Coffee Companies Are Buzzing With Expansion

Updated

Dunkin' Brands (NAS: DNKN) has announced they will be opening a flagship store in India, its second storefront in the country. This announcement came months after the company discussed doubling the number of U.S. locations over the next two decades, according to CNN.

The new store is one of 80 to 100 planned in the country, tapping into a cafe market that is expected to grow from $190 million in annual sales to $680 million by March 2016. Coffee consumption in India is currently at 100 grams per person per year, while the U.S. sees 4.5 kilograms of coffee consumed per person annually. That suggests an abundance of room for growth.

Dunkin' Brands will have some competition in the growing market, though. Starbucks (NAS: SBUX) plans to open its first cafe in India in August, according to The Wall Street Journal. They plan to compete with Dunkin' Brands to take advantage of rapidly rising incomes in the Asia-Pacific region, though Dunkin' plans to fight back by opening over 300 stores each year in the region.


Business section: Investing ideas
With the growing market for coffee in the Asia-Pacific region, coffee companies will have to expand quickly to take advantage of it. Below is a list of coffee companies that have seen significant growth in the past year. Do you think they'll take advantage of the expanding market?

List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)

1. Starbucks: Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. The company has a market cap of $41.8 billion, most recent closing price at $55.71.

2. Dunkin' Brands: Operates and franchises quick-service restaurants worldwide. The company has a market cap of $3.87 billion, most recent closing price at $32.27.

3. Green Mountain Coffee Roasters (NAS: GMCR) : Engages in the specialty coffee and coffee maker business. The company has a market cap of $3.77 billion, most recent closing price at $25.60.

4. Peet's Coffee & Tea (NAS: PEET) : Operates as a specialty coffee roaster and marketer of fresh roasted whole bean coffee and tea in the United States. The company has a market cap of $837.44 million, most recent closing price at $63.24.

5. Caribou Coffee (NAS: CBOU) : Operates coffeehouses primarily in the United States. The company has a market cap of $253.5 million, most recent closing price at $12.0.

6. Coffee Holding Co.: Engages in manufacturing, roasting, packaging, marketing, and distributing roasted and blended coffees in the United States and Canada. The company has a market cap of $50.64 million, most recent closing price at $7.95.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


At the time thisarticle was published Kapitall's Danny Guttridge does not own shares of the companies mentioned above. The Motley Fool owns shares of Starbucks.Motley Fool newsletter serviceshave recommended buying shares of Starbucks and Green Mountain Coffee Roasters.Motley Fool newsletter serviceshave also recommended writing covered calls on Starbucks and creating a lurking gator position in Green Mountain Coffee Roasters. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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