Investment Opportunities

Top 4 Coffee Stocks to Watch in 2021

People around the world drink more than 2.25 billion cups of coffee each day. It’s a massive industry that spans the globe. And with our caffeine-fueled world comes some investing opportunities. I’ve tracked down some of the best coffee stocks to consider.

These companies might give your portfolio a boost in the months and years ahead. You’ll likely recognize a few of them and might even support them directly. As an investor, it can be good to know the company’s products firsthand.

Before looking at the list of coffee stocks, let’s look at the industry as a whole. I’ve included some coffee stats and fun facts. Feel free to enjoy them with a cup of joe…

researching coffee stocks while drinking a cup of coffee

Investing in Coffee Industry Trends

The term “cup of joe” refers to coffee as a common drink. There are a few origin stories from the early 1900s and no matter the source, it’s become even more popular. That’s partially thanks to improved supply chains across the world…

Over 90% of coffee production takes place in developing countries. And South America is the largest producer. There are roughly 25 million small producers who make their living on coffee. The top coffee stocks rely on this vast network of suppliers.

On the consumption side, the developed countries lead the pack. They have the ability to spend more on these small luxuries. Surprisingly, Finland has the highest coffee consumption per capita. I recently learned this coffee fun fact while visiting the country on my way back from Russia.

When looking at total consumption by country, the U.S. is the largest consumer. That’s thanks to its larger population and coffee trends in the country. The National Coffee Association reported seven in 10 Americans drink coffee every week and 62% drink coffee every day.

Overall, coffee consumption is up about 5% in the U.S. since 2015. That’s not huge growth, but elsewhere in the world, it’s climbing faster. China is an emerging market that’s seeing higher demand. And one of the coffee stocks below directly addresses that growing market. Let’s now take a look at these top coffee investing opportunities…

Top Coffee Stocks

  • Starbucks (Nasdaq: SBUX)
  • Luckin Coffee ADR (OTC: LKNCY)
  • Keurig Dr Pepper (Nasdaq: KDP)
  • Nestle (OTC: NSRGY)

Starbucks Coffee Stock

Starbucks continues to lead the U.S. market and has expanded overseas. Founded in 1971, the company now has more than 32,000 stores in 83 countries. This reach helps give Starbucks economies of scale and further builds its brand.

The coffee and restaurant industry took a hit last year. And not surprisingly, Starbucks’ sales took a downturn as well… but it fared much better than its competitors. For years, Starbucks has been offering easy drive throughs and has also built up an online ordering platform. The Starbucks app makes it easy for customers and keeps them coming back for more.

Starbucks is easily one of the top coffee stocks and it won’t relinquish market share anytime soon. If anything, we’ll continue to see this company expand into new markets.

Luckin Coffee

As mentioned above, coffee demand in China is growing faster than in the U.S. and Starbucks has started capitalizing on this growth. Although, a competitor has stepped up to the plate. Founded in 2017, Luckin Coffee has already opened more locations in China than Starbucks.

Luckin Coffee was one of the fastest growing coffee stocks. Although, we found out it was a little too good to be true. The company committed accounting fraud and has paid big for its missteps. It delisted from the Nasdaq and now trades OTC at a fraction of its previous cost.

Investors beat down Luckin Coffee stock and it’s trading at a much lower valuation. However, the company has been working to overcome its mistakes. And it might be a great growth opportunity going forward. This comes with more investing risk, but with that comes the potential for more upside.

Keurig Dr Pepper

Keurig Dr Pepper has close to 30 different coffee brands. Although, the company also provides soft drinks, juices and more. This diversification helps keep cash flowing for investors.

This grouping of brands resulted from a 2018 merger of Keurig Green Mountain and Dr Pepper Snapple Group. It’s now one of the largest beverage companies in North America. And its scale helps make it one of the top coffee stocks around.

As the coffee market continues its climb, Keurig Dr Pepper should continue to reward shareholders. The company pays a small dividend and that provides some income while waiting for other capital gains.

Nestle Coffee Stock

Nestle is another diversified beverage company. It’s based out of Switzerland and offers 10 different coffee brands. It’s not a direct investment into coffee, but it still gives some decent exposure. Some of its other brands also complement its coffee offerings.

This coffee company has rewarded investors for many years. It’s also positioned to continue its growth. As consumer trends change, Nestle has the scale and money to adapt. The company spends well over $1.5 billion in research and development each year.

Nestle’s innovation is focused on plant-based foods, reducing packaging waste and much more. This helps the company remain competitive. And it might be a good addition for investors’ portfolios.

Investing in Coffee Stocks and Other Opportunities

The coffee stocks above can give good exposure to the industry. Each one has unique brands and strategies. Overall, the stock market is a bit lofty. But these stocks should push higher in the years ahead.

The markets are always moving and the top stocks come and go. So, here are some other industries you might want to consider…

If you’re looking for even better research, consider signing up for Wealthy Retirement. It’s a free e-letter that’s packed with investing tips and tricks. You’ll hear directly from Marc Lichtenfeld, a bestselling author and income expert.


About

Brian Kehm double majored in finance and accounting at Iowa State University. After graduating, he went to work for a cryptocurrency company in Beijing. Upon returning to the U.S., he started working with financial publishers and also passed the CFA exams. When Brian isn’t researching and sharing ideas online, you can usually find him rock climbing or exploring the great outdoors.

Articles by

Related Articles

Investor Survey

IU Masterplan
Popular Posts