The cost effects of entering into the industry, as a major firm, seem to be too great making it illogical for this to happen.
A controversial statement by the then Nestle CEO suggested that water is not a human right, when they were questioned about their high value consumption of water in Africa.
For instance, larger companies do not have the same capital restrictions small firms do. However, these are associations which can be broken. Therefore the coffee industry needs to address young adults and change the drinking habits as they enter the working world and establish own households.
Factors in favor of an attractive industry 7. Increasing competition from health beverages and other beverages is a threat for the coffee industry as these goods can be easily substituted.
Factor affecting supplier power Nature of firms For brands like Nestle and Bru, the firm acts as its own supplier because they own the plantations from which they get coffee.