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Conspicuous (Coffee) Consumption

May 1, 2010 • Businesses, Developing Economies, Economic Thinkers • 165 Views    No Comments

How can you show your friends that you have ascended to your country’s middle class? Starbucks.

A recent BusinessWeek article on the world’s most caffeinated countries cited a connection between an emerging middle class and coffee consumption. With the demand for instant coffee increasing in Turkey, Belarus, and Ukraine, analysts see Starbucks growing there also. Correspondingly, Brazil, Russia, India, and China (BRIC countries), have accelerated their espresso machine orders.

The list of the most caffeinated countries is topped by Finland (608.2 liters per capita), Norway, and Denmark. The U.S. is #16 with per capita consumption of 105.9 liters annually. Coffee researchers say that the U.S. is relatively low on the list because we put so much milk in our coffee. 

The Economic Life

In The Theory of the Leisure Class (1889), economist Thorstein Veblen introduced us to “conspicuous consumption”. Referring to society’s more affluent, he said that buying behavior relates more to displaying power and prestige than need. Perhaps having read Veblen, Starbucks founder and CEO, Howard Schultz, perceives the potential for expansion in China as a “major opportunity” for new growth.

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