Jan 18, 2013

US Coffee Revenue Set to Surpass Soda

Coffee Graph vs Soda

A cup of coffee is a popular way to start the day for many people. By lunchtime, some people will have looked for drinks elsewhere, and opted for juice, tea or soda over another cup of coffee. At least, this used to be the way things worked. In the last 10 years, US coffee consumption has increased by over 50% – while soda consumption, both for diet and regular drinks, has been in decline. This chart depicts the revenue of both the soda and coffee markets (not coffee shops, just purchased coffee), and it is easy to see that the advantage will soon be with coffee as it is set to potentially overtake soda revenue (data from IBISWorld). There are a couple of reasons that this has happened, and while studies aren’t pointing to one thing specifically, it doesn’t take a lot to see that these reasons definitely carry some weight.

  1. Coffee is healthier than soda. There are studies all the time about the new potential health benefits of coffee and caffeine. Sugar has been blamed for the “obesity epidemic and there is simply lots of anti-soda propaganda out there.
  2. Bottled water and energy drinks are popular. These categories are taking market share away from soda – and while the same parent companies are still profiting because they own products in these categories, drinkers of bottled water and energy drinks are often former soda drinkers.
  3. Coffee has class. It’s not just that we like coffee, but now consumers are much more educated and appreciative of good coffee than ever before. So, we drink more.
  4. Coffee is expensive. Unlike soda, which is inexpensive to produce, coffee is a pricey and labor-intensive agricultural product. As demand increases, so do prices and that pushes the coffee industry further into the black.

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