Coffee shop business is big in US - US$13 Billion!

by Chee Leng
(Singapore)

If you are a coffee shop owner -congratulations. You are part of eco-system trying to earned USD$13 billion. Coffee shops business in US is big, even in downturn, companies are reaping huge profits.

But, it is not easy to make it.

First, you have to compete with the big boys. They come equipped with savvy marketing, strong financing, innovation (i.e. Starbucks Via) and of course lots and lots of distribution points.

In fact, in a survey done by First research , it is shown that 70% of this $13 billion are earned by the top 50 companies.

But, this might change -I would go on to that later.

As if competing with the big boys like Starbucks, Caribou or Coffee beans and Tea leafs is not enough. You still have to worry about convenience stores, petrol stations and even push carts that are also selling coffee.

All of the above focuses on one thing -location.

It was and I believe to many F&B retailers, location, location, location. After all, who would want to open in a place where the location is not good?

And the fact remains that if you are a one man operation, a small coffee joint, even if you want to hundreds of thousands paying rent for prime location, the landlord might not even want to allow you in.

This is because they might not think you can pull in the crowd: you are not the right tenant mix.

Something change during the last couple of years.

Starbucks has been closing down outlets, and has come out with a new concept known as Starbucks High street cafe. Then, it is also pushing out new products such as Via to be sold on other networks and distribution points.

In additition, we have read or know about stories on how a small cafe or outlet is gaining business using the new marketing media, i.e. twitter, facebook, linkedIn etc.

If we look at Keurig, they started selling online and gain popularity before they were sold everywhere. Or, what about the recent gogocoffee.com, all their business take place online and companies are dying to have their coffee sold on their website.

Many cafes and coffee shops are building their own facebook, twitter, websites and whatever platforms that they are comfortable with, and gaining business.

So, if you own a coffee shop, and want a slice of the $13 billion market share, you need to use the new marketing media.