Photo: Flickr/Thomas Abbs
The $2.9 billion ground coffee industry is experiencing an acceleration of sales growth right now. At the same time, commodity costs have risen to their highest levels in 14 years, driving prices way up.Kraft just yanked up its prices for the fourth time in a year and other coffee brands including J.M. Smuckers and Green Mountain are following suit.
Sales for coffee producing companies have risen more in the last three months total food sales in the last year.
Citi has looked into the coffee market, reviewed data from Food, Drug and Mass Merchant sales data and Wal-Mart, and have come to some interesting conclusions on who’s really winning in this new coffee price surge.
Coffee sales have grown more in the past three months than total food sales have grown in the last year.
Coffee sales growth has outpaced food sales for the past five years. Sales growth for coffee increased by 14% in comparison to 2.2% for total food in the past three months.
The price of raw coffee beans has doubled in the past year and is approaching its highest level since 1997.
Sales were up at Green Mountain by 83.2% followed by Kraft at 8.3% and Smucker with 5.7%.
Prices for Kraft's Maxwell and Yuban brands increased by 22% or $0.70/lb. Starbucks and Zanetti also just hiked prices up following Kraft's 12% increase at Starbucks.
After two years of private label coffee outperforming branded coffee, sales and volume for branded coffee won out in 2010.
Though in the last three months private label coffee sales have outpaced branded.
Tully's showed growth of 119% and Green Mountain Coffee had 85.6%.
J.M. Smuckers' Dunkin doughnuts brand had the fourth highest sales with $55.1 million.
Maxwell House had sales of $159.0 million and Starbucks came in with $76.8 million. Starbucks also had the fifth-highest sales growth of 14.4%.
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