Coffee & Tea Manufacturing
Brief Excerpt from Industry Overview Chapter:
Companies in this industry roast coffee, blend tea, and manufacture coffee and tea concentrates. Major companies include US producers Farmer Bros, Keurig Dr Pepper, JM Smucker (owner of Folgers), and Kraft Heinz (owner of Maxwell House), as well as ITO EN (Japan), Maxingvest AG (Germany), Nestlé (Switzerland), Tata Global Beverages (India), and Unilever, the UK-based owner of Lipton.
Consumer tastes and disposable income drive demand. 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 about 95% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include roasted coffee (85% of industry revenue); tea (10%); and coffee concentrates (5%). Roasted coffee includes both whole and ground 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.
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