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Minimum Wage:
Since employment levels in the coffee industry will recover in the short-term and experience minimal growth, the minimum wage will also recover slightly because of greater automation. Currently, the minimum wage for every worker in this industry is $12,589 and is expected to increase to $13,197 in the next five years. The automation of the food-preparation process is considered as the major factor for the long-term trend of declining wages.
Personal Income:
The coffee industry is characterized by low to medium industry revenue volatility because of significant growth in demand from higher-income households that continue to rely on quick snacks and beverages. Therefore, personal income plays a crucial role in determining consumer behavior and trends. The high-income households or individuals contribute to low to medium industry revenue volatility because these consumers are income-rich but time-poor.
Inflation:
Even though the coffee industry is an economic powerhouse and a crucial part of Americans' lifestyles, the financial performance of this industry is determined based on inflation-adjusted figures or terms. The projection of industry sales and profitability is based on these inflation-adjusted terms because of the impact of inflation on the economy (Porjes, 2011).
Exchange Rates, Tax Rates, and Interests Rates:
The profitability of the coffee industry is determined based on earnings prior...
Therefore, profits for these industry operators vary based on the size of the company, which implies that larger operators basically benefit from economies of scale. The current tax rates, interests' rates, and exchange rates are beneficial for the larger industry operators in light of the economies of scale as compared to small operators.
Stock Market Values:
Despite having a low to medium industry revenue volatility, the coffee industry stock market values are characterized by increased volatility. According to recent market statistics, the stock market values have decreased significantly during this period because coffee stocks have become expensive due to preference of high-priced premium coffee. This is despite of the steady increase of these values in 2010 after the global economic crisis as this industry recovered.
In conclusion, the coffee industry has experienced tremendous growth and profitability over the last decade. Actually the industry experienced a 6.6% revenue decline to $25.3 billion but resumed its upward growth with 3.0% and 3.1% in 2010 and 2011 respectively and is expected to continue growing in the next five years.
Bibliography:
Porjes, Susan. Coffee and Ready-to-Drink Coffee in the U.S.: The Market and Opportunities in Retail and Foodservice, 7th Edition. Packaged Facts, 2011.
Samadi, Nima. Coffee & Snack Shops in the U.S. IBISWorld Industry…
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