Quantfy the effect of average caffeine intake from coffee and caffeinated drinks on Western economies. Explain the data sources and methods you use to arrive at your conclusion.
According to a report by the National Coffee Association, consumers spent $74.2 billion on coffee in 2015 in the United States, and the coffee industry was responsible for 1,694,710 jobs and nearly $28 billion in taxes. The average caffeine intake from coffee was about 165 mg per day per person. For other caffeinated drinks, such as tea, soda and energy drinks, the caffeine content varies widely, but according to the Mayo Clinic, the average intake from these sources was about 51 mg per day per person. So, the total average caffeine intake from coffee and caffeinated drinks in the US was about 216 mg per day per person.

Caffeine is a stimulant that can enhance alertness, mood, cognitive performance and physical endurance. It can also block the effects of adenosine, a hormone that is responsible for deep sleep. These effects can have positive or negative consequences depending on the dose, timing and individual sensitivity. For example, moderate caffeine intake (up to 400 mg per day) can decrease the risk of several cancers, cardiovascular disease, type 2 diabetes and Parkinson’s disease. It can also improve work efficiency, learning ability and problem-solving skills. However, excessive caffeine intake (more than 400 mg per day) or consumption late in the day can cause insomnia, anxiety, irritability, headaches, dehydration and dependence. It can also impair memory consolidation, emotional regulation and creativity.

Some researchers have attempted to estimate the economic value of caffeine using different methods and assumptions. For instance, a study by Griffiths et al. used a simulation model to calculate the net benefit of caffeine consumption in the US workforce based on productivity gains and health care savings minus productivity losses and health care costs. They found that the net benefit was $74.4 billion per year. Another study by Pollan used a historical perspective to argue that caffeine consumption drove a kind of “Enlightenment thinking” that fostered innovation, rationality and economic growth in Western societies.
How would you rank the profitability of the coffee industry amongst other food industries?
According to CSIMarket, the coffee market is expected to grow at a CAGR of 4.28% from 2021 to 2026. The revenue of the coffee market worldwide is projected to reach $362.6 billion by 2022. The profit margin for coffee shops ranges between 2.5% and 8.79%, depending on whether they roast their own coffee or not. These numbers indicate that the coffee industry is more profitable than the food processing industry.

The gross profit margin for the food processing industry was 22.05% in 2019, which was considerably below the overall market average of 49.4%. The EBITDA margin for food processing was 9.56%, and the net profit margin was 5.16%. These figures suggest that the food processing industry is not very profitable compared to other sectors.

However, profitability may vary depending on the type of product, location, competition, and customer preferences. Some other food businesses that have high profit margins are honey production (30%), popcorn business (22%), custom cakes (19%), and pizza (15%).