In the modern office, no one complains about someone leaving an empty coffee pot on the burner. That’s because the younger generation has risen above such petty affronts… Just kidding.
It’s actually because the big office coffee pot is a thing of the past. Now we have individual coffee pods that make one cup of fresh and customizable coffee. You choose your flavor and size, and in about 10 seconds you have your coffee just the way you want it.
This latest and greatest coffee technology is piping hot, too. The Washington Post reported that sales of coffee pods now account for more than a third of all the coffee sold in the United States. You can also see the ever-shrinking gap between sales of standard and pod brewing machines below.
The sudden popularity of coffee pods combined with their efficiency is cutting coffee demand in a significant way.
You see, while coffee pods are creating more trash (think about how many individual pods an average office goes through in a day), they’re actually reducing the amount of coffee wasted. Regular drip coffee machines are inefficient, require a bit of guesstimation (which may cause you to use more than you need), and the person brewing often makes more than needed, so much of the coffee “consumed” is actually getting poured down the drain.
All those factors are eliminated with coffee pods. And it’s making a real difference to demand in the coffee market. In fact, the amount of coffee consumed by Americans dropped by more than 1% this year – that’s equivalent to almost 300,000 60-kilogram bags.
Some producers are already making adjustments. The Financial Times reported that “JM Smucker Company (NYSE:SJM), which owns Folgers and Dunkin’ Donuts, cut its prices by 6% at the start of the month, followed by Kraft Heinz, which reduced the price for Maxwell House and Yuban packaged coffee by a similar amount.”
Good investing,