Coffee has been the fuel for workers across the world for years. The exact history of coffee is unknown, but the discovery of its energising effects dates back to the 15th century in Ethiopia. It soon made its way to Cairo, Mecca, and the Middle East before reaching Italy and eventually the rest of Europe. Now 500 billion cups of coffee are consumed every year giving the industry value of $20 billion. Not bad for a cup of energising black liquid.
Photo by Jason Betz via Unsplash
Beverage companies across the globe are trying to enhance their business model and cash in on the coffee. With consumers becoming more conscious about health, they are making a shift away from sugary drinks and choosing no-sugar caffeinated beverages and coffee to avoid the mid-afternoon slump. Recently Coca-Cola announced that they would make a big push into the industry with the release of their own Coca-Cola Coffee in 25 markets this year, as well as plans to start selling ready-to-drink coffee products through their newly acquired Costa coffee brand.
Coca-Cola has introduced coffee-infused sodas before to some markets, though not yet on a global scale. Photo by Olena Sergienko via Unsplash.
It’s not only Western companies trying to get in on the coffee cash – last week Luckin Coffee filed for IPO with the U.S. Securities and Exchange Commission, reportedly seeking to raise $800 million for a $5billion valuation. However, Starbucks CEO says the rivals’ business model is unsustainable and that there is only so long a company can offer “heavy, heavy discounts”, but it hasn’t stopped Luckin Coffee opening 2,370 stores in less than two years.
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Despite China’s per capita coffee consumption is just 6.2 cups per year, compared to 388 in the U.S. the Seattle-based company still opened the world’s biggest Starbucks in Shanghai and over 3,600 stores across China. However, the key to Starbuck’s success in China is less about the coffee and more about the novelty of relaxing in a foreign-owned establishment between work and home, which offers a comfortable space and also a range of tea-based beverages.
Photo by Luke van Zyl via Unsplash
So what is the future for coffee?
Cold coffee drinks have also taken a hike in sales with ready-to-drink chilled coffees growing annually in the US and making it the fastest growing segment in the coffee industry. So, expect a lot more quick coffee drinks making its way into supermarkets and convenient stores.
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The industry is thriving more than ever before, and as long as it continues to provide caffeine and low-calories to consumers, companies will continue to put their foot in the door. The biggest challenge is to turn the nation of tea-drinkers in the Middle Kingdom into coffee lovers, as after all China is the third largest consumer market after the US and EU.
Did you know? With the Sherpa’s DaiGo service (daily 14:00-17:30) you can ask one of our couriers to deliver coffee and cake from your favourite cafe or pick up a ready-to-drink coffee from your local convenience store. Open the Sherpa’s App for more details.