Coffee - Supply And Demand

The gourmet coffee industry has continued to grow for the Great Cups of Coffee company since it began in the year 1997. It seems that gourmet coffee has become in great demand for the American workforce and for people who love it. Coffee shops can serve as place to relax, read, socialize, work and study. Some coffee shops even provide wireless hot spots. The current trend seems to be spending five dollars on a cup of gourmet coffee. Some coffeehouse competitors of Great Cups of Coffee Company are Starbucks, Panera Bread, Dunkin Donuts and McDonalds.

“One fifth of the world’s humanity lives in countries where many people think nothing of spending $2 a day on a cappuccino. Another fifth of humanity survive on less than $1 a day”

First of all, people in local communities suffer from poverty because of imbalanced trade and payment to the commodity that they grow. Their lives depend a great deal on so-called global commodities such as coffee, cacao, and tea, which can be available to citizens in developed countries at a low price. Therefore the demand of these commodities has increased in the last few decades. According to Ambinakudige (2009), coffee that is one of the most traded commodities in the world is the main means of small farmers’ lives in developing countries. He examined how people in developing worlds are influenced by volatile global markets, especially focused on small farmers in the Kodagu district of India. In 1998, the amount of coffee export reached to US$469 million. However, after the International Coffee Agreement collapsed, known as the coffee crisis, which deregulated the international coffee supply, the labour force in coffee sector decreased in India, and 150,000 jobs were lost between 2000 and 2002 (Oxfam, cited in Ambinakudige 2009). People cannot manage their coffee plants and yield, earn enough money to return a loan on time, and get the loan the following year, which results in less investment in coffee. That cycle makes their lives worse and makes people stay in the cycle of poverty (Ambinakudige 2009 p.562).

The Coffee industry is worth about $20 billion dollar, which is largely imported and consumed by industrialized nations and is mostly exported by developing 3rd world nations. However people of all backgrounds throughout the world drink more than 500 billion cups of coffee yearly. Coffee naturally grows in warm temperatures and is grown in over 50 countries in Africa, Asia, Central America, South America and the Caribbean Islands. Coffee farms give over 25 million farmers the financial livelihood in their nation. An amazing 67% of the world 's coffee is grown in Central and South America. 90% of the world 's coffee production happens in developing nations meanwhile most of coffee’s consumption takes place in industrialized nations.

In recent decades, coffee has flooded the market with an abundance of flavors as specialty coffee shops arose on almost every street corner. There used to be minimal choices in flavors such as dark roast or light roast, but now there is almost every flavor imaginable. These specialty flavors have been tailored for niche markets such as women and even young children. After visiting three different market tiers of coffee, I was amazed at vast variety, the differences in price and the various countries of origin. The low price market I visited was King Soopers, the mid price market was Starbucks Coffee, and the high price market was Boxcar Coffee.

In bargaining power of suppliers, the interest for coffee is high in worldwide level and espresso beans can be produced just in certain geographical zones. Also, the issues connected with African espresso producers being dealt with unjustifiably by multinational organizations are generally determined with the endeavors of different non-government associations, and this is helping the expanding bargaining force of suppliers.

In the United States, there are over 24,000 coffee shops that are determined to provide a coffee experience that keeps customers coming back for more (Espresso Business Solutions, 2015.) With this growing statistic in mind, one can witness the need for coffee products to reach their destination and be served to these business’s loyal customers. In this paper we have conducted greater research on the coffee supply chain network. We will discuss the risks and the best practices that will offset these risks; conduct a financial analysis of Starbucks; evaluate a specific evaluation of Brazil and transportation followed by an evaluation of performance improvements of the coffee supply chain.

Coffee has long been one of the most sought-after commodities. Spreading north from Ethiopia and Yemen, coffee first gained popularity in the Arab world as a stimulant drug that was not banned in the Quran. It arrived in Europe via the Ottoman Empire and quickly became a drug of choice not just in Europe but in the area that the European cultures colonized. Production of coffee soon spread around the world, particularly in regions colonized by the French and Spanish. As a result, it is now a global crop and one of the world`s most popular beverages. This paper will analyze the demand conditions and the supply conditions on the global coffee market at present.

2. 1. Industry Overview and Analysis: Dunkin ' Donuts is America 's most loved throughout the day, ordinary stop for espresso and prepared merchandise. Dunkin ' Donuts is a business sector pioneer in the hot customary/decaf/enhanced espresso, frosted espresso, doughnut, bagel and biscuit classes. Dunkin ' Donuts has earned the No. 1 positioning for client dedication in the espresso classification by Brand Keys for a long time running. The industry is now forecasted to grow over the next five years, with a billion revenues in the US. This growth would be mainly driven by an improving economy,increase in consumer confidence and expanding menu offerings within the industry. Dunkin’ Donuts dominates the industry with a market share of 36.7% and other competitors like McDonalds, Costa Coffee,

The main objective of this report is to describe the change coming in the coffee industry due to limited supply with the help of economic models and concepts. For our analyses we undertake the concepts like demand and supply conditions, shortage, elasticity, and total revenue. We also examine the various other factors, which influence the total revenue, demand and supply curves and their elasticity like type of market and time period throughout this article.

With the rapid development of China economy, the coffee industry is now soaring and more and more foreign companies want to enter into the coffee market. To get a clear sight and some ideas of the market, this paper will provide it.

Instant coffee is as the main market of the coffee industry in addition to coffee hall, the coffee industry can be divided into 3 types, one is mainly to coffee hall, for example: Starbucks, Costa and etc; second is a set pattern generation of meal of coffee, for example: the Island, Babylon; the third is the theme coffee hall, for example: Turandot and Carving.

The demand for coffee shops is born from the increased number of individuals seeking coffee brewed outside of the home. This creates a larger market for coffee shops. An increased amount of people are starting their mornings off by purchasing breakfast and a cup of coffee away from home (Tuttle 2014), more people are enjoying gourmet coffee (NCA National Coffee Drinking Trends 2015 Infographic), and younger generations are demanding more coffee and coffee drinks from coffee shops (Tuttle 2014, S&D Coffee and Tea inc. 2014, Statista 2015). Coffee shops must compete with at home coffee, work place coffee, and teas for the caffeinated beverage markets (LN 2015). Demand for coffee within different markets varies, and provides competition for coffee shops. Single cup coffee makers, increasingly qualitative instant coffees, and gourmet beans are all sources of competition that could satisfy the demand for coffee. However, coffee shops are becoming more ingrained in social

The company offers a wide range of quality products that empower it to supply full service delivery to coffee houses and espresso stands. The Coffee Warehouse offers a premium class delivery service of quality hot and cold beverage related supplies, comprising whole bean or ground coffee, flavor syrups, jet teas, fruit smoothies, bubble teas, concentrated milk, fresh baked goods and assorted paper supplies. Decisions of products selections are based on choosing lines that continuously supply quality, competitive prices, and product satisfaction to customers. Currently, most of the products are only available to consumers through wholesale vendors as Cash and Carry retail outlets, which means that consumers

Christophe Reale, the managing director of Espressamente at Illy, acknowledges the demand prospects for coffee, and is aware of the growth of niche markets in traditional consuming countries and the opportunities of new consumers in emerging and exporting countries. Christophe anticipated Espressament’s place within the global market and the company’s opportunities for future growth, he knew the importance of prioritizing markets to achieve the global route to markets. Based on previous given knowledge, sales potential analysis and a ton of research, Chistophe decided to focus only on the markets or countries with the most potential. And with this diligent research and vast experience Christophe will foresee where the greatest potential for success lies, and what kind of strategy should be pursued