Individual Assignment 1-

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Apr 3, 2024

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1 Bizzy Coffee International Business Insight Laniyah Robinson Professor Carolina Forero IBA 350-920 March 3, 2024 Description of the company: Bizzy Coffee originated from two best friends, Alex French, and Andrew Healy. The two had been childhood friends over the years and had started many business ventures together. One of being a group fitness company, which the duo has had a passion for since their college days. During that time, they trained for the World Tuffest Mudder (WTM), a popular 24-hour endurance race. While training, Andrew and Alex still worked corporate jobs as well as the group fitness side business, but they needed something that could provide them stamina, the energy to manage their workload, and a healthy alternative, Bizzy coffee was born. Of course, there were many drink options on the market so why did they choose to create their own? Alex and Andrew wanted to create a convenient product for its customers that highlighted the highest quality, healthiest, and overall, most perfect cold brew worldwide. The duo began experimenting and researching the cold brew market to perfect their product and in May of 2015, they began brewing their coffee from their headquarters and manufacturing site in Minneapolis, Minnesota. As a team on a mission to create a product that positively impacted the world, including the sourcing of quality ingredients, sustainable production, and the creation of jobs to produce the finest, freshest, and healthiest coffee possible. Their manufacturing process has been designed and engineered to perfection. Many of their products include bottled ready-to-drink cold brew, brew bags, 2 oz Bizzy coffee shots, and Bizzy Merch. Bizzy jumped into this market

2 so they could scale and stop trading hours for dollars. Though cold brew coffee is still a growing market and has become more popular and larger over the years, brands like Bizzy continue to have a competitive advantage against competitors in the industry. In the local market, Bizzy’s competitive advantage over other companies included its ability to maintain its quality, convenience to customers, and overall mantra of constant improvement; adopt, evolve, repeat. Description of the industry: Bizzy’s main competitors in the cold brew industry included companies that were in a similar category as them, who sold cold brew ready-to-drink coffee through other or the same similar big retailers, like Amazon and Walmart. Chameleon Cold Brew, Grady's New Orleans Style Cold Brew, and Starbucks Cold Brew were the top competitors when Bizzy entered the market in 2015 and are still top competitors in the market today. The cold brew market was just beginning to develop, and many of the trends included increasing the popularity of instant coffee among millennials. In a recent podcast, Bizzy's CEO explained that Highschoolers today typically consume cold brew coffee for caffeine and energy purposes while older people drink it because of the low acidity of the drink, overall, these trends are what continue to expand the market and continue the trends associated with Cold brew coffee. Other trends of the cold brew coffee industry include the growing influence of online retailing and increasing the demand for organic and private labels. Bizzy jumped into the market considering the trends, the overall health of consumers and the economy when manufacturing the product, and the competitive rivalry. The threat of entry into the current local coffee market is high due to the number of hurdles for market entry being low, however, those hurdles for entering the market may also be eliminated. Low capital requirements, access to distribution channels, and trainable required skills are some hurdles when entering the current local market that can be considered with the constant growth

3 of the RTD (Ready-to-drink) coffee industry. Attracting new entrants and easing situations for upcoming brands like Bizzy Coffee continue to keep the threat of entrants into the local market high. There are several hot drinks substitutes available in the local market that keep the threat of substitutes high, Tea is a common substitute in the coffee industry and is often preferred by many over coffee. With other hot beverages interrupting the local coffee market, taking into consideration consumer costs, buyers' propensity, and availability of replacements all help upcoming brands like Bizzy Coffee to understand the market they are in and how they can use the considerable influence of current companies to drive their profits. The fact that there are too many coffee producers with no radical differentiation makes the bargaining power of buyers in the coffee sector very strong consumers. Customers do have loyalty to brands in the local market, but the loyalty between the brand and the consumer results in the switching behavior of the consumers in the coffee industry to be high with low or no switching costs. Some things to reflect on include:  Product differentiation  Threat of backward integration by buyers  Number of vendors that offer the product. As companies are strong and have many suppliers to choose from, the negotiating power of suppliers is low. Coffee Beans, the main ingredient of coffee, are produced by several companies. Brands like Bizzy can choose to buy from a variety of suppliers to have an advantage when it comes to negotiating with suppliers. Purchasing power from suppliers through large brands is typically accepted to generate economies of scale.

4 The market size of Cold Brew Coffee in 2021 was USD 401.5 million and is expected to increase from USD 492.64 million in 2022 to USD 3105.5 million by 2030, growing at a compound annual growth rate of 22.7% during the forecast period. The demand for coffee has been boosted by younger consumers, such as Millennials and Generation Z, who are more likely to be interested in new types of coffee or taste trends like cold brew coffee. Due to rising RTD coffee consumption and the increasing popularity of professionals who have a busy schedule, the market for cold brew coffee has been expanding. For example, Starbucks launched new cold brew pitcher coffee packs and other cold brewing products has significantly raised awareness among consumers, in turn accelerating the market. Description of the product/services: Bizzy Coffee produced signature organic blends of coffee including bottled cold brew that took an average of 18 hours to make, various blends of brew-it-yourself brew bags, and Bizzy Cold Brew merch. To find who their targeted consumers were Bizzy conducted a test using social media hashtags to screen what a typical customer looked like, then used the data to decide their “Brand champion”. Though, profiling the average customer of Bizzy was quite challenging and a constant learning journey, they discovered the Brand Champion was typically millennials who lived in major cities, loved to be outdoors, and most likely owned a dog. Shortly after the cold brew industry matured, 64% of people in the U.S. drank coffee. While catering to the needs of their brand champion as well as new potential consumers like high schoolers that drink coffee for energy and older groups that drink coffee due to low acidity. Bizzy concluded that to support the needs of every potential consumer, they must provide the best-quality convenient coffee on the market. Bizzy’s main marketing channels first consisted of collecting data through social media hashtags and developing the data. After profiling who their ideal customer was, they created

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