Last week, the U.S. government's Dietary Guidelines for Americans came out -- and for the first time, addressed the health issues of coffee. The report stated that drinking a moderate amount of java is not associated with risks for major diseases. In fact, doing so can even be part of a healthy lifestyle.
In this video segment, Chris Hill and Bill Mann talk about the implications of this for investors, and how certain coffee chains like Starbucks (SBUX -1.17%) might face disruption in the coming decades.
A full transcript follows the video.
This podcast was recorded on Jan. 13, 2016.
Chris Hill: The U.S. government's Dietary Guidelines for Americans were released last week. They are updated every five years. And for the first time ever, Uncle Sam weighed in on coffee. And let me quote directly here from the report: "Drinking up to five cups of coffee a day can be part of a healthy lifestyle." The report goes on to say: "Strong and consistent evidence goes to shows that consumption of coffee within the moderate range is not associated with increased risk of..."
Bill Mann: Five cups is the moderate range! That might be my favorite part.
Hill: Yeah, this is the best news I've heard all year, and probably will be all year. "...is not associated with increased risk of major chronic diseases." It goes on to say that consuming as much as five cups a day was associated with health benefits such as reduced risk of heart disease and type II diabetes.
Mann: And improved general awesomeness. By the way, it did say part of a healthy diet. Drinking five cups of coffee is not the entirety of a healthy lifestyle.
Hill: To mix metaphors, it's not the silver bullet. It's not, "It doesn't matter what else I'm doing. I'm not exercising, I'm eating pizza every night, but I'm drinking five cups of coffee, so I'm fine." It's part of a healthy lifestyle. Now, besides what wonderful things this means...
Mann: We knew this was true, right?
Hill: You, me, Bill Barker. And beyond the fact that we now get to hold this over the heads of at least one of our colleagues, who...
Mann: ... is wrong.
Hill: ... is on some internal anti-coffee kick here at The Motley Fool. I have to say, once I got over my initial giddiness about this report, I started to do what I learned from you many years ago, which is read the news like an investor. And when I read this report, I thought to myself, "Wait a minute -- this is the first time this has ever happened." We talk about, what does it mean for investors that people are living longer, and where do we want to invest. You hear all the time about the healthcare industry, and pharmaceuticals, and that kind of thing. Hey, if people are living longer than ever, aren't they going to be drinking more coffee? Doesn't this just mean we're going to be drinking a lot more? The ceiling on how much coffee we're going to drink in our lifetime just went up.
Mann: That's right. I also -- and you'd think I would know this -- would like to know who makes Ambien, because something is going to have to counteract the amount of caffeine that people now are recommended to be consuming in the form of coffee. Which may not bother you or me.
Hill: But some people, it does.
Mann: Anything that has late-night implications, that's a strong buy in my book at this point. Taco Bell, part of a healthy lifestyle.
Hill: But this only adds to my conviction that, if I get to hold a stock for 40, 50 years, I don't get to touch it, it's going to be Starbucks, or some other coffee stock. Maybe Dunkin' Brands. But it's really hard to see coffee getting disrupted in the way that, say, the automobile industry is on the verge of being disrupted.
Mann: Yeah, the only reason I would push back is, if you look at -- and Starbucks, I think, makes a good cup of coffee. I think we got an email a while ago -- was it from the Tampa Coffee Club -- saying "Please stop drinking crap coffee."
Mann: I happen to think that Starbucks makes a decent cup of coffee. I think there's a lot better coffees out there, but it's pretty good. I would be worried that Starbucks could be disrupted by artisan coffee is becoming a thing, in the way that craft beers have.
Hill: I was just going to say, in the way we're seeing in the beer industry.
Mann: Yeah, and in fast food. I think McDonald's is now no longer anywhere close to being, because there are really awesome alternatives. That said, it's pretty exciting to me, and I think that coffee -- excuse me... I'm just going to start calling Starbucks "coffee" -- that Starbucks ought to be pretty excited by this news.