farmers can feel that impact more.

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    Daniel from Star Domestic Cleaners

    It’s like with most commodities from 3rd world countries – they get very little in return, but for some it’s still what earns them a living, even though a very poor one but they still manage to make ends meet.

    These are some very curious facts.

    As to all of us sharing our coffee love here, I’ll do the same. I enjoy coffee responsibly – I allow myself only one a day. It’s not that I have a health problem or something but I think this is the right thing to do for prevention of health issues related to blood pressure, etc. Either early in the morning or in the afternoon before studying or working.

  10. Avatar

    If you like Organic Gourmet Coffee give our products a try. And if you would like to get paid for recommending our products I may have an opportunity for you.

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