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Coffee and Tea Manufacture Industry Profile Excerpt
| SIC Codes: 2095, 2099 NAICS Codes: 311920 Page Length: 10-12 Last Quarterly Update: 6/23/2008 View Sample Industry Profile |
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The coffee and tea manufacturing industry includes about 250 companies with combined annual revenue of almost $6 billion. Major companies include divisions of Procter & Gamble, Kraft Foods, Nestle, and Sara Lee. The industry is highly concentrated: the top 50 companies hold over 90 percent of the market.
COMPETITIVE LANDSCAPE
Consumer taste and population growth drive demand in the consumer sector, while economic growth of businesses, like 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 industry is capital-intensive: average annual revenue per worker is about $500,000.
Coffee and tea manufacturers face intense competition from other beverage companies, especially soft drink, bottled water, and juice manufacturers. Although the US coffee market is in long-term decline, the US is the largest coffee consumer in the world.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include roasted coffee (70 percent of the market); tea (15 percent); and coffee concentrates (10 percent). Roasted coffee includes whole beans and ground-roasted beans. Tea includes tea bags, and 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 ...
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