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Coffee companies benefiting from cash-strapped consumers


Cassie BendelFiled under: Beans, Lifestyle by Cassie Bendel

It looks like economist’s advice to coffee drinkers is paying off for one line of business: companies that sell coffee to brew and drink at home.

In the early days of the economic downturn, you didn’t have to go far to hear money advice givers like Suze Orman or Dave Ramsey telling budget-minded consumers that their $4-a day latte habit slowly added up to big expenses. Now Kiplinger’s Personal Finance is reporting that brew-at-home coffee products are showing strong sales and steady profits in the midst of the continuing recession.

Kiplinger’s used data from the National Coffee Association to find that 80 percent of American coffee drinkers brew their own coffee at home. More than half of all American adults describe themselves as coffee drinkers, so you can imagine how fast those profits add up.

Here’s a look at how the brands you know and love are doing:

*Peet’s Coffee and Tea is seeing rapid growth thanks no doubt in part to Oprah Winfrey’s professed love for the brand. (Is there anything that woman can’t get people to buy?) In the last four years, Peet’s has quadrupled its grocery store presence as it’s now being stocked in more than 8,000 stores. The brand is also showing a strong stock performance at $26.72 per share as of Friday – that’s 27 times Peet’s projected 2009 earnings of $0.99 per share.

*Green Mountain is also having one heck of a year where stocks are concerned. At just under $69 per share, the company’s stock has more than doubled in the last year and grown 140 fold since the brand got its start in 1998. If you’re a Wal-Mart shopper, expect to see a bigger presence on Wal-Mart’s shelves soon as Green Mountain recently entered into a new distribution agreement with the world’s largest retailer.

*My personal fave, Caribou Coffee, recently turned a profit for the first time since going public back in 2005. Shares have grown from an all-time low of $1.11 late last December to $5.27 at the market’s close on Friday. Thanks to recent increases in sales at both grocery stores and hotels, Caribou can now call itself number 2 in the coffee market behind Starbucks.

Speaking of the ubiquitous green mermaid, it seems Starbucks is the only one not having the best year at a time when even McDonald’s is seeing a rise in business for their espresso sales. Kiplinger’s points out that even though the brand has cut cost by closing stores, it needs a new source of growth.


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