March 20, 2023
Coffee makes the world go round. That’s because about a billion people a day drink coffee, making it the most popular beverage in the world. No wonder retail shareholders flock to companies selling joe.
And why not? Coffee is slightly addictive, yet research has found that it is good for you. Consumers are willing to pay a premium for coffee, which means it is not as sensitive to price as other products. And it is a huge industry.
When talking coffee as an investment, most retail shareholders probably think of Starbucks (Tii:SBUX). But when it comes to investing in java, retail investors have many options.
One of them is Black Rifle Coffee Company (Tii:BRCC), a company that says it “serves coffee and culture to people who love America,” not surprising since the company was founded by veterans. Founded in 2014 by former U.S. Army Green Beret Evan Hafer, Black Rifle Coffee Company stands for more than high-quality coffee. The veteran-founded business is operated by “men and women who honor those who protect, defend, and support our country.”
As it grows, the Black Rifle Coffee is committed to hiring 10,000 Veterans to provide opportunities to the military community that helped build the company. It also strives to help other service members successfully transition from the military into entrepreneurship. The company provides assistance to veterans who seek to launch a business of their own.
Oregon-based Dutch Bros (Tii:BROS) is a drive-thru-focused coffee chain that went public in September 2021. Unlike other coffee sellers that struggled through the pandemic, Dutch Bros grew because of its drive-thru model. The company also opened 98 new stores in 2021, and it now has 538 locations in 12 states, evenly divided between franchises and company-operated stores.
While you might think of The J.M. Smucker Co. (Tii:SJM) for its jelly, coffee is actually makes up one of the largest portions of its business. Smucker's coffee brands include Folgers, Cafe Bustelo, and Dunkin' (which it licenses from Inspire Brands). For fiscal 2021, which ended April 30, 2021, the U.S. retail coffee segment made up 30% of Smucker's total sales, or $2.4 billion of $8 billion in total sales.
If you’ve worked in an office in the last decade, you certainly know the Keurig brand of coffee pods. Keurig Dr Pepper (Tii:KDP) is the result of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple. A significant part of Keurig Dr Pepper is owned by JAB, the private German holding company which also owns stakes in Krispy Kreme (Tii:DNUT),Caribou Coffee, Peet's Coffee and Panera. Keurig Dr Pepper – in addition to those named in the company – own owns a wide variety of brands including Snapple, Canada Dry, Green Mountain and Mott’s.
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