
Royal coffee trade trader jobs cut, $300M in cuts to be announced by October
The retail trade for coffee, tea, teabags and other specialty goods has been affected by the global recession, according to a trade association that represents the sector.
The Canadian Coffee Association of Canada said Tuesday that the trade group has been forced to cut a total of $300 million from its workforce, while it has also seen some of its top executives lose their jobs.
The trade group says it is working with its stakeholders to reduce the impact of the global economic downturn and will unveil further measures in the coming weeks.
Coffee is the second-largest consumer product in the U.S. behind chocolate and has overtaken meat as Canada’s top export, according in the latest World Economic Forum’s Global Trade Report released Tuesday.
Canada has lost more than half its coffee trade since the start of the recession, and the trade association said it expects that trend to continue.
The CAIC expects that by 2020, the trade in specialty coffee products will fall below $600 million, down from $1.3 billion a year ago, according the report.
Its members include big multinational companies like Coca-Cola Co., PepsiCo Inc., Kraft Heinz and Starbucks Corp.
It said the industry is also seeing the “end of days” for small coffee shops that have struggled financially, while they’re trying to maintain a viable business model.
While the trade union says its members will continue to be targeted by other trade groups, it’s expected that the biggest losses will be in retail coffee shops and coffee chains.
The association said its members expect that the impact on the sector will last a number of years and that its members are committed to working with trade groups to make it easier to recruit and retain qualified trade representatives.
Café chains will see a loss of about 1,200 jobs, with the most affected restaurants and coffee shops, according.
The loss of the retail trade will also have a “significant” impact on coffee-based food service companies like Starbucks and Dunkin Donuts, which together have about 5,000 employees, the association said.
While coffee sales in the country are booming, the industry faces a severe shortage of skilled coffee workers in Canada, which has one of the highest minimum wages in the world.
The sector is also facing increasing competition from cheaper foreign coffee exports, such as from China, and from more affordable Asian imports, such from Japan and South Korea.