Our selection of top picks is based on the same criteria as our annual Stock Trading Platform Awards. This is updated yearly to reflect changes in the market.
"Best for" picks are those we've evaluated to be best for specific product features or categories – you can read our full methodology here. If we show a "Promoted" pick, it's been chosen from among our commercial partners and is based on factors that include special features or offers, and the commission we receive.
This isn't an exhaustive list of all the trading platforms out there. What's best for you depends on your own investing strategy, budget and financial goals.
Coffee is the second-most-traded commodity in the world after crude oil. Integrated into our daily routines, it’s a staple on countless street corners — and global demand has increased considerably in recent years. But it can be a complex, nuanced and volatile commodity. To maximize your returns, do your research on how and where it’s grown while understanding inherent investment risks associated with your daily bean.
Each of the three investment options available for this tangible commodity comes with risk, given you’re taking a bet as to how much coffee will sell for.
1. Buy coffee ETFs.
Exchange-traded funds (ETFs) are a type of investment made up of a collection of commodities, equities, bonds or currencies, allowing for diversification across an entire industry by tracking its overall success.
Commodity-based coffee ETFs operate with an arbitrage mechanism designed to allow investors to directly track the performance of the coffee market as a whole.
Only one ETF that is exclusively invested in coffee is currently available:
iPath Dow Jones-UBS Coffee Subindex Total Return ETN (JO), which tracks an index of futures contracts on the price of coffee.
Pros
Instant diversification across the coffee industry.
Investments come at a low price, with lower risk than stocks in a single company.
Single transaction adds an entire market to a portfolio.
Simple, low-maintenance way to invest.
Cons
The collection is decided for you, meaning you relinquish some of your control.
Though diverse, ETFs are not immune to volatility.
2. Buy shares in coffee companies.
Another option for investing in the coffee industry is purchasing stock in a company that sells or is involved in the production of this commodity, though coffee growers and importers are much more fragmented than some other commodities. Investing in more than one company is a safer option than putting all your eggs in one basket. Another way to reduce your risk is by buying stock in a company that sells coffee in addition to other products. In the case of coffee, the industry leaders for coffee sales include ubiquitous brands like:
Starbucks (SBUX)
Dunkin Brands (DNKN)
McDonald’s (MCD)
J.M. Smucker’s (SJM)
Nestle (NSRGY)
Kraft (KHC)
Procter & Gamble (PG)
Shares of stock are a simple way to access the market, because you can purchase them through an online broker or financial adviser.
Pros
Build and tailor your own portfolio.
Simple and accessible investing.
Cons
Unpredictable growing and manufacturing factors make for volatile stocks and prices.
Risk of losing your investment can be high.
3. Purchase coffee futures.
Futures are one of the most direct ways to trade a commodity, though they’re traded on different exchanges than stocks are, so you’ll need a brokerage account that supports futures trading and you’ll probably access a different part of your trading platform than you would with stocks or options. When you purchase a future, you buy a contract to purchase a commodity — in this case coffee — at a future date at a specified price. These contracts come with an expiration date.
Investing in coffee futures essentially means betting on what the coffee will sell for at a specific date and place. For instance, the Coffee C contract offers trades five times a year and covers bean deliveries from 19 countries. Each contract is for 37,000 pounds of coffee — not a small investment. Those who grow coffee beans or buy coffee beans can use futures to lock in prices, but futures can also be traded by investors and speculators.
Futures can be extremely volatile and are far riskier than other investment options. They also offer the greatest potential return if you get the timing and price movement right to see a profit on your investment.
Pros
Because of lot size, small price moves of as little as 1% can mean strong gains.
Investing is simple and accessible.
Cons
Futures are volatile — you can’t predict with certainty how prices will fluctuate.
Risk of losing your investment is high, as small moves against you can spell big losses.
Failure to exercise futures prior to expiration renders them worthless.
Compare these providers for access to coffee ETFs and more
1 - 4 of 4
What are the risks of investing in coffee?
The price of coffee fluctuates depending on a range of factors, many of which are out of our control, resulting in a volatile and unpredictable commodity:
Weather conditions in the countries producing the coffee.
Economic and political factors affecting coffee-producing countries.
Fluctuations in foreign currency exchange rates.
Changing trade regulations and restrictions.
Changes in the supply and demand of coffee.
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
Bottom line
You can invest in coffee by purchasing coffee ETFs, stock in coffee companies or coffee futures. But the price of your daily bean can be unpredictable given growing and manufacturing variables.
Before purchasing this commodity, compare your investing options across trading platforms and other tangible goods.
Frequently asked questions
Brazil, Vietnam, Colombia, Indonesia and Ethiopia grow and export the most coffee.
Coffee beans are the seeds of the coffee plant. They are harvested, dried, roasted and ground before you can brew them into your familiar morning cup.
You must demonstrate at least $500,000 in liquid assets before you can open a franchised Starbucks store, according to investment experts.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.
Charlie Barton was a publisher at Finder. He specialised in banking and investments products, including banking apps, current accounts, share-dealing platforms and stocks and shares ISAs. Charlie has a first-class degree from the London School of Economics, and in his spare time enjoys long walks on the beach.
A failed SPAC deal pulled the plug on this vertical farming company’s plans to go public. But you can buy stock in other sustainable farming companies.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
