Recession, depressing sales -tell that to coffee companies!

by chee Leng (on coffee makers)
(Singapore)

If you are still wondering about finding a business that is absolutely recession proof, coffee might be the answer.

we all know how bad the economic situation is, stock markets are down, unemployment is up, consumer confidence is at a all time low.

So, in theory, coffee sales should be sluggish but no!

A survey from Technomic found that more people are ordering coffee compared to 2 years ago from Quick Service Restaurants.

It comprises of outlets such as MacDonalds, Subway, Burger Kind etc.

And this is despite the fact that there are substantial price increase, on average a 10% hike as compared to 2008.

Even in non-traditional coffee places such as Target shopping mall, they too report an increase in sales for their coffee products.

My S$0.02.

QSR (Quick Service Restaurants)

It could be due to the fact that they are launching or re-launching so many of their coffee products.

Mc Cafe came out with many waves of promotions and recently so did Dunkin Donuts, thus the increase in uptake could be due to this factor.

The overall survey take in gross uplift, and it definitely includes period where the promotion is being held.

But, this also speaks of the potential of promotion. What it signifies is after the promotion, consumers continues to buy the coffee even without discount.

So, for companies looking to penetrate the market, promotion and heavy discount would work.

Other markets

This is really my "guesstimate", I do not have any hard data to back this up, but convenience might be the key.

How many of us guys have shopped with wives or girlfriends before?

Then, you would want to find a place to relax while the ladies shop right? If that is the case, this might indirectly drive up the sales for this outlet.

It happens to be in the right place. This could be a very loose theory but if anyone has other observations, do share it with me and I would be happy to discuss further.

So folks, the whole world economy is down but coffee is thriving. Now, you know why so many people want to open a coffee shop right?