Coffee & Tea Manufacturing Industry Overview

Excerpt from Coffee & Tea Manufacturing Report

Companies in this industry roast coffee, blend tea, and manufacture coffee and tea concentrates. Major companies include US producers Farmer Bros, Green Mountain Coffee Roasters, JM Smucker (owner of Folgers), and Kraft Foods (owner of Maxwell House), as well as Nestlé (Switzerland), Tata Global Beverages (India), and Unilever (UK).

Competitive Landscape

Consumer taste and population growth drive demand in the consumer sector, while economic growth of businesses, such as restaurants and hotels, drives demand in the commercial sector. The profitability of individual companies depends on effectively managing raw ingredient costs, efficient operations, and effective marketing. Large companies have scale advantages in purchasing, distribution, manufacturing, and marketing. Small companies can compete effectively by offering specialized products or serving a local market. The US industry is highly concentrated: the top 50 companies generate more than 90 percent of revenue.

Products, Operations & Technology

Major products include roasted coffee (80 percent of the market); tea (13 percent); and coffee concentrates (6 percent). Roasted coffee includes whole beans and ground-roasted beans. Tea includes tea bags as well as loose and instant tea. Coffee concentrates include freeze-dried, frozen, or liquid concentrates, along with coffee substitutes. Companies in the commercial sector may provide wholesale customers coffee brewing and grinding equipment to maintain product quality, and some own and operate retail coffee shops. Specialty coffees and teas are generally high-quality, premium-priced products.