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Coffee and tea industry will benefit from aficionados, says report


August 5, 2014
By Canadian Vending

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Aug. 5, 2014, New York – The coffee and tea industry will benefit from
more coffee and tea aficionados, says the latest industry report from
IBISWorld.

Aug. 5, 2014, New York – The coffee and tea industry will benefit from more coffee and tea aficionados, says the latest industry report from IBISWorld.

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.

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, suggests the report.

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"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," said IBISWorld industry analyst Sarah Turk in a release. 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," said 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 2019, industry revenue is forecast to grow. It 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, suggests the report.