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Coffee Production

Coffee Production

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Executive summary

Operators in the Coffee Production industry purchase coffee beans and process them into roasted or ground coffee products. Over the five years to 2022, the world price of coffee has experienced volatile ups and downs, ultimately contributing to an overall decline in industry revenue during the period. Although coffee producers have largely passed on volatile coffee bean prices to consumers, mitigating shocks to industry profit, price-based competition has limited the extent in which operators can remain competitive. Furthermore, an appreciated dollar during a portion of the current period has constrained industry exports. Overall, industry revenue has declined at an annualized rate of 5.1% to $10.7 billion over the five years to 2022, including an increase of 2.0% in 2022 alone as the economy continues to recover from the COVID-19 (coronavirus) pandemic.
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Each report includes:

industry revenue;

industry profit;

industry margin;

industry employment;

industry major players;

industry key external drivers;

industry product & structure segmentation;

industry key trends;

industry Life Cycle;

industry Geographic Breakdown;

industry Key Success Factors;

industry Key statistics for previous years;

forecast of industry Key statistics for the next 5 years;

Reference Wordlist

BARRIERS TO ENTRY
High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry.

CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor.

CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e. year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator.

DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived by adding imports to industry revenue, and then subtracting exports.

Colloquial Terminology

ARABICA
A premium variety of coffee bean native to Africa, with which most premium coffee products are made.

GREEN COFFEE
Natural coffee beans extracted from the fruits after harvesting.

GROUND COFFEE
Roasted coffee reduced to small or very small particles, depending on the end product it is being used for.

ORGANIC
A product made from mineral and plant ingredients rather than derived chemical compounds.

PREMIUMIZATION
An increasing preference toward high-end products, such as beverages.

Details

The current period has also been defined by the emergence of numerous coffee trends. The number of individuals consuming gourmet coffee, who typically consume products with less packaging at premium prices, is at an all-time high. Additionally, the recent introductions of cold brew and nitrogen-infused coffee have been a major boon for coffee producers. During the current period, operators have increasingly offered specialized product portfolios, such as sustainable coffee in environmentally friendly, single-serving formats. Demand for coffee from online retailers has also grown significantly during the period. Shifting consumer preferences have led many operators to consolidate and streamline operations to expand into niche product lines.

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