Survey: How are coffee franchises faring in the recession?

Franchise Direct, a franchise portal, has recently conducted a study on how coffee franchises are faring in the recession. You can find the full 4,000 word survey at the link below.

Here are some of the key points from the survey, which shows that coffee franchises are recession-resistant:

Talking Point one: Coffee consumption has increased or remained level in the last year among key demographics. According to our study, coffee consumption was up last year among 25 – 39-year-old’s and remained steady among 40-59-year-olds. These are the most essential target demographics for coffee franchises and the findings show that people will continue to drink coffee despite the hard economic times.

Talking point two: The coffee industry is now diversifying. Market leader Starbucks experienced a very difficult year in 2008 and consumers are now beginning to look for cheaper options for coffee. Coffee franchises are reaping the rewards. Equally, coffee franchises are going green. The popularity of fair trade and organic coffee runs right in line with a general shift towards more eco-conscious consumerism in the US.

Talking point three: Location is the most important factor in defining the success of a coffee franchise. The rise of van-based or kiosk coffee franchises in recent years has allowed coffee franchisees to go mobile, opening themselves to greater footfall.

Talking point four: The renaissance of coffee drinking in the US is underpinned by a number of studies by elite American universities claiming that coffee has a number of health benefits. Harvard and UCLA are just two of the colleges who have stated that drinking coffee is good for you.

Full Survey

Coffee Soars on Trucker Strike

Colombia Disruption Adds to Already-Short Supplies

By TOM SELLEN
Wall Street Journal

Arabica coffee futures rallied 4.2% on speculative fund buying and concern that a nationwide truckers' strike in Colombia may disrupt already-short supplies.

The nearby May coffee contract traded on ICE Futures U.S. in New York climbed 4.7 cents to settle at $1.1695 a pound.

The most-active July coffee contract rose 3.4 cents to close at $1.1775.

While a strong technical chart set-up and speculative buying that pushed prices up into preprogrammed buy orders played a large part in the rally, the Colombian strike news bolstered market bulls amid fear that supplies out of the world's largest producer of mild, washed arabica beans may be disrupted.

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Coffee May Jump 26% as Output Slows, Brazil Association Says

By Carlos Caminada

Jan. 14 (Bloomberg) -- Coffee may jump as much as 26 percent this year as Brazil, the biggest producer and exporter, harvests less of the bean and boosts consumption, said Nathan Herszkowicz, head of the country’s roasters association.

Prices may reach $1.45 per pound in New York near year-end after Brazilian producers finish selling a smaller crop, up from $1.1475 per pound yesterday, Herszkowicz, president of the Brazilian Coffee Industry Association, said in a Jan. 13 interview in Sao Paulo. The commodity will likely trade between $1.25 and $1.35 per pound in coming months, he said.

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DJ Mexico,C. Amer Cash Coffee: Little Trade As Buyers Eye Stocks

Last update: 8:35 p.m. EST Jan. 9, 2009
MEXICO CITY, Jan 09, 2009 (Dow Jones Commodities News via Comtex) -- Physical trading was slow this week in the cash coffee markets of Mexico and Central America as cash differentials soared on a supply squeeze for high quality beans, traders and exporters said Friday.
Traders said as concerns grew over the supply of top quality mild washed arabica beans from Colombia, the world's largest producer of mild beans, Central American coffee producers were raising their premiums. This led buying demand to switch to certified stocks instead.

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Coffee and Chocolate Holding Up in Down Economy

By Martin Zimmerman, Los Angeles Times 

In the United States, the true comfort foods are chocolate and coffee -which may provide relief for investors battered by plummeting prices for oil, gold, wheat and other products.

The prices of most commodities have tumbled this year as recession has spread around the globe, hammering consumer demand for the raw materials that go into a loaf of bread, your car’s gas tank and much more.

But cocoa and, to an extent, coffee have bucked that trend, and some analysts think they can keep doing so.

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World Coffee Deficit May Be 8 Million Bags in 2009-10

By Claire Leow
Dec. 9 (Bloomberg) -- World coffee consumption may outstrip production by as much as 8 million bags in 2009-10 because of the smaller crop in Brazil, the top grower, said Nestor Osorio, International Coffee Organization Executive Director.

``It's a tight situation that will support prices,'' Osorio said in an interview today in Ho Chi Minh City.

Prices of the mild-tasting arabica coffee used by Starbucks Corp. jumped 6.1 percent yesterday, the biggest gain in almost three years as Brazil's Agriculture Minister Reinhold Stephanes said output may drop as much as 22 percent next year to as low as 36 million bags. Prices of the bitter-tasting robusta used in espresso and instant coffee by Nestle SA climbed 4.3 percent.

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Coffee Production to Rise 15% to Record on Brazil, Licht Says

By Claudia Carpenter

Nov. 13 (Bloomberg) -- Global coffee production will rise 15 percent to a record 139 million bags this season on bigger crops from Brazil and Vietnam, the world's largest growers, F.O. Licht said in its first estimate for the harvest that started Oct. 1.

The jump from 121.1 million bags last season will include a Brazil crop of 49.7 million bags and a Vietnam harvest of 20.9 million bags, F.O. Licht analyst Stefan Uhlenbrock said in an interview today from Ratzeburg, Germany. A bag weighs 60 kilograms (132 pounds).

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Coffee sales rise amid economic downturn

New chain coffee shops are opening up at a rate of 10 a week as Britons turn to coffee to relieve their financial woes, new research shows.

By Myra Butterworth, Personal Finance Correspondent

The boom in sales is much faster than analysts had forecast, with consumers refusing to forego their daily coffee despite the economic downturn.

Sales are set to reach £1.4 billion this year with the number of outlets rising to 3,461.

In the past year, there were 245 new Costa Coffee outlets, 160 Starbucks, 83 Caffe Neros and 78 new shops opened by smaller chains, according to research by Allegra Strategies.

Overall, 566 branded coffee shops were launched, increasing the total by 25 per cent to 2,804.

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Coffee Price to Rally on Demand, Brazil's Cecafe Says

By Aya Takada

Oct. 16 (Bloomberg) -- Coffee prices will probably rebound to $1.40 a pound within the next six months if the global credit crisis subsides, as world consumption keeps growing led by demand from emerging markets, Brazil's exporter group said.

``In Eastern Europe demand is very good,'' Guilherme Braga, general director at Brazil's Coffee Exporters Council, known as Cecafe, said in Tokyo. ``In Brazil in 2008 the growth of consumption is about 4 percent, which is very significant. It will keep growing. We are very optimistic about it.''

Coffee futures in New York have plunged 34 percent from a 10-year high of $1.7190 a pound Feb. 29. They reached a 15-month low of $1.0935 on Oct. 8 on concern the credit freeze will slow the world economy, cutting commodity demand. Inventories in warehouses monitored by ICE Futures U.S. were climbing and exports from Brazil, the biggest producer, increasing.

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Coffee Falls to 11-Month Low as Credit Crunch Crimps Buying

By Ron Day

Oct. 3 (Bloomberg) -- Coffee fell to its lowest price in New York since November amid speculation that tight credit has made it hard for buyers to finance purchases.

Credit markets have frozen as banks balk at lending to each other for longer than a day amid concern that more of their peers will fail. U.S. payrolls shrank in September, signaling the country may be heading for its worst recession in at least a quarter century as the 13-month-old credit crisis worsens.

``We're not getting enough small loans to get coffee and keep it in place,'' said Jaime Menahem, a trader at Alaron Trading Corp. in Miami. ``We're seeing a slowdown across the board in demand for any commodity.''

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Coffee defies commodities slump

Robert Laing
Published:Sep 26, 2008
The Times (New Zealand)

NEVER mind gold or oil, buy coffee. The ‘‘coffee and tea” item in August’s producer price index basket showed the biggest month-on-month jump of 12.6 percent.

Coffee defied August’s general slump in commodity prices, which saw crude petroleum and natural gas fall 7.8 percent, bringing oil’s annual inflation to zero.

The International Coffee Organisation (ICO) said August’s price jump partly due to hurricanes destroying coffee plantations in key Caribbean growing areas like Cuba and Haiti.

While Brazil is expected to produce a record coffee crop this year, its growing domestic consumption means its exports are likely to drop.

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World coffee consumption to touch 128 million bags in ’08

Jaishankar Jayaramiah
Sep 22, 2008

World coffee consumption, both in producing and exporting countries, is likely to touch 128 million bags (60-kg per bag) in 2008.

According to recent statistics released by the International Coffee Organisation (ICO), the preliminary estimation of world coffee consumption in the calendar year 2007 stood at around 124.7 million bags, up by 2.9% from 121.1 million bags consumed in 2006.

"If current growth continues, world consumption could increase to around 128 million bags in 2008," said Nestor Osario, executive director of ICO in his latest statement.

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MARKET TALK: ICE Coffee Firms; Dlr Eases, Options Expire

0941 EDT [Dow Jones] -ICE Dec arabica coffee is up 65 points at $1.3910 a pound, rising off Thursday's 3 1/2-week low but staying in that day's range. March is up 45 points. "We're higher with other commodities as the dollar eases this morning," a New York desk trader says.

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ICE Coffee Slides; Sell Stops Triggered

[Dow Jones] - ICE Dec arabica coffee is down 290 points at $1.3790 a pound after touching a 3 1/2-week low as sell stops were sparked. March is off 280 points. "I'm looking for prices to rise this fall but for now the other markets are hurting us," a New York desk trader says. The CRB Index slid to its lowest level since December Thursday.

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Coffee market: Arabica down

[Dow Jones] -ICE July arabica coffee is down 175 points at $1.3385 a pound, erasing an early gain, with Sep off 180 points. "We fell back as the dollar firmed after U.S. GDP growth was reported and on thinking the Fed might raise rates eventually," a New York desk trader says.

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Coffee set to fetch higher prices after branding deal

Story by DAVID MUGONYI in London
Publication Date: 5/26/2008

Coffee from Kenya will now attract higher prices following the signing of regulations governing the sector in London Sunday.

The regulations signed under the International Coffee Agreement will allow coffee from the country to be branded thereby fetching it higher prices.

The country’s coffee is among the best in quality in the world and is used to blend others. This is the first time Kenya will be branding its coffee.

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Nicaragua Apr 2007-08 Coffee Exports Up 43% To 174,647 Bags

Nicaraguan coffee exports in April, the seventh month of the new 2007-08 crop cycle, were up 43% to 174,647 (60-kilogram) bags, the official Nicaraguan Export Center, Cetrex, said Friday.

This compares to total Nicaraguan coffee shipments of 121,803 bags in April last year during the 2006-07 harvest year, Cetrex said in a report, a copy of which was obtained by Dow Jones Newswires.

Total Nicaraguan coffee exports from the beginning of the 2007-08 cycle - Oct. 1 through April - meanwhile, were up 35% to 827,142 bags, from shipments of 612,031 bags in the October-April period of the 2006-07 cycle.

Nicaraguan coffee exports in the last 2006-07 cycle ended down 15% on the year at 1,156,577 bags, compared to shipments of 1,362,487 bags in the 2005-06 record harvest year, Cetrex reported at the end of the cycle.

But Nicaraguan exports shipped during the 2006-07 crop cycle included about 200,000 bags of carryover stocks from the record 2005-06 harvest, industry officials said.

Nicaraguan coffee production in the 2006-07 harvest ended down 41% at 932,396 bags, from production of 1,590,490 bags in the 2005-06 cycle, Nicaragua's Ministry of Agriculture said in a 2007 report.

-By Maja Wallengren, Dow Jones Newswires; 5255-5001-5725; mwallengren@hotmail.com

Colombia Cash Coffee: Diffs Stronger On Early Mitaca Supply

BOGOTA (Dow Jones)--Physical trade was slow this week in the Colombian cash arabica coffee market as cash differentials remained firm on the current tight supply, local and foreign traders and exporters said Friday.

But traders said that after a slow start to the mitaca, or mid-crop, the first lots of fresh beans were now starting to reach the market and although differentials remained firm, differentials for the more commercial grades started to show signs of weakening.

"It's been quiet. People are talking about delays in the mid-crop harvest and a reduction in the quantity," said a Bogota-based trader with a major exporter.

Physicals traders in New York, however, said the local market was exaggerating the slow pace of the harvest, saying that exports and production figures had been "remarkably stable" during the past five years and the harvest was just about to start.

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P&G ups cost of Folgers, Dunkin' Donuts coffees

Mon Mar 3, 2008 4:22pm EST

By Marcy Nicholson
Reuters

NEW YORK, March 3 (Reuters) - The largest U.S. roaster increased the list prices of some of its Folgers coffees, for the second time in three weeks, and a Dunkin' Donuts coffee, citing climbing green coffee prices, a Procter & Gamble (PG.N: Quote, Profile, Research) spokesman said on Monday.

P&G hiked the list prices of some of its Folgers coffees by 3.5 to 7 percent, and Dunkin' Donuts by 6 percent, effective immediately. The price increase was P&G's second since Feb. 11, Bryan Brown said.

"Green coffee prices have continued to rise sharply over the past three weeks. This past week New York "C" arabica and London robusta markets have traded at more than 20 cents per pound versus our previously stated price for Folgers mainstream coffee," Brown said.

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Bean counters note: coffee at 10-year high

From Bloomberg News
February 29, 2008

The price of coffee surged Thursday, hitting its highest level in a decade, as continuing weakness in the dollar kept many commodity markets in rally mode.

Coffee futures for May delivery rose 3.4 cents, or 2.1%, to $1.675 a pound in New York. Earlier in the day, the beans traded at $1.68, the highest price for a most actively traded contract since February 1998. Coffee is up 41% in the last year.

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