The Evolution of the Coffee Industry and How it Will Affect Starbucks

Coffee Industry
Name
Institutional Affiliation
Coffee Industry
The journey of exploring the coffee industry commences with an understanding of its origin and history. Similar to the discovery of any other commodity, there are many tales and folklores as to how coffee came into existence. As it is the norm with newly discovered items, there were considerable levels of disinclination in accepting this extraneous beverage into traditional culture. Starbucks is the famous coffee retailer in the world, and it is indeed known that it has encountered some challenges too. Analysis of the evolution of the coffee industry is necessary as there have been continuous improvements in the tastes and preferences, production and processing.
Coffee was originally found in Ethiopia by a young man named Khadr, who was looking after his goats. One day he lost his goats and upon tracing them, they were chewing a peculiar plant. Khardi noticed that the goats seemed to be energized by the caffeine in that plant which was named as the coffee bean (Pratibha & Ashutosh, 2010). After carrying out a trial with himself, he realized some strange feelings of vitality he had never felt previously. Following this incredible discovery, coffee became a portion of the Ethiopian culture.
Years later, coffee had spread to other parts of the world and individuals began preparing it in diverse ways. Fat would be added to create it as a snack so as to use the caffeine to energize the society. Coffee would also be used for medical purposes, and medics would recommend it for paralysis, impotence and exhaustion (Nithin, 2008). The drink spread to America, specifically in Boston in 1689. Years later a company that sells coffee began in 1971 in Seattle (NESTOR, 2002). The company sold whole bean coffee to its customers. The many uses of coffee enabled the company to conduct its operations well and to an extent of attaining the break-even point.
In the sixteenth century, the production of coffee began by scorching coffee beans. Starbucks company was not left behind as far as this discovery was made, as they proceeded and bought a roaster to roast their coffee. Popularity and profitability levels were constantly on the rise for this firm despite the fact that the economy was unstable. The good prospects could be associated with their emphasis on quality as opposed to profits
. The Dutch were the first to travel to the colonial land for growing coffee; this act made them have significant control in the global coffee market. In the 19th century, there was a coffee disease called rust that affected the world's supply of coffee as it affected all coffee plantations (Alon, 2011). The outbreak of rust made the Starbuck company realize losses for three consecutive years, but the company's CEO was still hopeful about its future success.
The strange disease caused farmers to start growing tea, which later on suppressed coffee as a favorite drink. That notwithstanding, coffee is the resilient product after oil to be traded from the tropics. It is mainly produced in developing countries, making it a source of foreign exchange. As a result, it is the product that brings about economic development in those nations.
The price of coffee is subject to discussion because of its volatility and instability. To enumerate, the prices swayed significantly in the 90's, but they recovered and strengthened during the year 2006- 2007 (Jillian, 2010). Price fluctuation crisis have given the coffee industry credit restriction and lack of liquidity that hamper trade processes. Price instability has made it difficult for companies such as Starbucks to predict their profits in advance. As coffee beans are the primary inputs in coffee, producing variations in their prices affects profitability levels and market costs of the Starbucks Corporation. World’s value of coffee has been on the rise due to a shortage of supply and the increasing demand in many republics.
Another way the evolution of the coffee industry affected the Starbucks is that the change of peoples’ attitude concerning health. The event played a crucial role in determining the demand for the firm’s products. The apparent shift towards healthy eating among consumers could be a threat to the industry as buyers are more alert to obesity and weight linked...