Coffee Industry in the UK
The coffee industry has grown rapidly since the 1990s; before Starbucks emerged, people were used to drinking low quality coffee from tins. Starbucks introduced fresh coffee made from top quality beans that have excellent taste and drinks such as the caffe latte and cappuccino, which have helped to fuel the development of the coffee market into a multi million pound industry. The size of UK branded coffee chains have quadrupled from 1999 to 2004, with a current market turnover of over £1 billion.
2 Market Forecasts
The coffee market is forecast for continued growth and expansion, without threat of saturation in the near future. In 2004 the coffee market was estimated at having around 2,299 outlet units and it 2006 it is predicted that the number of units will have increased to an estimated 2,965, with the growth of the branded coffee sector predicted to increase by 11% between 2004 and 2006. Indeed, branded chain outlets have accounted for most of the coffee market growth according to forecasts by industry analysts Allegra Strategies. Allegra claims that although there are more independents than branded coffee chains, in 2005 and 2006 it is expected that more branded than independent chains will be opening. Indeed, some independents. such as Bewley’s in London, have had to close down.
3 Macro - environment analysis of the market
Social
The coffee market must adapt to a change in consumer attitudes or else it may be threatened by health and lifestyle issues. In 2003 the hot drinks market declined by an estimated 2.3%. Consumers, especially young people, are becoming more health conscious which makes coffee a less attractive choice; the increasing number of alternatives available such as health and energy drinks are becoming competitors in the coffee industry. Research carried out by Mintel shows that there is an increased diversification of tea, with a trend towards premium and herbal teas. The coffee industry are responded to this change in attitude by provision of de-caf drinks, options such as soy milk, and alternative drinks such as freshly squeezed fruit juices, chai lattes and herbal teas.
People are now working harder than ever before but have more leisure time; they now use coffee shops to socialise. Allegra research claims that dwelling time in coffee shops has increased; 44.9% of consumers stay...
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www.dandad.org/inspiration/ creativityworks/pdf/authentic.pdf
UK coffee shop market statistics
14 Mar 2005, Caterer & Hotelkeeper magazine, http://www.caterer-online.com/archive/articledetail.asp?articleID=57531
Nestle Caterer & Hotelkeeper magazine, http://www.caterer-online.com/archive/articledetail.asp?articleID=50580
Branded coffee bars are squeezing independents
http://www.thehospitalitysite.com.au/article/44/OcO2db44.asp
2005 Allegra Strategies Ltd. No.1 Northumberland Av, Trafalgar Square. London, http://www.allegra.co.uk/project-cafe5-keyfindings.html
Oxfam to open coffee shops BB News May 2004
Http://news.bbc.co.uk/1/hi/magazine/3708585.stm
Starbuck’s success - More than just coffee ICFAI University Press http://www.icfaipress.org/304/AN-Starbuckway_72.asp
The Coffee Market ‘A Background Study’ Oxfam International Commodity Research
http://www.maketradefair.com/en/assets/english/BackgroundStudyCoffeeMarket.pdf .
The State of Sustainable Coffee Executive Summary http://www.ico.org/libser/executive%20summary.pdf .
Whitbread Briefing Book 2005 Volume 1 http://www.whitbread.co.uk/docs/Briefing_Book_2005_voll.pdf
When starbucks enter the Australian market in 2000, It was successful. Starbucks targeted the capital cities before going into regional centers. The reason is simple, as demand for pricey coffee is higher in the capital cities, and during that time less competition are expected. Starbucks became the leading and competitive company in the coffee chains globally. By 2007, Starbucks has opened more than 84 company-operated stores across the country. It was until mid 2008, that Starbucks realise its peak of success has ended in the Australian market.
Starbucks Financial Analysis Company Overview Starbucks is the world’s largest specialty coffee retailer, with more than 16,000 retail outlets in more than 35 countries. Starbucks owns more than 8,500 of its outlets, while licensees and franchisees operate more than 6,500 units worldwide, primarily in shopping centers and airports. The outlets offer coffee drinks and food items such as pastries and confections, as well as roasted beans, coffee accessories, teas and a line of compact discs. The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage products.
During those four decades, Starbucks had grown from a single location in Seattle, Washington, to a multibillion-dollar enterprise that operated more than 17,000 retail stores in fifty countries. Originally selling only coffee beans and ground coffee, it had added to its offerings prepared coffee, Italian-style espresso beverages, cold blended drinks,
CEO of Starbucks, Howard Schultz, originally had the idea that Starbucks would have the community/traditional feel in their stores, and still serve high-quality coffee (“Our Heritage” 1). Adding an Italian vibe to the coffee shops, keeping its traditional logo, which is based on a mythical creature, and advertising some of its products in a more “traditional” style accomplished the first goal. For an example, Starbucks recently created a commercial about their Refreshers, which was about cooling someone down in the summer time, with the scenery of Tuscany in the background. Serving high-quality coffee was obtained by ordering coffee beans from where they naturally grow and giving it a perfect roast to give to a customer. It was a marketing strategy that helped Starbucks grow and transform its commodity chain to support gathering more raw materials for a cheaper and more efficient way.
Coffee shop are seen as a social place. Yeah right, more like the ‘social media’ side of being social. There are so many effects that this can have on your brain, not to mention what has already happened to our brains.
The market for coffee and other beverages is also increasing in Sweden, as reported by Dairy Industries International (2001). This study measured the consumption of milk, and found that it had risen significantly over the previous few years. The study found that this was largely driven by consumption of coffee drinks, such as latte and cappuccino, and meant that milk drunk with coffee stood at 140 million litres per year in 2001, which is 10% of Sweden’s national milk consumption.
Picture this, the alarm goes off at 5 am, you have to get up for work or school but you are mentally and physically exhausted from not getting enough sleep. What could start your morning better than the smell and taste of a large cup of coffee? Come time of the age 18, the reliance on coffee is significantly high in getting through the day. Does the majority of society actually take the time to sit down and think exactly what they are drinking? Is this beverage that we consume actually as good as we make it out to be?
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...
Coffee market in Taiwan is also important. Since 1998, Starbucks enter the Taiwan coffee market, more people have adapted the habit of drinking coffee (De Pelsmacker, Driessen and Rayp, 2005). Taiwanese consumers have more opportunities to face different types of coffee options. Consumers usually have positive attitudes for ethically made products. Most of consumer would be willing to pay a higher price for fair trade coffee, but they care more about the brand, label, and taste of the coffee
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).
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
In the late 1980’s the standard coffee market was dropping in value due to people getting tired and bored of the standard cup of coffee. However the market for speciality coffees such as frappuccinos and other different new drinks were on the rise. Starbucks did some market research and found out that that 10% of the coffee market in 1989 was speciality based coffee, compared to the 3% in 1983. This then influenced them into bringing out their speciality coffees starting with the frappuccino that were first introduced in 1994 which have been a huge part of why they are as big as they are today.
Caf? Expresso, as the first mover in the coffeehouse marketplace, which has expanded quickly and become one of the ?big three? players in the global coffee shops chain. However, recently this company is continuously facing a lot of problems in terms of its staff, easy-copied business model and product range, resulting this company lost its leading position to the number three. Therefore, its adjusted visionary goal is ?return Caf? Expresso to the number one position in the marketplace? (Beardwell, 2010). To achieve this goal, Caf? Expresso identifies ?the coffee drinking experience? is significant to achieve competitive advantage and customer value-added, which was delivered through three key elements (graph 1),
The value of coffee is mainly symbolic — it serves as a liaison to my vocational and cultural community. People claim to drink coffee because it keeps them awake. That never works for me. If I am drowsy, caffeine makes me drowsy with a headache, at best. It has less consciousness-raising effect for me than does a breath of fresh air. The effect of this substance is not neurochemical; it is psychological. With each long swallow of a steaming brew, I savor the pungent, rich first flavor, the appealingly bitter aftertaste, and the feeling of knowing who and where I am.
Mauricio Font, a sociologist, depicts in his novel a detailed study of São Paulo’s coffee plantations in the 1920s, in an attempt to evaluate the impacts of coffee on Brazilian society. Part one, subsection 4, “Coffee and Industrialization,” was relevant to my research because this section of his novel is where he explicitly rejects previous scholar’s theories that coffee caused underdevelopment in Brazil. Instead, he agrees that “internal factors in São Paulo’s export system helped to form a dynamic process of social and economic diversification, which resulted in a more capitalist competitive market.” He cites how coffee estates were not fully capitalist programs early on, however, planters were able to establish contracts with immigrant