Business World

Theta Ridge Coffee

Recession Blues Or Not

If you believe, it will happen. Am I spouting blind optimism, nonsense or common sense? If the U.S. is in a recession, what will happen to the American tea and coffee industries? Coffee and tea products are still loss leaders in supermarkets, an unchanged and unfortunate situation, while the specialty tea market is reaching new highs.

Starbucks closed down 500 of their low profit-making shops and a media frenzy occurs. (Again, thank you Starbucks for keeping coffee in the news.) Walking through Pennsylvania Station in New York City we’ve seen a second Starbucks café open, just 1,000 feet away from the original Starbucks. Both have lines coming out the door between 9-10AM. (I come in at 9; senior editor comes in at 10.) Starbucks continues its dynamic expansion into China as the Asian market further embraces the café/tea bar concept. Mom & Pop coffee shops continue to open, the SCAA is seeing increased membership…these are signs of a healthy industry.

Some coffee shops have decreased prices - which are low enough to be competitive and to assure consumers they they’re trying to work on stretching their dollar. I listen to the financial analysts state we are not in a recession. I see prices going up, stagnant wages and politicians promising more “freebies.” (Wonder who is going to pay for promised freebies, but I digress!)

My point here is that we can fight this temporary slump in our economy. Post a new drink mixture - Economy Revival Green Tea, Cost Cutting Coffee. Coffee and tea are still perks in everyone’s lives; play with these times and stick it out. (Check out the Name Game on page 16).

One specialty tea packer is expanding, unable to keep up with demand even with new equipment being installed, and can no longer do private label. RTD iced tea manufacturers are lining up for bottling production time.

Yes, we do have a sluggish economy but we will prevail.

Jane McCabe
Editor & Co-Publisher


Tea & Coffee - August, 2008

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