Starbucks, Nestle Set To Grow As Small Coffee Brands Reel

From: bnnbloomberg.ca

Starbucks Corp. and Nestle SA, the maker of Nescafe and Nespresso coffee, could see their brands grab a bigger share of the market as the virus lockdowns end, limiting consumer choices.

Futures prices for arabica coffee, the kind used by Starbucks, have fallen 26 per cent in New York this year. The drop comes as the pandemic has curbed demand at coffee shops, restaurants and offices, and as global supply has surged.

Bigger coffee makers like Nestle and Starbucks have more capacity to survive the closures than smaller, specialty producers, according to James Watson, a senior beverage analyst for Rabobank International. The result: “We may see a lot of coffee-shop closures, creating a bit of a vacuum” when communities open up, Watson said.

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