As a commodity, coffee is traded in multiple different stocks, but there is not a unifying sector or exchange-traded fund (ETF) for the industry. Coffee is one of the most highly traded products on the global market and the coffee industry is quite complicated with many people involved – from the growers and farmers to processors, distributors, and retailers.
The different stocks related to the industry can generally be separated into the retailers and consumer-focussed companies and the producers, distributors, and packagers. There is more than one way that coffee is traded, and the different methods of trade have implications across the entirety of the supply chain for all of the individuals and businesses involved – including the consumer.
This article will go into detail about some of the ways that coffee is traded around the world including the different stages in the trade process, the different trade standards and the different people involved in the industry.
Is Coffee Traded on the Stock Market?
While coffee as an individual commodity does not have a stock of its own, coffee-related stocks can be found that will fluctuate in accordance with the commodity value of coffee. There are opportunities on the stock market on the consumer side, such as Starbucks, Nestlé, or Keurig, as well as in distribution, transportation, and production.
How Do I Buy Stock in Coffee?
Many different brokers will help you to get involved in coffee-related stocks if you are interested, and it is worth doing some research into what options are available. Because it is not under a single sector or ETF, the coffee-related stocks that you can look to buy will be those of different companies that trade within the industry.
Will Coffee Prices Go Up in 2022?
This price of trading coffee is affected by many factors such as inflation, oil prices, political instability, and weather conditions in the countries where it is grown. Due to the impact of climate change, it is likely that the price of coffee will continue to rise as drought conditions are becoming more common in many coffee-growing countries.
What is the Difference Between Commodity Coffee and Specialty Coffee?
On the market, coffee is usually traded as either commodity coffee or specialty coffee, and you will often see this distinction on the labels of products and in the marketing from companies. The difference between these two trading classifications is essentially in the way that the product is viewed and valued by the purchasing party.
What is a Commodity Coffee?
When coffee is traded as a commodity it is valued solely on factors like availability and demand, rather than on the quality of the product. Commodity coffee is traded like gold or oil, and the price is set based on the market value of coffee around the world at any given time, so it is never stable or consistent.
What is Specialty Coffee?
Specialty coffee is a classification that allows for value to be attributed to the beans based on the quality of the product and the expertise of the producers. This means that the actual coffee itself is the determining factor in its value, rather than just its availability, so farmers and growers can expect a fairer price for good coffee.
What Defines Specialty Coffee?
To qualify as specialty coffee, the beans have to have scored at least 80 out of 100 on a standardised scale, as scored by a professional. This means that buyers can pay more for higher quality and better production standards, and farmers and growers can expect a better price that they can rely on, outside of market fluctuations.
What is Fairtrade Coffee?
Fairtrade is a certification given to coffee producers and retailers that focuses on delivering a price to farmers and other members of the supply chain that is fair and equitable. It is designed to improve the quality of life for farmers and bring investment into their communities as well as into the production process.
How is Coffee Produced and Sold?
The coffee industry has a long supply chain that involves many different people, starting with the farmers who grow the beans which can then be harvested and prepared for transportation. These beans will need to be transported (usually internationally), milled, roasted, ground, and packaged before they can be distributed to wholesalers and retailers.
How Does Coffee Get Transported?
Coffee is usually shipped via sea or by air, with bulk coffee beans being stored in large 60kg sacks. Sea freight allows for significantly more coffee to be transported at a time (with greater capacity on-board) and is therefore much cheaper, but air freight is usually more reliable and takes a lot less time to arrive.
Where is Coffee Grown?
More than 50 countries around the world grow coffee, from Brazil to Ethiopia, and the location of the farms has an effect on the flavour of the beans as well as the cost of transportation. Different countries specialise in different varieties of coffee and the price can vary greatly as a result.
What are the Different Varieties of Coffee?
The two main varieties of coffee are Arabica and Robusta, but within both of these, there are many different sub-varieties as well. Arabica is generally seen as more flavourful and finer quality so it fetches a higher price whereas Robusta coffee is usually more bitter and contains more caffeine.
Which Countries Produce the Most Coffee?
Brazil is the largest producer of coffee in the world, at around 2.5 million metric tons of beans per year, and Vietnam comes second with 1.6 million metric tons. Colombia has fallen into third place in recent years after the rapid expansion of the coffee industry in Vietnam as they produce less than 1 million metric tons yearly.
What is the Biggest Coffee Company in the World?
Starbucks is not only the most well-known coffee company worldwide but it is also the largest, with gross annual sales of $22.8 billion. Tim Hortons is the second-largest global coffee chain in terms of sales, bringing in $3 billion per year, and the European company Costa Coffee was acquired by Coca Cola for £3.9 billion in 2018.
Hi, I’m Jen Williams, chief editor and writer for ThirstPerk.com.
I’ve been drinking coffee and tea for most of my life, but it wasn’t until I started working at Thirstperk.com that I became an expert on the subject. I’m a total caffeine addict who has spent hours upon hours reading about and experimenting with the different types of coffees out there in my search to find the perfect cup of joe.
I’ve been a tea lover for as long as I can remember as well. I grew up in a house with a mom who loved to drink herbal tea, and I think that’s where my love for tea first began. These days, I’m always on the lookout for new and interesting teas to try, and I love experimenting with different brewing methods and flavoring combinations.
