This article will look into some of the impacts of Coffee globally. This wild bean (which comes in 2 forms - Arabica and Robusta) has had a big impact.
1) Demand and Supply
After Crude oil, coffee is the second most sought after commodity in the world. The coffee market is over $100 billion worldwide. This means its demand exceeds natural gas, sugar, and gold. The positive ramification of this is that Coffee farms effect the economic livelihood of 25 million+ people. The countries these people live in are Asia, Africa, South America, Central American and the Caribbean. Therefore the trickle down benefits are much more positive in comparison to a commodity such as oil whereby a select few experience the positives of.
2) Consumer Demand
50% of Americans 18+ drink coffee daily and an average coffee drinker drinks 3.5 cups a day. There are instances of drinkers drinking 9 cups a day. If a Starbucks store sells 9 Grande Caffe Lattes at ~$4, that one store makes $36 daily of one coffee consumer. Not bad business.
These numbers may not surprise you that coffee shops are in high demand and have a annual growth rate of 7%. The private equity house Abraaj has recently bought Java House, an East African coffee company because of the changing demographic in East Africa. East African consumers are becoming wealthier with larger disposable incomes.
3) Environmental Impacts
According to the WWF, of all 50 countries with the highest deforestation rates, 37 were coffee producers. In order to increase coffee yields, companies began demanding that coffee was grown in the sun. Techniques to fulfil this request include using chemicals and chopping down forests which enable larger output. This doesn't only stop flora from giving earth oxygen but has negative consequences for the fauna in the region.
1) Demand and Supply
After Crude oil, coffee is the second most sought after commodity in the world. The coffee market is over $100 billion worldwide. This means its demand exceeds natural gas, sugar, and gold. The positive ramification of this is that Coffee farms effect the economic livelihood of 25 million+ people. The countries these people live in are Asia, Africa, South America, Central American and the Caribbean. Therefore the trickle down benefits are much more positive in comparison to a commodity such as oil whereby a select few experience the positives of.
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| Demand and Supply of Coffee |
2) Consumer Demand
50% of Americans 18+ drink coffee daily and an average coffee drinker drinks 3.5 cups a day. There are instances of drinkers drinking 9 cups a day. If a Starbucks store sells 9 Grande Caffe Lattes at ~$4, that one store makes $36 daily of one coffee consumer. Not bad business.
These numbers may not surprise you that coffee shops are in high demand and have a annual growth rate of 7%. The private equity house Abraaj has recently bought Java House, an East African coffee company because of the changing demographic in East Africa. East African consumers are becoming wealthier with larger disposable incomes.
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| Starbucks Coffee |
3) Environmental Impacts
According to the WWF, of all 50 countries with the highest deforestation rates, 37 were coffee producers. In order to increase coffee yields, companies began demanding that coffee was grown in the sun. Techniques to fulfil this request include using chemicals and chopping down forests which enable larger output. This doesn't only stop flora from giving earth oxygen but has negative consequences for the fauna in the region.
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| Deforestation impacts |
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