Gabriella Oakley
August 10, 2023
- Starbucks topped the list with an annual revenue of $32.3 billion in 2022
- North American & European businesses dominate the top 10
- JAB Holdings owns 2 of the top 3 coffee shop brands
IT’S ESTIMATED that around the world, we drink more than 400 billion cups of coffee every single year. And with consumption growing year on year, there’s plenty of money to be made in the sector. But who tops the list?
Without exception, the top ten companies in the world with the highest annual revenue are large-scale coffee chains and commercial roasters from North America and Europe.
The list is as follows:
- Starbucks – $32.25 billion
- JDE Peet’s Coffee – $9 billion
- PNRA (Panera Bread) – $6 billion
- Tchibo – $3.8 billion
- Luigi Lavazza S.p.A. (Lavazza) – $2.7 billion
- Tim Hortons Inc. – $2.63 billion
- McCafé – $2.42 billion
- Strauss Group – $1.8 billion
- Melitta Group – $1.7 billion
- Dunkin’ Brands Group, Inc. – $1.25 billion
From this list, we can see some discernible trends among the coffee sector’s most successful brands. First and foremost, two of the top ten on this list aren’t primarily known as coffee companies. Instead, Panera Bread and McCafé’s owner McDonald’s are better known for food, with a secondary focus on coffee.
This is indicative of a larger trend – at the top end of the industry, consolidation means many of these massive multinationals have a wider holding across the wider food and beverage segment.
However, the number-one winner stands out from the others here. While Starbucks does offer food, it has clearly been an out-and-out coffee brand from the day it was founded.
Consolidation is another important point to consider. While Starbucks does top the list, JAB Holding Company owns two of the top three – meaning that while this is where these brands rank, the presence of larger multinationals makes calculations more difficult. JM Smucker, for instance, owns Folgers and holds Dunkin’ Donuts under licence.
Looking behind the brands
On the topic of conglomerates, it would be remiss not to mention Nestlé S.A.; while not a coffee brand outright, it is certainly the largest organisation operating in the coffee sector.
- Nestlé is the 22nd largest company in the world by market capitalisation, at $337 billion.
- In 2022, the Nestlé Group generated sales of about CHF 94.4 billion worldwide. For reference, coffee comprised approximately $25 billion of Nestlé’s sales in 2021.
- In 2017, Nestlé paid about $425m for its stake in Blue Bottle, one of a series of deals it has made with specialist food and beverage operations.
- In 2018, Nestlé agreed to buy the rights to sell Starbucks’ coffee and tea in grocery and retail stores for more than $7 billion. This builds upon their already-strong coffee portfolio, which includes Blue Bottle, Nespresso, and Nescafé.
It’s telling that the largest actor in the coffee sector by far is a huge conglomerate which owns dozens of subsidiary coffee brands. But Nestlé isn’t alone.
JAB Holding Company, a German conglomerate, also owns a portfolio of successful companies within the coffee sector including Panera Bread, JDE Peet’s and Caribou Coffee.
JAB’s coffee and hospitality brands comprise 70% of its $34 billion investment portfolio, totalling over $23 billion in assets. The estimated net worth of JAB Holdings is at least $17.3 billion dollars as of August 2023.
Wolfgang Reimann and his family own 95% of the firm. Wolfgang alone has a net worth of $5.4 billion. The family is one of the richest families in the world – the five Reimann siblings are estimated to have a combined net worth of at least $20 billion.
JAB also owns 27% of Keurig Dr Pepper Inc with a stock worth over $16.3 billion. In turn, KDP then owns 13 coffee brands including Green Mountain Coffee Roasters and Tully’s Coffee, and has an annual revenue of over $14 billion.
The Coca-Cola Company is another prominent player with a diverse portfolio of major coffee brands.
For example, Coca-Cola purchased Costa Coffee for over $5 billion in 2018. In June 2021, its wholly-owned subsidiary, CC Beverages Holdings II B.V., acquired a 30% equity shareholding in Casa Del Caffè Vergnano S.p.A. (Caffè Vergnano). The Coca-Cola Company’s annual revenue in 2022 was over $44 billion.
The list goes on and on; American-owned food and beverage companies such as Mondelez, Kraft Heinz, and JM Smucker all turn over tens of billions of dollars. This makes “true” calculations of the top-earning businesses in the coffee sector far more difficult than it may initially seem.
Looking elsewhere
Consolidation is not unique to North America and Europe, however. For example, Chinese private equity firm Centurium Capital became the controlling shareholder of Luckin Coffee in the spring of 2021, after making significant capital injections of $240 million into the company.
Indeed, many Chinese coffee brands got their start from large tech conglomerates that took a vested interest in the coffee sector.
As such, wealth in the global coffee industry is concentrated around consolidators prioritising scale and acquisitions, rather than coffee itself. These conglomerates focus on expanding their market presence, acquiring “smaller” brands, and leveraging economies of scale.
And beyond the consumption end of the market, there’s of course plenty of money in trading. While this is difficult to break down – as most major coffee traders work across a range of agricultural products – their involvement in the industry does play a part.
For example, ECOM Agroindustrial is a global commodity trading and processing company that specialises in coffee. Its annual revenue was $865 million in 2021. Other notable commodity traders with an interest in coffee include:
- Louis Dreyfus Company ($60 billion in 2022)
- Olam International ($35 billion in 2021)
- ED&F Man ($6.9 billion in 2022)
- Neumann Kaffee Gruppe ($2.4 billion in 2021)
- Grupo Montesanto Tavares ($287 million in 2019)
- Mercon (no reliable figure could be found)
- Sucafina (no reliable figure could be found)
So, what can we draw from this?
Well, two conclusions. Firstly: the companies generating the highest revenue in the coffee sector are large-scale roasters and coffee chains.
Secondly, it’s also clear to see that most of the wealth in the coffee sector is concentrated in major consuming markets (such as the US and Europe) as we’d expect.
It seems unlikely that either of these points will change at any time in the near future, but it will certainly be interesting to watch what happens as the industry evolves.
