The Rate Of Growth Of Coffee

The specialty coffee industry had seen steady growth for years and the trend was expected to continue until at least 2015. Of the various segments within the specialty coffee industry, most of the growth was attributable to beverage retailers “Coffee and kiosks”. In 1979 there were approximately 250 specialty coffee retailers. The number quadrupled by 1989 to approx 1000 outlets, and it exploded to roughly 15000 by 2002. Nationally, specialty coffee sales totaled over $ 10 billion in 2005.

Starbucks is dominant coffee brand in North America, which also is well-known worldwide. Established in 1971 as coffee shop oriented to a niche of coffee purists, in late 1980’s it turned to be a constantly growing chain of stores that sold whole-beans and premium-priced coffee to mostly affluent, well-educated customers. In years 1992-2002 company was showing at least 5% annual growth. And by 2002 Starbucks was serving already 20M customers in 5886 stores (both operated and licensed) around the globe, had $3.3 billion net revenues and was opening 3 new stores a day in average.

The first opportunity is that over 50% of eighteen year olds and older drink 3 or more cups of coffee per day in the United States. This group of coffee drinkers consists predominately of college students and career professionals who adding the morning cup of joe to their study time or work schedule. Currently in the coffee industry, competition is minimal for Starbucks, which has allowed Starbucks to capitalize on one of the biggest industries in the world behind crude oil. This

By 2003, the number of retail specialty coffee shops, cafes, kiosks, coffee carts, and roasters in the United States reached over 17,000, equating to nearly $9 billion in sales. According to the Specialty Coffee Association of America, 16 percent of adults in the United States drink coffee from one of these specialty outlets daily. (“Organo Gold”, 2008).

Portola Coffee Lab is looking to expand into multiple new markets in the Los Angeles and Orange County areas in the upcoming years. The coffee retail industry is growing rapidly in the past few years. Portola Coffee Lab is perceived by the customer as a high-quality coffee retailer in the Orange county area. Most of its locations are in a premium shopping center to attract their target market. Portola gained brand awareness in the southern part of Orange county area. However, there are still plenty of opportunities in this industry for Portola to grow.

I learned in doing research and talking with a few coffee shop owners that their total sales revenue is only 25% directly related to coffee sales. In particular, last week I interviewed the owner of Spring Valley Coffee in his shop. Below is an abbreviation of the interview. I was more enthusiastic to open my own coffee shop after our conversation.

The specialty coffee business is growing at a robust pace. During the last two decades, specialty coffee sales have grown every year despite economic obstacles such as war and recession. No coffeehouse chains have failed during this time, although the list of fatalities in other businesses is

Starbucks’ lead in the specialty coffee industry exemplifies the result of deftly executing a well-planned business strategy. Moreover, Starbucks is well positioned for what is expected to be a continuing rise in the popularity of specialty coffee products. The question before Starbucks’ leadership, however, is what avenues will lead to Starbucks’ goal of remaining true to its core, the highest quality coffee products while providing a “total coffee experience” for its customers?

As a well-established coffee retailer and over 35 years of success, Starbucks is at the maturity stage in the product life cycle. It is in this stage that Starbucks needs to shift gears and focus on marketing program modifications by increasing the number of customers and customer visits (Kotler, 2009, pg. 185). While improving service will attract first-time customers and retain current ones, further marketing modifications will need to be made if it wants to continue to grow. More advertising, distribution, sales promotions, and personal selling are a few of the ways to modify the marketing program.

2. 1. Industry Overview and Analysis: Dunkin ' Donuts is America 's most loved throughout the day, ordinary stop for espresso and prepared merchandise. Dunkin ' Donuts is a business sector pioneer in the hot customary/decaf/enhanced espresso, frosted espresso, doughnut, bagel and biscuit classes. Dunkin ' Donuts has earned the No. 1 positioning for client dedication in the espresso classification by Brand Keys for a long time running. The industry is now forecasted to grow over the next five years, with a billion revenues in the US. This growth would be mainly driven by an improving economy,increase in consumer confidence and expanding menu offerings within the industry. Dunkin’ Donuts dominates the industry with a market share of 36.7% and other competitors like McDonalds, Costa Coffee,

In general the coffeehouse industry in the United States was experiencing an increase in coffee consumption per capita due to the “Starbucks effect”. At this time Starbucks was operating approximately 20,000 stores in the United States and was living a fast expansion strategy worldwide.

The coffee-shop industry has a low barrier to entry due to low market share concentration, low initial outlays and medium regulation and is a steady trend (IbisWorld, 2017).

Starbucks provide a large in store seating with free wi fi and a take-out service which only a few retail shops offer. The main target customers for Starbucks are office workers, with enough income, whom are able to afford the high prices of their products (Gaudio, 2003). The company has worked hard to establish itself as the brand leader with its branding as the most frequently drank coffee and noticeable brand logo. Introduction of promotions like the Starbucks Card, allows a more convenient way for a person to
pay for
your
drinks
and
earn
rewards
for
your purchase (Starbucks Coffee Company, 2011).
Furthermore, in‐store
promotions
accompanied
by
new
products and
amenities like free internet use are all strategies that Starbucks use to maintain their position in the market (Vasudha, 2011).

The coffee industry is one of the world’s largest commodities, produced in over 70 countries and employing nearly 20 million people. The United States accounts for approximately 20,000 coffee shop businesses with revenues totaling $10 billion in 2011 and on an upward trend, according to the Small Business Development Center (SBDC). Industry analysis, conducted in 2012, found the coffee industry to be controlled by the top 50 companies, which account for 70% of the sales. The remaining 30% of

Coffee is an extremely popular beverage worldwide and has a market that is segmented into three categories: growers, roasters, and retailers. Aside from oil, coffee is the most popular item in the world. South America has been ranked as the #1 coffee producing region in the world. The top producer in that region is Brazil. 50% of people aged 18-24 in the U.S. would consider themselves to be coffee drinkers. Out of all American coffee drinkers the amount consumed is 1.96 cups of coffee per day, and 87% of these people typically drink their cup of coffee at home. Retail sales of coffee has amounted to $5.17 billion in the United States. 58% of people reported that they typically drink coffee because they need to wake up. “Coffee-related economic activity comprises approximately 1.6% of the total U.S. gross domestic product” and the coffee industry alone provides jobs for over 1.5 million people.