Young Americans love their coffee fix
NEW YORK, Usa-coffee demand in the United States is growing, thanks to increasing consumption by millennials, these are people who reached young adulthood around the year 2000.
Millennials are pushing US 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 1.5percent 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 sys- tems,” Arzeno said in an email. “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 con- sumption 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% of coffee in the United States:
“Daily consumption among 18- to 24-years-olds rose to 48% 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. At the same, adults 60 and older saw a drop to 64 percent from 76%, and there was also a decline for the 40-to-59 age group.
It is not clear that tighter supplies are pushing up the cost to consumers, although Starbucks increased its prices last July
COMFORTING: Bloomberg says Millennials are pushing US demand to historic records.