The demand for coffee in the United States has been increasing. A new report suggests that millennials are to blame for the price hike of instant coffee, and the potential global coffee shortage.
Young adults reportedly make up an increasing number of java junkies in America. According to the data by the National Coffee Association in New York, the daily consumption of coffee among 18 to 24-year-olds rose from 34 percent to 48 percent between the years 2008 and 2016. Meanwhile, the rate of consumption between those aged 25 to 39 have rose from 51 percent to 60 percent, while the older generation (aged 60 years and up) decreased their coffee consumption to 64 percent from 76 percent.
Harish Sundaresh, a portfolio manager and commodities analyst, told Bloomberg that the demand for coffee has been running way above expectations. The Bloomberg Commodity Index ranked coffee as the fifth best return among the 22 raw materials included in the category. It may sound good for business, but the reality is that the high demand is tightening the coffee market.
Supplies for Robusta have become hard to find since a drought in Brazil, one of the largest coffee providers has hampered the crop. Now, most coffee shops have resorted to using Arabica beans to make instant coffee, which explains the price hike for that commodity.
The ravenous thirst for coffee among millenials is also deemed to have a cultural impact. Older Millennials born around the year 1982 started drinking coffee as young as 17.1 years old, while younger Millennials born after the year 1995 began at about 14.7 years old.