Coffee Industry Analysis Based on Indicators: Evidence from Starbucks, Luckin and Nestle S.A.

Abstract

Coffee is a favorite beverage worldwide, and its unique ability to keep people awake and energized has dramatically increased the sales volume. Its high popularity has led to a considerable investment market. Therefore, whether the coffee industry is worth investing in and how to evaluate it has become one of the most critical research classes today. Based on previous investigations, most investment evaluations of the coffee industry have focused on companies in the same geographic area. However, there is a research gap in whether the international coffee industry is worth investing in. On this basis, this study will analyze whether the coffee industry is worth investing in by collecting data on stock prices and financial reports as well as calculate WACC values and compare them using the data. According to the analysis, the WACC values of all three companies selected are generally high, which means that the investment risk is high. It is indicated that the coffee industry is not worth investing in nowadays because of the high risk and high cost. These results shed light on guiding further exploration of how to do the right choice of investment in the coffee market.