Coffee -it revitalizes the body and your POCKET!

by chee Leng (on coffee makers)
(Singapore)

Coffee is Recession Proof?

I think coffee revitalizes our body, it makes us more alert and generally feeling better. But, some of you might not realized that coffee revitalizes the pocket of many businessman that are in the coffee trade!

From US high unemployment to Europe debt crisis, the world economy is in a bad shape. Consumers are not spending, business is barely making enough.

It seems like gloom and doom for most businesses except coffee. Folks that have invested in coffee, most of them make money.

We all know the burger folks McDonalds, they opened Mc Cafe couple of years ago, and even as US experiences a stagnant economy, Mcdonald's is doing well with a profit gain of 15% -contributed greatly by its McCafe beverages sales.

Then, there is the Starbucks and SSP joint venture in Finland and Norway, it is doing so well that they are planning an expansion into more locations.

SSP does Airport and Travel locations business, and one would think that given the bad shape of Europe economy, traveling should be badly hit.

Nevertheless, business is booming and they are expanding.

Then, we all know that in this debt crisis, Italy was badly hit, so their consumption should go down right? Wrong.

They have actually imported more coffee (from India, according to Coffee Board of India), consumption actually goes up.

There are many other stories, such as the expansion plan of Dunkin Dounts and so on. Coffee business is booming despite the economy, or should I say regardless of any economy.

My $0.02.

There are a couple of reasons why coffee is recession proof:

1. It is a habit (probably closer to an addiction), and you just need to have them, so no matter how lean your pocket is, there is always that spare change for a cup of coffee.

2. It is life last and little luxury you can offer to yourself. You probably cannot afford travel, maybe no expensive purchase, but coffee is still something you can afford.

3. It is the marketing. Most of the outlets highlighted above are chains that spend millions on their marketing. Starbucks is especially known to embrace any media so long as it gets the message to their customers.

With strong message and perhaps a good "bait", it is not difficult to get consumers to start spending.

Therefore, coffee might be your best bet if you want to go into a business that is recession proof, but you need to have a good marketing plan in place to communicate your products to your targeted audience.