Down under espresso, blue ocean case study?

by Chee Leng
(Singapore)

Koala in cappuccino

I was reading an article by David Dale on Brisbane times about espresso, how Italian Coffee transformed Australia when "Blue Ocean Strategy" pop into my mind.

No, David Dale did not write on business strategy, but on how the Italian Coffee transformed Australia, and make it an more interesting place.

It has to be, with so many latte art experts and so many interesting cafes and coffee joints. In fact, they even have a column that chronicled the spread of espresso machine throughout the Australia's cities!

With so much focus on espresso, one would thought that espresso started many years ago in this country. The fact is, espresso only start to gain popularity in 1950's.

Prior to that, Aussie are really more into tea.

But, the fact is coffee actually began in Australia in 1850's with the french cafetiere but it was big with many people drinking it.

Strangely enough, it die down in the early 20th century, until the 1950's then it began to pick up again.

Source: Brisbane Times, David Dale

My thoughts on the blue ocean part

Now, supposed you are observing the coffee industry in the early 20th century, you would not advise anyone to go into the market because it is primarily a dead market.

Tea should be the industry to go into since so many people are drinking it. Of course, it is competitive and the risk is still there.

Now, think of the first coffee company that launch the first espresso machine in Lygon street, Melbourne in 1952 -it started a culture.

What do you think is the rewards for that company.

This I feel best highlight how coffee company should include in their business plan.

So many companies I work with wanted to be the next starbucks or Gloria Jeans, but it is not easy to beat the incumbent market leader.

Instead, they should look for a niche and expand on it.

In 1952, if that company would have focus on marketing tea, it would just be another company selling tea. And the fact is, it is still not easy.

But, because it chose to market a "dead market" product, it started a culture and I believe it should have reaped some financial rewards as well.

Theme is extremely important for a coffee shop to make it. Even in Singapore, there are thousands of coffee shops with a population of less than 5 million people.

In 2009 alone, out of the 600 coffee shops and restaurants that opened here, 500 plus close down within a year.

The competition is cut throat in F&B, to survive and make money, you need to look for that blue ocean.

And I think, more time should be spend looking for it, thinking where it is, then deciding if blue color is better or how many tables should we squeeze to maximize per square feet turnover!

My two cents