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Introduction to Starbucks and its strategy
Introduction to Starbucks and its strategy
Impact of globalisation on the coffee industry
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Coffee Crafters manufactures fluid bed coffee roasters using a patent pending chaff extraction system that allows for low temperature venting and easy installation. Mission: to manufacture the world's best coffee roaster in its class. The global coffee industry generates combined revenue of close to $10 billion a year. Approximately 25 million people depend on the coffee industry worldwide for their livelihood. The coffee industry is very concentrated at the top and fragmented at the bottom with the top 50 companies taking up to 70% of the sales. However, this trend is shifting due to the growing popularity of independent coffee shops. Starbucks leads the way with over 20,891 stores worldwide; and Caribou Coffee is a distant second, with nearly 500 corporate owned stores and over 100 franchised outlets (source: PBS - Kelly Whalen - “Your Coffee Dollar”). The general coffee industry is well developed and very competitive. A coffee store operator will face competition not only from other coffee shops but also gas stations, quick service and fast food restaurants, convenience stores, donut shops, gourmet food stores, and in-home gourmet espresso and coffee makers. Moreover, coffee as a drink is facing a strong competition in the US against the energy drinks as an alternative source of caffeine. The National Coffee Association of U.S.A.’s 2013 National Coffee Drinking Trends market-research survey indicates (source: National Coffee Association): ● Coffee Consumption jumps by 5%; ● 83% of Americans Say They Drink Coffee on a Past Year Basis; ● Hispanic-Americans consume Espresso-based Beverages at twice the rate of other groups on a Past Day Basis; ● Single-cup segment builds on growth, ownership of single-cup brewers increases to... ... middle of paper ... ...of use and balanced result in the cup. ● Coffee subscriptions - tailored coffee deliveries of artisan blends delivered directly to your doorsteps. Typical cost structure, margins, etc. Growers - 10-12% Traders - 2-3% Shippers - 4% Roasters receive 65 cents to 70 cents of every dollar spent on coffee in the United States. Nestle, Philip Morris, Procter & Gamble, and Sara Lee account for more than 60 percent of US coffee sales and 40 percent worldwide. Exact information on the profit margins of the Big Four is not available to the public. But experts estimate that their profit margins are up to 25 percent of the retail price of coffee - a higher margin than on most other food and beverage lines. In recent years, mega roasters have increasingly turned to the cheaper robusta coffee in their blends. Retailers - 10-15% (Source: PBS - Kelly Whalen - “Your Coffee Dollar”)
In this part we will show the coffee chain industry conditions in Canada, and analyze the coffee market structure to compare the several largest coffee chains, then analyze some significant data to check Tim Hortons’ operation situation.
The most important part of the cup of coffee, the coffee beans, is typically harvested from South America, mainly because of the fact that Starbucks uses Arabica beans (Weinberg 1), which is dependent on a temperate climate that exists on the majority of the continent. The country that provides the biggest market supply of coffee beans for Starbucks is Brazil ...
Green Mountain Coffee Roasters initially got started in 1981 as a small café in Waitsfield Vermont and united with Keurig later in 2006. The company produces specialty coffee as well as coffee makers with the help of Keurig whom produces single-cup coffee and tea makers; it is now among their product list. The company roasts 100% Arabica type of coffee transforming it into more than a hundred different coffee products available for selection. Green Mountain Coffee Roasters and Keurig coffee no longer retains ownership of the original café. However, the company still has its headquarters situated in Waitsfield Vermont on a vase land of about 90,000 square feet. (8,400 square meters). The company also prides on having other regional centers which are located in various cities including: Upstate New York, Washington, Maine, Massachusetts and Connecticut. According to the case study, “Exhibit 6 shows the net sales and growth in reference to the year 2008, 2009 and 2010” (C36 in the book, [Dess et al, 2012]). From that data, we can see how the company has developed. The rest of the 2010 annual report also helps in examining the performance of the company which can be seen in Exhibits 3, 4 and 5.
According to the CAC’s newly released 2013 Canadian Coffee Drinking Study, coffee is a dominant beverage in the Canadian market. Only tap water enjoys equally high past-day penetration. The results of the research show that approximately two-thirds of adult Canadians (65%) consumed coffee in the past day. Approximately three-quarters of Canadians aged 18-79 (78%) indicate they’ve consumed coffee in the past week. (Coffee, 2013) Also, through the survey, coffee is the second most traded commodity in the world after oil. The children aged under 18 is usually supervised by their parents. They are not allowed to drink coffee every day. Thus, this report is written for the adults who drink coffee as their daily routine and help them understand how
"Researchers have attempted to find out how much caffeine people consume every day. It was estimated that in the United States, coffee drinkers drink an average of 2.6 cups per day. Total caffeine intake for coffee drinkers was 363.5 mg per day - this includes caffeine from coffee AND other sources like soft drinks, food and drugs. Non-coffee drinkers even get plenty of caffeine: former coffee drinkers get about 107 mg per day and people who have never had coffee get about 91 mg per day." (Schreiber et. Al) It is ironic that with such a large caffeine byproduct industry, ...
Nothing compares to that first cup of fresh brew in the morning. It is just the perk I, and many others, need to start my day off on the right foot. It is estimated that 2.25 billion cups of coffee are consumed on a daily basis on a global scale. Coffee is the second most legally traded commodity in the world behind only one: oil. An understandable statistic due to the fact we go to war with other countries over oil. So this should give us some perspective on how important coffee really is to us Americans. It is safe to say coffee is the United States' number one choice of morning beverage. As of 2013, there were 10,858 Dunkin Donuts retail stores in the nation. But what many people do not know is that coffee actually shaped the lifestyle of our thirteen colonies dating back to the 16th century.
In the United States, coffee is the second largest import (Roosevelt, 2004). Furthermore, the United States, consumes one-fifth of all the worlds¡¦ coffee (Global Exchange, 2004). The present industry is expanding. It is estimated that North America¡¦s sector will reach saturation levels within 5 year (Datamonitor. n.d.). According to National Coffee Association (NCA), 8 out of 10 Americans consume coffee. In addition, it is estimated that half of the American population drinks coffee daily. The international market remains highly competitive. It is estimated that 3,300 cups of coffee are consumed every second of the day worldwide (Ecomall, n.d.). The latest trends included dual drinkers, an increase in senior citizens...
A study done by Gallup in July of 2012, coffee has become more prevalent than soda among adults, and is particularly dominant with whites, middle-aged, and older adults, while nonwhites and younger adults be apt to consume more soda than coffee. Men and women are about similarly likely to drink coffee, nevertheless,
An article in the Seattle Post, describes the alliance that Starbucks is making to ensure that a sustainable supply of high quality of coffee is produce in Latin America. "Starbucks President and CEO Orin Smith said the alliance is partly his company's effort to pass on the "high price" of a cup of coffee to farmers." (Lee, 2004). He states that the high price enables them to pay the highest price to the farmers. Though the high prices to suppliers can demonstrate that money get to farmers with being diverted. Starbucks overall goal with this alliance is to buy 60 percent of its coffee under the standards agreed upon by 2007. "The agreement reflects the growing power of the premium coffee market and efforts to exploit it for the benefit of small farmers" (Lee, 2004).
Observation: While observing people in coffee shops, I discovered that numerous requested decaffeinated which, frequently was unavailable, stale, or cold. While observing I noticed, most of coffee drinkers who wanted to decrease on caffeine stated, I’ll just drink decaffeinated as an alternative.
Waking up, filling up the coffee pot with water, pouring the coffee into the insertion, waiting and smelling the exhilarating aroma drip down as you patiently wait for your morning pick me up. Coffee has become an essential part of the American culture. It is the simplistic beverage of an American office, the caffeinated rush among college students and the binding mechanism for a social gathering. The ever-growing industry of coffee has broaden its horizons expanding its flavors worldwide, with many cultures now brewing their first cup to start their morning.
Ferdman, A. Roberto. (2015, Feb. 21). It’s official: Americans should drink more coffee. The Washington Post.
Starbucks is an international coffee house and it was created in 1971 when they opened the first store in Seattle, Newcastle. Currently, they own 21,000 stores in 65 different countries of the world, and their passion for the great coffee, excellent service and community interaction exceeds cultures and languages (Starbucks, 2014). This company is the number 1 brand coffeehouse chain in the world due to the best roaster, marketer and seller of speciality coffee. Its main slogan: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Jurevicius, 2013).
Why is coffee culture so popular among students in America? Frappuccinos, Mochachinos, Cappuccinos, Espresso, and Cafe au Lait are all the rage these days. Instagram filters in Valencia display artisanal lattes with roses etched in the tawny foam to a chorus of rapid “likes.” Coffee culture has now entered the college zeitgeist now more than ever, with 26% claiming that they are “Moderate- Heavy drinkers.” But why? Coffee has never been so embraced and romanticized among American youth, in fact before 2010, the most popular drink among college students and teenagers was indeed soda.
Coffee is not only one of the most popular drinks in the world but one of the world major exports commodities. The Coffea plant is native to subtropical Africa and islands in southern Asia, where it was then then exported to other countries to cultivate. Coffee originated from Ethiopia, where it was first cultivated, and Yemen, where we get the earliest drinking of coffee. Today coffee beans are mainly produced in developing countries and in areas like South and Central America, the Caribbean, Africa, Asia and in Latin America, where Brazil is the world’s leading producer and exporter of green coffee and instant coffee. The American obsession with coffee has made United States one of the most coffee dependent countries on Earth; in fact the