Several companies have proven already that a key factor in the future will be the ability and willingness to cooperate with other market participants without losing control of the business. Besides the cooperation with other partners in the industry the coffee shop companies have to ensure that the quality of products and services as well as the cleanliness of the location are consistent and at the desired level from shop to shop including especially franchisees and licensees so that the consumers can build trust in the brand.
The barista is the personality and sole representative of the specialty coffee supply chain to the consumer. They not only can make drink suggestions or recommendations, but their skill can be the difference between an everyday latte and an amazing specialty coffee experience.
In addition to that companies in the coffee shop industry have to make sure that they can meet the increasing future demand. Per capita consumption of total volume is predicted to reach 2. Therefore the market participants should support their suppliers in providing differentiated, quality beans and focus on business strategies that try to prevent farmers from running into debt and poverty. However, shifting into the specialty segment is no panacea, since it is a rather small part of the overall market — only 7.
The trend of stricter regulations in the coffee industry started already, e. In addition to that, if these social movements gain more attention in the market, the companies could also benefit from the positive public relation associated with the social commitment and engagement. To sum it up, coffee shops have to target their customers effectively in terms of product portfolio, company image and atmosphere as well as advertising and coffee shop location while paying attention to the partners along the value chain and look out for beneficial cooperation within and between industries.
Consumers are expected to maintain increasing levels of coffee consumption between and Per capita consumption of total volume retail and foodservice is predicted to reach 2.
Growing demand for specialty coffee [65] : Consumption of specialty coffees has increased by 10 percent a year since the early s, compared with 2 percent for the overall market. If this trend continues, demand for them could conservatively be expected to grow by 5 percent annually—an additional 2. This is a very positive development as specialty coffee might be perceived less as a commodity. Furthermore sales are generally strong. Diversity of functions of coffee shops: Coffee shops have a great potential because they are different things to different people: place to buy a variety of coffee flavors, place to converse with friends, read a book or take a break from work.
Therefore coffee shops can address a variety of issues when promoting their outlets. Growth potential for companies by franchising and licensing: Franchising Coffee has become a popular low-risk alternative to setting up an independent store.
Furthermore specialty coffee is the fastest growing franchise segment in America. Rather low investment for independent coffee shops: Setting up a single and independent coffee shop, in contrast to franchising, a significant smaller amount of capital is needed which in turn leads to low entry barriers.
Besides that eating-and-drinking places are by nature extremely labor-intensive. Additionally coffee companies have to overcome the loyalty of the customer to local coffee shops and the increasing threat posed by sophisticated home brewing machines. More and more U. Increasing power of substitutes: Per capita consumption of coffee dropped to about 17 gallons in , down from 36 gallons in , while soft drink consumption grew from 23 to 55 gallons, over the same period - an increase of more than per cent.
Therefore the coffee industry needs to address young adults and change the drinking habits as they enter the working world and establish own households. Further risks of the industry: [77] Shortage in supply, or an increase in the price of coffee beans could adversely affect net sales; Risk of fluctuations in the cost, availability and quality of non-coffee raw ingredients; Risk of adverse public or medical opinions about the health effects of consuming certain products caffeine, sugar etc.
Trends in the coffee industry 2. Coffee Industry Partnerships 3. A closer look at Starbucks 4. Starbucks Gift Card 5. Caribou Coffee- menu extract 7. Coffee taste test, surveys etc. Additional information about franchising 9. Sustainable Coffee. The result was that the former one edged out Starbucks for the first time.
A reason might be the increased level of automatic machines and bagged coffee at Starbucks which leads to a loss in uniqueness. Additionally the franchisee benefits from the established brand name and business knowledge of the company.
Foremost is the high cost of entry. The top franchise opportunities require considerable investment on the front end, usually more of an investment than if the entrepreneur started a similar venture on his own.
The franchisee might also be required to buy supplies from the franchisor, including inventory, paperwork, software, computer systems, and anything else the franchisor decides that they should supply.
Organic, Shade and Fair trade coffees- collectively known as sustainable coffees — fill a market niche that is often rewarded with a premium price and can provide superior environmental, economic and social benefits to producers. The survey was based on a list of more than coffee related firms supplied by the Specialty Coffee Association of America and the Coffee Association of Canada. More than two-thirds of the specialty coffee industry believes that certification of sustainable coffees will be important to their business in the future.
Providing education and information will be critical factors in expanding these market niches. Canada imports nearly million pounds. Total U.
It is the only segment of the coffee industry that has shown consistent and notable growth3 and is the largest specialty coffee market in the world. The North American specialty market therefore represents one of the largest and most vibrant coffee markets in the world.
Its ability to develop strong new trends and influence global consumption is well documented. These reasons and its historic role as a market for many of the producing countries that are at the forefront of developing certifiably sustainable coffee production, make it the ideal target for the first large-scale industry survey of sustainable coffees.
There is considerable confusion about what the three terms Organic, Fair Trade and Shade actually mean. When asked how important each of the following 7 factors is in making sustainable coffee valuable to their business, the quality issue was confirmed as primary by Specialty quality or taste Opportunity for differentiation Customers are asking for it Better profit margins Personal beliefs about biodiversity or the environment Personal ethics about fair trade for the growers Nearly 9 out of 10 companies report that sustainable coffee sales either increased or remained the same last year.
Hardly any reported reduced sales. Most expect this positive trend to continue over the next two years. Wire, Aug. Chronicle, Nov. Cook, Tammy Halevy, and C. Resource: Mergent coffee industry, page 4, As analyzed by McKinsey the most alliance-intensive enterprises over all industries delivered average total returns to shareholders nearly four times larger than the rest.
Many farmers were forced to lower prices so that their sales could not cover the cost of production, beginning a cycle of poverty and debt. The regulations require an organic plan, correct use of land and a very strict, detailed record keeping.
Retailers have to change their labels and identify their certifier. The financial load per pound could be 2 to 4 cents up towards 17 cents for a small roaster. The organic rules went into full effect in Oct Customers will now have a higher level of confidence in knowing the product is organic.
The movement focuses in particular on exports from developing countries to developed countries. However, Fair-Trade labelled coffee still only represents 1. Scott is the Communications Coordinator at TouchBistro, where he examines and reports on the constantly evolving restaurant industry. TouchBistro is an all-in-one POS and restaurant management system that makes running a restaurant easier.
Generic filters Hidden label. Hidden label. The Coffee Nerd This coffee aficionado loves what you do — and maybe likes to talk to you about it while a line forms behind them.
Offer seasonal or weekly specials. Changing it up will give these guests new ways to flex their depth of knowledge with other coffee lovers. Host a seminar on how to properly brew and prepare different types of coffee. These aficionados want to soak up as much knowledge as possible. How to Connect with the Wifi Obsessed: Make some cute cards that list your wifi password, laminate them, and distribute on the tables around your venue.
Create a digital loyalty program that gives customers incentives to purchase — especially multiple times a day. Artists and freelancers live off their networks, and you may just know someone who can hire their services. Tell them about the deals. The Socially Conscious Hipster Similar to the Coffee Nerd, this person will not shut up about the type of bean they love but also insist on knowing where it comes from.
How to Be a Haven of Conscious Consumerism: Buy fair-trade beans from your vendor and post the story of your beans somewhere in your coffee shop. Eliminate single-use plastic straws and opt for recycled paper instead. Donate a portion of funds from a specific drink or food item to a charity or community project that aligns with your mission statement. Provide separate bins for litter, plastics, metals, paper, and organic waste, and include clear instructions on what to put where.
The Anxious Speed Demon You can feel the anxiety coming off of this customer. Have counter take orders in line with a mobile POS — or install self-serve kiosks that help keep your lines moving without the small talk.
The First-Daters A coffee shop is the perfect setting for a first date — a familiar and sometimes quiet space to get to know someone. Provide comfy seating in addition to your tables — maybe even a few throw pillows. Use atmospheric lighting, edison bulbs, lamps. Keep the music light and low, providing some background noise to fill in those inevitable awkward silences but not so much that it drowns out the magic.
Be sure to leave them be, so they can focus on each other. The Chit-Chatter Community center by day, coffee shop by night. How to Stimulate the Conversation: Use your coffee shop POS to design a restaurant floor plan that accommodates large groups while giving privacy to smaller tables. Similar to a bartender being a draw to their customers in a bar, coffee shop owners can be a draw unto themselves in a coffee shop.
If a customer experiences quality service at a coffee shop, they will also be more likely to bring their friends, family members, co-workers, and other associates to visit. This may be a friendly sit-down chat just for fun or could even be a business meeting. Making your space one where people feel comfortable will only improve your sales as you establish yourself further. Employees can make or break a business. The way they serve their customers and their availability impacts how much revenue a shop will see.
The more people on a shift, the more smoothly the process will go. On average, 6 people are needed per day, and with most employees only working certain shifts, that gives the potential for 18 employees per shop.
Another thing to take into consideration, however, is the rate of turnover. They may also be more likely to move on if they do not feel valued in their workspace. Having a higher rate of turnover means more money spent on training and more time spent on searching for the right candidate.
On the other hand, those employees who enjoy the work they do or find it challenging and rewarding will be more likely to stay. Satisfied workers may even be the perfect leads for additional high-quality employees in the future, should someone ever move on from your coffee shop.
Employee retention means less money spent on training and more money for owners to both take home and re-invest into their coffee shop. Additionally, those coffee shops with fewer locations will have less employees than those with multiple.
National chains like Starbucks will have many more employees to work with than a local coffee shop. As of the date that this article was written, Starbucks has supplied over , people with jobs throughout the world, with , of them being employed in the United States. With many of our stores seeing mobile pay implemented, services like Apple Pay or Samsung Pay are becoming more popular methods of payment in the checkout line.
Another prominent technology option is online ordering. These establishments leave orders for pickup on a shelf in each of their locations, making it extremely easy for customers to stop in and grab their order. Credit cards offer a layer of security that debit cards and cash simply do not. This safety feature makes credit cards increasingly popular to use with everyday purchases. By simply existing as an establishment that serves food and beverages, you are providing credit card users with additional cash back opportunities.
The wisest step you can take in embracing this added perk is to actually accept the credit cards that they will need to use to reap these benefits. If a coffee shop only offers a smaller selection of coffee, their sales will suffer.
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