How to invest in coffee

Find out how you can invest in one of the world's most traded commodities.

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

After crude oil, coffee is the second most traded commodity in the world. It’s integrated into our daily routines, is a staple on our high streets and global demand has increased considerably in recent years. Take a coffee break and read about why investors trade on this bitter commodity. Remember that coffee can be complex, nuanced and volatile so it’s important to do your research into how and where coffee is made and understand the risks.

3 ways to invest in coffee

There are three main ways to invest in coffee. Each method comes with a different level of risk, so it’s important to do your research and choose the method best suited to you before investing in the commodity.

1. Buy coffee ETFs

Exchange Traded Funds (ETFs) are a type on investment made up of a collection of commodities, equities, bonds, or currencies, allowing for diversification across an entire industry by tracking its overall success. Take a look at our ETF guide here.

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.

Currently, there are two Exchange Traded Funds available that are exclusively invested in coffee: iPath Dow Jones-UBS Coffee Subindex Total Return ETN (JO) and the iPath Pure Beta Coffee ETN (CAFE).


  • ETFs provide instant diversification across the coffee industry as a whole.
  • Investments come at a low price, with lower risk than stocks in a single company.
  • A single transaction adds an entire market to a portfolio.
  • A simple, low maintenance, way to invest.

  • 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 would be to purchase stock in a company who sell the commodity or who are involved in the production process. Industry leaders include Starbucks (SBUX), Dunkin’ Brands (DNKN), and J.M. Smucker’s (SJM). It can be a good idea to invest in more than one company which would be a safer option than having all your eggs in one basket.

A way to reduce your risk even further would be to purchase stock in a company that sells coffee in addition to other products, such as Nestle, Kraft or Procter and Gamble.

Stock shares are a simple way to access the market because they can be purchased with an online broker or financial advisor.


  • You can build and tailor your own portfolio.
  • Investing is simple and accessible.

  • Stocks are volatile, factors out of our control can impact prices, making them unpredictable.
  • The risk of losing your investment is higher.

3. Purchase coffee futures

Futures are one of the most direct ways to trade a commodity. When you purchase a future, you are buying a contract to purchase a commodity, in this case coffee, at a future date at a specified price.

Investing in coffee futures essentially means betting on what the coffee will sell for at a specific date and place. The Coffee C contract offers trades five times a year and covers coffee bean deliveries from 19 countries. Each contract is for 37,000 pounds of coffee, so not a small investment.

Futures can be extremely volatile and are far riskier than the other investment options. They also offer the greatest potential return, however, you have to get the timing and price movement right to see a profit on your investment.


  • Because of the lot size, small moves in the script, such as 1% can mean good gains.
  • Investing is simple and accessible.

  • Futures are volatile investments. No one can predict with any degree of certainty how the pice of coffee will fluctuate.
  • The risk of losing your investment is high, small moves against you can mean big losses.
  • Futures expire. Failure to exercise them prior to expiry makes them worthless.

What are the risks?

The price of coffee can fluctuate depending on a range of factors, many of which are out of our control, making the commodity volatile and unpredictable. These factors include:

  • Weather conditions in the countries producing the coffee.
  • Economic and political factors impacting coffee-producing countries.
  • Fluctuations in foreign currency exchange rates.
  • Changing trade regulations and restrictions.
  • Changes in the supply and demand of coffee.

Frequently asked questions

More guides on Finder

  • How to reserve a company name

    Discover how to reserve a company name and what this means for your business

  • Interactive Brokers review

    Find out what we thought of Interactive Brokers, some key features, information about its platforms and how much Interactive Brokers costs.

  • Invest in makeup stocks

    Want to add highlight to the foundations of your investment portfolio with makeup stocks? Find out how to invest in makeup and the risks.

  • How to buy penny stocks in the UK

    As the name suggests, penny stocks offer potential growth at a low cost, but are also high-risk.

  • How to buy Bitcoin

    Want to buy Bitcoin but don’t know where to start? This comprehensive guide provides step-by-step instructions on how and where to buy BTC in the UK.

  • A complete guide to buying, selling and investing in silver

    Find out your different investment options, the benefits of investing in silver and what the possible risks are.

  • Best pension drawdown

    Find out the best pension drawdown for different sized pension pots and different investing aims. We’ve compared the different providers.

  • Invest in the Toronto Stock Exchange

    Find out what the Toronto Stock Exchange is, what companies are on it and how you can buy shares on Canada’s largest exchange.

  • Best pension fund

    Looking for the best pension fund to invest your pension in? We’ve found some of the best ones by their compound annual growth rate.

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site