News & Opinion

High coffee prices, stubbornly sustained over the last two years, are emerging as a lasting reality for the coffee industry. Arabica prices peaked at $2.75 in September 2024 – roasters are holding off on premium buys. The expected price drop? Unlikely to happen soon.

Dunkin’, one of the most recognised names in American fast food and coffee, recently declared bankruptcy in the Netherlands and Belgium. Only 12 months ago, the Van der Valk hotel group took a majority stake in its Benelux franchises. This is a stark reminder of the difficulty in replicating domestic success abroad.

Alupak AG, the Swiss packaging company known for its pioneering role in coffee capsule manufacturing, is preparing for the future. The capsule market has surged since Nespresso lost its patents, with over 400 competitors now in play. As the market grows, regulators are tightening the restrictions on waste.

In a decision that has divided stakeholders across industries, the European Union (EU) has announced a 12-month delay in the implementation of its Deforestation Regulation (EUDR).  The delay was driven by both technical and political factors. After 20 years in development, EUDR remains firm, but does this delay hint at easing requirements?

In late 2023, the Alshaya Group, a major franchise operator in the Middle East and North Africa (MENA), reportedly put plans to sell a minority stake in its Starbucks franchise on ice. Political tensions and growing “boycott, divestment, and sanctions” movements may be factors. Homegrown brands like Barns are expanding fast, aiming for 1,000 outlets globally by 2030.

JAB Holding Company, the private investment firm known for its vast consumer goods portfolio, recently announced a pivot towards building a global insurance platform. F&B's appeal is fading – JAB sold 100 million Keurig Dr Pepper shares in March at 25% below their 2022 peak. JAB's pivot could reshape the industries it's exiting, especially coffee

In a surprising move, Black Rifle Coffee Company has struck a distribution deal with Keurig Dr. Pepper for its line of energy drinks. Keurig will distribute Black Rifle’s new line nationwide. Energy drinks are set to lead U.S. soft drinks growth in 2024 with 4.2% sales rise. Coffee brands are diving into the lucrative segment.

Global investment firm Verlinvest recently made headlines in India's emerging coffee market by leading a $35 million Series C funding round for Blue Tokai, a specialty coffee and bakery brand. A tea-drinking nation to date, India’s retail coffee market is projected to grow by 13% until 2025. After China, India looks like the new hub for investors and specialty coffee players looking to expand.

Australian appliance giant Breville Group, known as Sage in Europe, has recently reported a record performance, achieving $1.53 billion in revenues this year, marking a 3.5% growth. Over the last 4 years, at-home coffee consumption has held steady. However, out-of-home has fallen 11% as customer trust wanes.

Starbucks, long associated with premium quality and the craft of coffee, has replaced its CEO in a move that suggests a dramatic shift in strategy. With shares falling by a record 16% in May, they jumped 24.5% when the chain announced new CEO Brian Niccol – formerly of Chipotle. The change in management could be indicative of a shift from premium to “fast” coffee for the iconic chain.

The recent acquisition of Volcafe by Hartree Partners, a global energy and commodities trading company, marks another chapter in the ongoing consolidation of the global green coffee trade. This acquisition is indicative of a broader trend sweeping through the sector. The green coffee trading sector is in crisis, and consolidation is becoming a troubling symptom.

Sports and coffee culture merged as STōK Cold Brew unveiled co-branded cold brew bottles in collaboration with Wrexham AFC, also announcing wider sponsorship ties with the Welsh football club. The strategy will benefit from both the “Ryan Reynolds effect” and growing interest in British football from abroad. The partnership announcement alone last year led to $5M in sales, and a doubling of household penetration within 3 months.

Sustainable coffee brand Reborn Coffee recently announced its planned acquisition of the iconic Korean baking brand, Bbang Ssaem Bakery. This marks a significant step in Reborn's expansion strategy as it seeks to diversify its offerings and carve a niche in the competitive coffee and baked goods market. Its shares went up 22% after the company signed an MOU. Other brands are already seeing success from their diversification into baked goods alongside coffee.

Jollibee Food Group recently acquired stakes in Botrista in the US and the Compose Coffee chain in South Korea mark a significant step in the company's efforts to bolster its presence in the coffee and tea business. Sales of specialist coffee and tea shops in Southeast Asia soared to $4.4b in 2023, making it an attractive region to investors. Southeast Asia is using service diversification and strong investor funding to accelerate growth.

Sales of whole bean coffee are poised to surpass ground coffee in Germany this year. Whole bean market share in 2023 was 46.6 %, while single-serve and ground coffee sales have declined by over 20% respectively. This could mean a shift towards higher quality consumption, or simply more at-home preparation.

The global coffee trade witnessed a remarkable shift in 2023 as Chinese imports of Brazilian coffee tripled within a year. This has set the stage for Chinese coffee chain Luckin Coffee recently entering a MoU with the Brazilian government. This is a strategic partnership that will help consolidate market power for both countries.

Nespresso's announcement to launch in India by the end of 2024 marks a strategic turning point aimed at tapping into the burgeoning coffee market in the region. Market growth is driven by a growing middle class and Gen Z. India and other emerging coffee markets are seeing an influx of international premium coffee brands and products as a result.

Recent observations in Australia point to a significant adjustment in consumer behaviour as people prioritise their spending amidst the rise of hybrid work arrangements and escalating living costs. Consumers worldwide seem to be going out less, but it’s more complicated than that. There’s a long term shift towards artisanal and DIY, especially for younger generations.

Importers are accelerating their shipments to secure coffee supplies ahead of the EUDR's implementation to avoid potential disruptions in the supply chain and mitigate the risk of non-compliance penalties. Producers and importers face uncertainty that makes risk management difficult and is already affecting pricing.