Many retailers have inundated the market with private-label coffee and tea products.
New York, NY (PRWEB) July 27, 2014
Over the past five years, the Coffee and Tea Production industry has fared well, thanks to many consumers valuing the taste and versatility of tea and coffee blends. According to the Coffee Association of Canada's Canadian Coffee Drinking Study in 2011 (latest data available), Canadians consume 2.7 cups of coffee per day. “This trend, coupled with many studies that have shed light on the health benefits of drinking tea on a daily basis, has stimulated consumer demand for coffee and tea products,” according to IBISWorld Industry Analyst Sarah Turk. Furthermore, more consumers have valued coffee and tea products made with input commodities, such as coffee beans and tea leaves, that are derived ethically from coffee bean or tea leaf plantations. As a result, many Canadians pay a premium for fair trade and organic products, thereby bolstering industry revenue. Nevertheless, the industry has still contended with many challenges. For example, as more chain retailers and mass merchandisers have characterized the retail sector, coffee and tea producers have grappled with retailers using their large-scale operations as leverage to secure low-cost prices for industry products.
“Further exacerbating this trend, many retailers have inundated the market with private-label coffee and tea products while using in-store promotional activity to develop a strong customer base, which has intensified competition for industry operators,” says Turk. However, as consumers have valued coffee and tea products with high quality and consistency, the industry has benefited from more consumers purchasing specialized blends, compared with low-cost tea and coffee products sold in bulk. During the five years to 2014, industry revenue is anticipated to grow at an annualized rate of 0.8% to $1.3 billion, including 0.4% revenue growth in 2014, which can be attributed to strong downstream demand for coffee and tea from many retailers, such as supermarkets and grocery stores.
During the five years to 2019, industry revenue is forecast to grow. The industry will benefit from more coffee and tea aficionados, such as consumers who are interested in the health merits of tea and who purchase specialty tea infused with additional fruit flavours.
For more information, visit IBISWorld’s Coffee and Tea Production in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry primarily roasts and packages imported coffee beans, as well as blends and packages tea. They may also produce coffee extracts or concentrates, including instant or freeze-dried varieties.. Establishments that primarily bottle or can iced coffee and tea, as well as ready-to-drink tea, are excluded from the industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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