Off the boil: Falling commodity prices have lowered revenue, while the weak pound has dented profit

The Coffee, Tea and Spices Wholesaling industry imports and distributes important grocery staples, including tea, coffee, cocoa and spices. Due to the industry’s reliance on commodities, fluctuations in revenue are largely associated with any volatility in commodity prices. The sharp drop in world cocoa prices in 2017 therefore had a significant effect on the industry, as it led to industry participants being pressured to lower their prices, leading to a considerable drop in industry revenue in 2017-18. Alongside this, as the majority of these commodities are priced in US dollars, the sharp fall in the value of the pound following the EU referendum increased the cost of importing goods for resale, which has hampered profit margins...read more.

Industry Statistics & Market Size
Revenue
£2.3bn
Annual Growth 14-19
2.5%
Forecast Growth 19-24
Profit
Employment
2,838
Businesses
494

Industry Threats & Opportunities

  • Changing consumer trends have benefited coffee and decreased demand for black tea
  • Profit is less volatile than revenue, as many operators hedge against fluctuations in commodity prices
  • The potential imposition of tariffs on downstream goods could lower demand for the industry
  • Industry Report - Industry SWOT Analysis Chapter

    Industry value added, a measure of the industry's contribution to the wider economy, is expected to decline at a compound annual rate of 0.2% over the 10 years through 2023-24, while UK GDP is expected to grow at a compound annual rate of 1.7% over the same period. Although this suggests that the industry is in the decline stage of its life cycle, it exhibits a number of traits characteristic of a mature industry.Tea, coffee and cocoa are regarded as staple goods by most consumers and are therefore relatively immune to fluctuations in the economic cycle. During the past 10 years, however, changing consumer trends have caused tea consumption to decline while coffee consumption has risen. Coc...purchase to read more.

    Additional Insights for the Coffee, Tea & Spices Wholesaling Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Coffee, Tea & Spices Wholesaling Industry are

  • Guaranteed supply of key inputs
  • Having an extensive distribution/collection network
  • Access to the latest available and most efficient technology and techniques
  • IBISWorld analysts also discuss how external factors such as Exchange rate - US dollar per pound and World price of coffee in the Coffee, Tea & Spices Wholesaling industry impact industry performance..

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    What's in this report

    What is the Coffee, Tea & Spices Wholesaling Industry?

    This industry wholesales coffee, tea, cocoa and spices. Wholesalers perform no additional processing beyond repackaging, instead focusing on storing and distributing products.

    Industry Products
  • Tea
  • Coffee
  • Cocoa
  • Spices
  • Industry Activities
  • Wholesaling coffee and coffee substitutes
  • Wholesaling tea
  • Wholesaling cocoa, cocoa butter, cocoa fat and cocoa oil
  • Wholesaling spices
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Exchange rate - US dollar per pound
  • World price of coffee
  • World price of cocoa
  • Demand from cafes and coffee shops
  • Demand from coffee processing
  • Demand from chocolate and confectionery production
  • Demand from supermarkets

  • Current Performance
  • Fluctuating prices
  • Competitive threats
  • Hot commodities
  • Demand trends
  • Chart: Revenue Growth

  • Industry Outlook
  • A weak exchange
  • Hot coffee, tepid tea
  • Wholesale bypass continues
  • Table: Coffee, Tea & Spices Wholesaling Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Coffee, Tea & Spices Wholesaling Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Chocolate & Confectionery Production
  • Coffee Processing
  • Supermarkets
  • Full-Service Restaurants
  • Food-Service Contractors

  • Key Selling Industries
  • Condiments & Seasoning Manufacturing
  • Freight Forwarding & Customs Agents
  • Tea Processing
  • Warehousing & Storage

  • Products & Services
  • Coffee
  • Cocoa
  • Tea
  • Spices
  • Chart: Coffee, Tea & Spices Wholesaling Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Food processors
  • Food-service providers
  • Major retailers
  • Specialty stores
  • Chart: Major Market Segmentation for the Coffee, Tea & Spices Wholesaling Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Wages
  • Depreciation, rent and utilities
  • Other costs
  • Chart: Cost Structure Benchmarking – Sector vs Coffee, Tea & Spices Wholesaling

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Coffee, Tea & Spices Wholesaling Industry

  • Industry Globalization
    Ecom Agrotrade Ltd, Jacobs Douwe Egberts GB Ltd, Olam Europe Ltd, R Twining & Company Limited,
  • Table: Ecom Agrotrade Ltd - financial performance
  • Table: Jacobs Douwe Egberts GB Ltd - financial performance
  • Table: Olam Europe Ltd - financial performance
  • Table: R Twining & Company Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Coffee, Tea & Spices Wholesaling Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Coffee, Tea & Spices Wholesaling Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    El Nino Phenomenon
  • A weather phenomenon caused by a temporary change in the climate of the Pacific Ocean.
  • Vertically Integrated
  • Where a firm owns its upstream suppliers and/or its downstream buyers. Manufacturers and retailers commonly own their own wholesaling division.
  • Wholesale Bypass
  • The process by which manufacturers bypass wholesalers in order to establish direct relationships with retailers such as supermarkets.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Coffee, Tea & Spices Wholesaling market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Coffee, Tea & Spices Wholesaling:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Coffee, Tea & Spices Wholesaling market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Coffee, Tea & Spices Wholesaling, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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