As one of the most consumed beverages in the world, coffee stocks have become a go-to investment for investors seeking high returns. 

Originating in Africa, coffee has evolved through three distinct waves to become an integral part of our lives. Today, the dark liquid is consumed by over a billion people worldwide while fueling the expansion of artisanal blends and cafe culture. 

In other words, the demand for coffee isn’t going away anytime soon. Driven by the role of emerging markets in specialty coffee and the rise of coffee experiences, the global coffee market, currently worth $132.1 billion, is estimated to grow to $166.4 billion by 2029. That represents a compound annual growth rate of 4.72%.

As a result of these trends, competition in the industry remains intense, but a few companies have emerged as long-term winners. Investing in these stocks can prove to be a great investment to capitalize on the long-term gains.

On that note, here’s a look at three coffee stocks with the potential to brew up some serious returns. 

Keurig Dr Pepper (KDP)

Keurig Dr Pepper’s (NASDAQ:KDP) unique selling point is its highly diversified business. Formed by a merger between Keurig Green Mountain and Dr Pepper Snapple, the conglomerate holds a large stake in the consumer products market.

Its soda and juice businesses, like Snapple and Dr Pepper, cater to the essentials, while the Keurig coffee division drives its growth. 

The growth of the single-serve market served as a boon for Keurig’s K-Cups, which dominates the coffee pod market. In its efforts to maintain its market position, Keurig continues to innovate and expand its offering. The company recently announced the launch of K-Rounds, a sustainable model of coffee pods. 

The growth potential of KDP was fairly evident in its recent earnings report. The company reported earnings per share at 45 cents, in line with analyst estimates. Net sales for the period grew to $3.92 billion, up 3.5% from a year ago. This was largely fueled by its beverage division which reported a 3.3% rise in sales. 

Sales in its coffee division declined amidst inflationary pressure, however, K-Cup shipments remained steady. The company attributes the stability to an increasing need for at-home coffee options, which it plans to capitalize on.

Looking ahead, KDP aims to capture market share from leading cold brew brands like Starbucks (NASDAQ:SBUX) and Dunkin with its cold brew coffee pods. 

Keurig Dr Pepper’s highly diversified business and growth opportunities in its coffee segment make it one of the top coffee stocks in today’s market. 

Nestle S.A. (NSRGY)

The Swiss powerhouse Nestle (OTCMKTS:NSRGY) remains one of the top coffee stocks for its high-growth caffeine business. As a major player in the coffee market, the company owns several high-profile brands.

These include Blue Bottle, Coffeemate, Nespresso and Nescafe. Nestle’s diversity portfolio enables it to tap into various coffee segments, from the third-wave coffee culture to the single-serve market.

While Nestle’s presence extends across several consumer goods sectors, its coffee division remains a major driver of growth.

In July, the company reported earnings for the first half of 2024. Nestle saw a 2.1% rise in organic growth driven by its European and emerging markets.

By product category, the coffee division was its largest growth contributor led by its Nespresso, Nescafe and Starbucks at-home brands.

Looking ahead, the company expects a 3% increase in organic growth for the full year across all its product categories. 

With its extensive market presence and growing coffee business, NSRGY stands out as a strong pick to capitalize on the growth of the coffee industry.

Dutch Bros (BROS)

Looking beyond your mainstream coffee stocks, Dutch Bros (NYSE:BROS) is making waves in the coffee space. Its success is driven by a lineup of popular drinks like “The Golden Eagle” and excellent customer service.

These factors, coupled with its highly efficient drive-thru operations, have helped Dutch Bros play an integral role in shaping America’s coffee scene. Today, the company has 835 locations across 17 states. 

In its most recent quarter, BROS reported strong earnings but shares fell amidst soft guidance. Revenue grew 30% year-over-year, while earnings came in at $0.19 up from $0.13 last year.

The growth was fueled by the rollout of 36 new stores and a 4.1% uptick in same-store sales. Looking ahead, Dutch Bros expects revenue for the full year at $1.22 billion, which was slightly below analyst estimates of $1.23 billion. The slight miss on expectations sent shares tumbling despite an otherwise strong quarter. 

The dip in BROS stock presents a great buying opportunity for investors. Its slowdown in revenue growth is likely the result of the company reassessing its current pipeline while expanding its store footprint.

The company still remains in its growth phase. In the long haul, Dutch Bros’ potential to generate lucrative returns remains intact. 

On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.