Third Wave Thrust On the Way in Coffee?

Coffee prices just surged 38% in six weeks of trading, from mid-December 2005 to late January 2006. To put the move in perspective, that's nearly the size of the range that bound java prices for all of 2001, 2002 and 2003. And while it's only a third as large as the rally that more than doubled the market value for coffee around this time last year, the latest move has covered its ground in less than a fifth of the time.

Hype and hindsight aside, such numbers alone mean little for future price action. Yet the wave pattern that these fluctuations have traced out does have clear implications for what's next in coffee -- yet another high-volatility thrust that could easily match the most recent move in terms of both size and speed.

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Research shows coffee at work increases productivity

79% of Workers With Access to Office Hot Beverage Service Say They Are More Productive During the Day

Study Released as DOL Releases Nation's Worker Productivity Figures

CHICAGO, Feb. 2 /PRNewswire/ -- As the Department of Labor unveils new U.S. worker productivity figures, the National Automatic Merchandising Association (NAMA) released new research that indicates 79 percent of employed U.S. adults with access to office hot beverage service at work report that they are more productive and 63 percent view coffee as a good way for people to get some energy, NAMA VP of Membership Services and Coffee Service Dean Gilland, NCE announced today.

Said Gilland, "This research suggests that companies that make an investment in the coffee they serve their employees pays off in terms of more productive workers. The study also suggests that employees appreciate the convenience and free or low cost service as well. Companies that don't already offer coffee service now have documented evidence that the investment will help them increase the productivity of their workforce."

The study also highlights these results among adults whose work provides a hot beverage service:

* 76 percent agree that drinking hot beverages is relaxing;
* Eight in 10 adults (79%) say access to hot beverages makes them more
productive and makes them feel like their employers care about them;
* 72 percent say their office hot beverage service is convenient;
* 63 percent say their office hot beverage service allows them to get
coffee quickly;
* 47 percent appreciate that they do not have to pay for or pay a low
price for the coffee provided by their office hot beverage service.



Added Gilland, "In addition to workers with access to coffee at work who say they are more productive, the study found that, on average, going outside of the office to get coffee takes almost three times longer than it does to get a cup of coffee from their office hot beverage service. That figure alone should be a wake up call to companies who don't provide this valuable benefit to their employees."

The study was conducted online, by Harris Interactive(R) among 3,232 U.S. adults 18 years of age or older, from September 9 through 20, 2005 and included interviews with 534 consumers who are employed full or part time and have a hot beverage service in their office. The study was conducted to help NAMA better understand the coffee drinking environment and coffee services consumer. The results of the study were weighted to be representative of U.S. adults who are currently employed full- or part-time, in addition to using propensity weights that adjust for respondents' propensity to be online. The sampling error for overall results is +/- 2 percentage points, and for those employed full- or part-time with a hot beverage service in their office it is +/- 4 percentage points.

NAMA is the national trade association of the food and refreshment vending, coffee services and foodservice management industries including on- site, commissary, catering, & mobile. Its membership is comprised of service companies, equipment manufacturers and suppliers of products and services to operating service companies. The basic mission of the association, to collectively advance and promote the automatic merchandising and coffee services industries, still guides NAMA today as it did in 1936, the year of the organization's founding.

About Harris Interactive(R)

Harris Interactive Inc. (http://www.harrisinteractive.com/), based in Rochester, New York, is the 13th largest and the fastest-growing market research firm in the world, most widely known for The Harris Poll(R) and for its pioneering leadership in the online market research industry.


Source: National Automatic Merchandising Association

CONTACT: Jackie Clark, +1-301-987-7113, for National Automatic
Merchandising Association

Web site:http://www.harrisinteractive.com/

BCE's Starbucks Watch

Starbuck's Stock Reach 52-Week High

Shares of Starbucks Corp. reached a new 52-week high today, after the world's largest specialty coffee retailer reported its quarterly earnings rose 20 percent on strong sales of its winter holiday drinks. For the 13 weeks ended Jan. 1, Starbucks said it earned $174 million, or 22 cents per share, up from $145 million, or 17 cents per share, in the comparable period a year earlier. Starbucks' stock rose $2.72 per share in early trading on the New York Stock Exchange, surpassing the previous 52-week high of $32.46. The eggnog latte proved so popular a year ago, barristas started serving up a chai tea version of the wintertime treat this past holiday season, CEO Jim Donald said Wednesday as the upscale coffee merchant reported its quarterly profit.

Michael Casey, chief financial officer, also said Starbucks sees enormous growth potential in China, where 50 new stores opened over the past year, bringing the country's total to 221. Casey said he expects China could one day have several thousand stores. Donald said the company also has high hopes for Brazil, Russia and India, three countries where it doesn't yet have any stores. Starbucks said it opened about 560 new stores in the latest quarter, bringing the number of its stores to 10,801 in 37 countries.

The company said it expects to open approximately 1,800 new stores globally over the next year, about 1,300 of them in the United States and 500 internationally. "We have never been more enthused or confident about the way in which we have been received and the ongoing profitability of the international business," Starbucks Chairman Howard Schultz said in a conference call with financial analysts.

BCE's Starbucks Watch

Starbucks Earnings Soar

LOS ANGELES, Feb 01, 2006 (Dow Jones Commodities News via Comtex) --

By Russ Britt

Coffeehouse behemoth Starbucks Corp. said Wednesday that first-quarter earnings jumped 20% during the first quarter amid 10% growth in same-store sales for January, and the company raised its outlook for fiscal 2006.

After the close, Starbucks said net income was $174.2 million, or 22 cents a share, for the quarter ended Jan. 1, compared with $144.7 million, or 17 cents a share, for the same period a year ago. Sales at the Seattle-based firm rose 22%, to $1.93 billion vs. last year's $1.59 billion.

The company's earnings were hit by a 2-cent charge due to changes in stock-option accounting. Analysts polled by Thomson First Call, predicted, on average, the company would earn 20 cents a share. Sales were in line with First Call estimates.

Starbucks shares ended trading Wednesday down 1.1%. In after-hours trading, Starbucks stock jumped 5% to $33.

The company added that same-store sales during January rose 10%. Same-store sales, a key measure for retail financial health, compare revenue at outlets open more than a year. The company was expected to report 7% sales growth during the month, according to Thomson First Call.

Starbucks said in a press release that it was raising its forecast for fiscal 2006 earnings to 68 cents to 70 cents a share, up 5 cents from its own earlier prediction. The First Call prediction had been for earnings of 66 cents a share.

The company said that its 10% growth for January likely is not sustainable throughout the year, and said 3% to 7% growth is expected throughout 2006.

Coca-Cola poised to challenge Starbucks

By Staff Writer

The Coca-Cola Company may be about to challenge Starbucks Corporation in a bid to encroach upon the hot beverage firm's dominance of the RTD coffee market, according to a report by the Atlanta Business Chronicle.

A review of Coca-Cola's recent patent and trademark applications reveals it has been quietly investigating ways to brew coffee, espresso and teas quickly in individual servings. The company reportedly filed five US patent applications in 2005 for coffee and tea 'pod' designs, single-serving brewing machines, and a system to steam milk to make hot espresso and cappuccino.

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Earnings Preview: Starbucks

Associated Press
All Associated Press News

NEW YORK (AP) - Starbucks Corp. reports earnings for the fiscal first quarter on Wednesday, Feb. 1. The following is a summary of key developments and analyst opinion related to the period.

EXPECTATIONS: The coffee retailer forecast full-year 2006 earnings of between 63 cents and 65 cents per share, including stock option compensation expenses of about 9 cents per share. Annual revenue is anticipated to grow 20 percent over 2005 sales of $6.4 billion, to $7.64 billion.

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Specialty Coffee Houses, who is your competition?

It's not Starbucks, it's the convenience store.

Coffee Sales at Convenience Stores

Ninety percent of convenience store customers purchase coffee at a convenience store over any other retail format.

Convenience stores sold more than $5.2 billion in coffee in 2004 ($4.0 billion in coffee sales, plus $1.2 billion in cappuccino/specialty coffee sales. That works out to, on average, coffee sales of $37,274 per store.

More than three out of four adult Americans say that they drink coffee either daily or regularly, according to the National Coffee Association, and convenience stores are one of the preferred destinations for coffee drinkers.

Among all beverages consumed in the United States on a daily basis, coffee ranks third in consumption, with 51 percent of adults saying they drank coffee daily. Seventy-nine percent of adults said that they drank water (bottled and tap) daily, while 58 percent said they drank soft drinks every day.

Overall, more than 108 million people in the U.S. are daily coffee drinkers, and more than 166 million have consumed coffee in the past year.

The U.S. per capita consumption of coffee is estimated to be 424 servings, which includes in-home and out-of-home roast and ground, instant, and ready-to-drink (bottled/canned) coffee.

More than one third of all coffee consumed at work (35 percent) is brought in from outside the office.

More daily coffee drinkers consume regular coffee (41 percent) than any other type. Twelve percent drink specialty coffee, 8 percent drink decaf and 7 percent drink instant coffee.

Fore more interesting facts about convenience store coffee, click More...