Newspaper article Charleston Gazette Mail

Millennials Drive Up Demand for Coffee

Newspaper article Charleston Gazette Mail

Millennials Drive Up Demand for Coffee

Article excerpt

Coffee demand is growing, thanks to increasing consumption by millennials.

Millennials, a demographic between ages 19 and 34, are pushing U.S. demand to historic records, according to Bloomberg. Because the United States is the biggest consumer of coffee, world demand is growing as well. "Coffee demand is robust and growing at about 1.5 percent per annum, said Carlos Mera Arzeno, a commodities analyst with Rabobank International in London.

He said there are two trends at work that are increasing coffee demand.

"One is the expansion of coffee culture, in particular the expansion of coffee shops and capsule systems, Arzeno said in an e- mail. "The other trend is the urbanization processes in emerging countries. Many people migrate from the countryside to the cities, say in countries like China, try coffee for the first time and start consuming it.

The tightening in supplies is pushing bean prices for certain varieties to their highest levels since early 2015. It is not clear that tighter supplies are pushing up the cost to consumers, although Starbucks increased its prices last July.

Bloomberg said investors are anticipating more gains. World consumption outpaced demand for the year ended Sept. 30, Bloomberg reports. The Bloomberg Commodity Index said coffee prices have the fifth-highest return this year among 22 raw materials it follows.

Arzeno expects demand over the next year to outstrip supply. "Brazil, by far the largest producer and responsible for about one third of all coffee, is likely to produce a lower crop next year due to the cyclical nature of the coffee trees, he said. Robust U.S. stockpiles appear to be providing some relief.

Bloomberg's report cited research that says millennials consume 44 percent of coffee in the United States:

"Daily consumption among 18- to 24-years-olds rose to 48 percent from 34 percent, while it climbed to 60 percent from 51 percent among those aged 25 to 39, according to the National Coffee Association in New York. …

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