When it comes to investing, keying into the release of new products like Tesla vehicles or Apple’s iPhones can provide a jump in the growth of your portfolio. But a safer option is to choose solid investments in industries that have experienced sustained growth over decades. Put a little perk in your portfolio when you take advantage of the market’s hottest cups of java.
Top Coffee Stocks for 2023
The return to public spaces has put a strain on already-taxed coffee supply chains. Still, U.S. consumption is up to its highest level in two decades. Check out these seven best coffee stocks that can help diversify your portfolio.
- The J.M. Smucker Company
- Farmer Brothers Co.
- Luckin Coffee Inc.
- Restaurant Brands International Inc.
- Keurig Dr. Pepper Inc.
Coffee Stock Breakdown
|Coffee Stock||Market Cap||Type of Company|
|The J.M. Smucker Company (NYSE: SJM)||$15.49 billion||Coffee supplier|
|Nestlé (OTC: NSRGY)||$290.40 billion||Coffee supplier|
|Farmer Brothers Co (NASDAQ: FARM)||$88.79 million||Coffee supplier|
|Starbucks (NASDAQ: SBUX)||$116.57 billion||Café|
|Luckin Coffee Inc. (OTC: LKNCY)||$7.95 billion||Café|
|Restaurant Brands International Inc. (NYSE: QSR)||$19.66 billion||Café|
|Keurig Dr. Pepper Inc. (NASDAQ: KDP)||$48.09 billion||Brewing tech|
1. The JM Smucker Company (SJM)
To take advantage of investment opportunities in the coffee retail industry, investors can’t sleep on the J.M. Smucker Company, which distributes popular at-home coffee brands like Dunkin and Folgers. These staples make J.M. Smucker a standout in the at-home coffee industry. Both earnings and revenue are higher than a year ago, as is the share price.
2. Nestlé (NSRGY)
As the producer of much more than just coffee, Swiss powerhouse Nestlé maintains an excellent position in the market for consumer goods investors. In its most recent quarterly earnings report, Nestle announced a slight increase in Nespresso sales and organic growth.
3. Farmer Brothers Co. (FARM)
With over a hundred years in the coffee business, Farmer Brothers Co. is a good investment. Based out of Texas, Farmer Brothers Co. is unique in that it roasts and distributes its own coffee. Concerns arose several years ago over a transition from a family-run structure to a board, but positive post-pandemic growth had investors hopeful that Farmer Brothers Co. is back on track.
4. Starbucks (SBUX)
You see them on every corner. Boasting a resilient, popular café and product line that is unlikely to go anywhere soon — despite challenges stemming from pandemic lockdowns, inflation and labor issues — Starbucks is trading for bargain-basement prices following a steep decline on the Nasdaq. A strong anchor like Starbucks can build longevity into your portfolio.
5. Luckin Coffee Inc. (LKNCY)
This Chinese coffee company has been making waves over the last few years. The cashier-less company is even giving Starbucks a run for its money in mainland China. Luckin got a fresh start in the form of a Chapter 15 bankruptcy and completed its debt restructuring last April. The move was good news for investors. Up considerably since January of 2022, the stock has fared far better than U.S. coffee stocks in the market.
6. Restaurant Brands International Inc. (QSR)
Restaurant Brands International Inc., which operates Burger King and Popeyes Louisiana Kitchen as well as Tim Hortons donut and coffee restaurants, made impressive headway following pandemic shutdowns, thanks to smart leadership.
Although consumers could react to recession fears by scaling back discretionary purchases like fast food meals, some analysts say QSR is a bargain in light of Restaurant Brands International’s strong performance so far this year and its continued investment in its brands.
7. Keurig Dr. Pepper Inc. (KDP)
As a classic disruptor that changed the way people around the world brewed and consumed coffee, Keurig, formerly Keurig Green Mountain, was once a stock standout, only to drop dramatically in 2018. However, with millions of people stuck brewing coffee at home in 2020, and the company acquiring the soda brand Dr. Pepper, Keurig has been making a slow and steady recovery for the last couple of years.
A diversified product line that includes brewing machines and K-cups has ensured the health and stability of Keurig’s rise.
Types of Coffee Stock Companies
The coffee industry is a relatively stable industry, but even that is undergoing a shift. The industry experienced a boom in at-home brewing early in the COVID-19 pandemic. But as Americans return to work outside the home, they’re drinking more coffee throughout the day, and they’re drinking more of it away from home, according to the National Coffee Association, which means most growth is in cafés.
Here are three types of coffee companies:
- Coffee suppliers: Investing directly in coffee suppliers can lead to durable growth, since every corner of the coffee industry needs to source beans from suppliers.
- Cafés: Business at coffee shops and cafés is bouncing back nicely after the hit they took with mandatory closures in the early days of the COVID-19 pandemic. With innovation that permitted quick pivots to online and pick-up ordering systems, some cafés came out of the uncertainty stronger than ever and still have plenty of room to grow in the longer term.
- Brewing tech: A coffee bean is nothing without the materials to make the perfect cup, which is why you should consider investing in a coffee tech company.
Wake Up and Smell the Coffee Profits
Adding coffee stocks to your portfolio is a great way to capitalize on a consumer good people love to buy again and again.
Make sure to diversify across the coffee market, spreading your investment funds between suppliers, cafés and coffee technology in order to maximize your returns. Just as companies themselves often seek to integrate every aspect of the supply chain into their business model, so too can savvy investors profit from every stage of the coffee market.
When exploring coffee stocks, remember that many coffee companies like Keurig Dr. Pepper or Nestlé have a wider market than simply coffee products or soft drinks. Consider potential market fluctuations on their other products when projecting coffee performance, as any growth in the coffee sector may simply get eaten up by market contraction in another sector.
FAQHere are the answers to some common questions about coffee stocks.
- What are the best coffee stocks to buy?
- Here are seven of the best coffee stocks to buy:
- – The J.M. Smucker Company (SJM)
- – Nestlé (NSRGY)
- – Farmer Brothers Co (FARM)
- – Starbucks (SBUX)
- – Luckin (LKNCY)
- – Restaurant Brands International Inc. (QSR)
- – Keurig Dr. Pepper Inc. (KDP)
- Is it good to invest in coffee?
- Coffee can be a good investment – it may not be flashy, but it is consistent and an industry that has experienced sustained growth over decades.
- Where can I invest in coffee?
- You can invest in coffee in several ways: companies that are coffee suppliers, brew tech or cafés are all good places to start.
Information is accurate as of March 1, 2023.
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