How Black People Can Become Starbucks Worst Competitive Nightmare
- Starbucks gets its coffee from Latin America, Africa and Asia
- 70% of coffee consumers prefer to make their coffee at home
We love our Starbucks (SBUX +2.21%), Dunkin Donuts (DNKN +0.29%) and house brewing options such as Nestle and Keurig, but as we sip our lattes and buy new coffee machine accessories, there is a lack of opportunity to buy black in this industry. Starbucks gets its coffee from Latin America, Africa and Asia. In the first half of 2019 already made over $6 billion with a year over year increase of 8.12%. Just how ripe is the coffee market for minorities to enter into?
Why This Matters: The three nations with predominantly black populations that have a substantial share in the coffee market are Brazil, Ethiopia and Uganda. These countries coffee beans are dominant in the U.S. and many European nations. Brazil produced approximately 61.7 million 60 kilogram bags of coffee in 2018, making up the majority share of the exporting market. There are other nations that have cropping potential including Costa Rica, many Caribbean islands and African countries such as Kenya and Ghana.
Starbucks gets its coffee from Latin America, Africa and Asia
The U.S. imports $1.24 billion worth of coffee from Columbia, followed by Brazil at $1.04 billion, but there is more of a demand for niche, organic and socially conscious coffee brands creating an opening in the market for others to enter. Brazil is the top producer of the coffee bean providing 40% of the global supply. With the increasing demand for organic, natural, and consciously grown crops, there is opportunity for newcomers to bring a personal innovative touch to the market.
According to the National Coffee Association in the United States, more than 70% of coffee consumers prefer to make their coffee at home. This indicates there is room to build a consumer market of home brewers, directly getting in the homes of your customers surpassing coffee chains and veteran brands such as Maxwell House or Mount Hagen.
Situational Awareness: There are black-owned coffee companies such as Not So Urban Coffee and Roastery, Orange Street StoreHouse and Don Carvajal Café that have taken the leap to enter an industry with heavy hitters, standing out with amazing products and an ethical business model that benefits the people where the coffee bean is sourced. There should be support of the black coffee entrepreneurs who are taking the lead, but there is room in the market to have plenty of players creating a coffee just right for someone in the morning.