Article Analysis for ECO/365 Essay
Article Analysis Paper
According to the National Coffee Drinking Trends market research study, 83% of the U.S - Article Analysis for ECO/365 Essay introduction. adult population now drinks coffee (National Coffee Association USA, 2013). Coffee is now a $30 billion-a-year national industry (“Coffee Grinds Fuel for the Nation,” 2013). This paper will address the analysis for the basis for the trends in consumption patterns of coffee. What is the utility derived from coffee?
The utility derived from the product coffee is one that seems to be satisfying a large majority of consumers. Since 2012 coffee assumption has increased 5% showing that more Americans are consuming coffee (National Coffee Association USA, 2013). Daily consumption is very strong and seems to remain steady at 63% and those that consume it at least once a week has slightly increased to 75% (Prepared Food Network, 2013). Market and Equilibrium
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Traditional coffee has dropped in its consumption now at 49% from 56% in 2012 as gourmet coffee has become more desired posting in strong numbers in recent studies (Prepared Food Networks, 2013). In 2012, gourmet coffee consumption moved from 37% to 46% (Vending Marketwatch.com, 2013). Overall, there is an average of three cups a day per person or a 587 million cups (“Coffee Grinds Fuel for the Nation,”2013). Coffee has become an important part of America’s daily need just as much as other necessities. Coffee has become such a demand for many Americans that home-brewing gadgets have become more popular. The world is purchasing cheaper coffee blends (“Coffee Demands Shift Down-Market,” 2013). More Americans are bringing the coffee shop experience home with them. This year alone, the single-cup segment has increased to 12% (National Coffee Association USA, 2013).
According to the National Coffee Drinking Trends show that the U.S. population now drinks single-cup formats at 13% compared to 4% in 2010 while drip coffee maker use has dropped to 37% from 43% during the same times (Prepared Food Networks, 2013). A Chicago-based market research firm reported that the market for single-cup coffee has exploded from $103 million in sales during the year 2007 to $11.8 billion in 2012 (“Coffee Grinds Fuel for the Nation,” 2013). Now more and more single-cup brewers are becoming a desired necessity for many American homes along with their prices being more affordable. Although the consumption of coffee has been on the rise, it has begun to fall in the younger age brackets. The daily consumption for the aged group of 18-24 has fallen from 50% in 2012 to 41% in 2013 and the aged 25-39 has fallen to 59% from 63% (Prepared Foods Network, 2013). Conversely, the daily consumption among those aged 60 and older rose to 76% from 71% from 2012 (Prepared Foods Network, 2013). Inelastic or Elastic?
Our text explains price elasticity of demand and supply as telling exactly how quantity responds to a change in price and that demand or supply is elastic if the percentage change in quantity is greater than the percentage change in price and conversely different if inelastic (Colander, 2010). In my opinion, the demand for coffee would be inelastic. The reason that choice is made is due to the variety of coffee selections that are made available to Americans. If the price of one kind of favorable coffee is increased, there are several other substitutions that are available that will keep coffee high on the daily “must have” list. There are so many options available to the consumer to replicate their own coffee shop experiences at home.
American’s interest in coffee makers has been steadily on the rise and more and more Americans are bringing the coffee shop experience home which helps significantly in cutting the high costs spent at well known and unknown coffee shops (“Coffee Grinds Fuel for the Nation,” 2013). On the contrary, with new research and studies conducted, coffee is beginning to be recognized as being “healthy,” lowering risks of diseases, and increases chances of outliving those who don’t consume it on a daily basis have all said to drive coffee sales upward (“Coffee Grinds Fuel for the Nation,” 2013). There will continue to be many more innovations to provide Americans the opportunity to satisfy their daily caffeine consumptions and find more reasons to enjoy a beverage that has been in existence for hundreds of years. Despite the changes that occur daily in the drinking habits of many Americans, the consumption of coffee is expected to continue to rise along with crave for caffeine is sure to continue to exist forever amongst many Americans. References
Coffee Demands Shifts Down-Market. (2013, February). The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424127887324906004578290081981687700.html Coffee Grinds Fuel for the Nation. (2013, April). USA Today, (). Retrieved from http://www.usatoday.com/story/money/business/2013/04/09/coffee-mania/2069335/ Colander, D. C. (2010).Economics (8th Ed.). New York, NY: McGraw-Hill. National Coffee Association USA. (2013). Retrieved from http://www.ncausa.org/i4a/pages/index.cfm?pageid=731 Prepared Foods Network. (2013). Retrieved from http://www.preparedfoods.com/articles/print/112495-coffee-consumption-habits Vending MarketWatch.com. (2013). Retrieved from http://www.vendingmarketwatch.com/news/10746381/us-coffee-consumption-continues-to-rise-single-cup-use-grows