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Coffeehouse business

Do you know that a ‪#‎CoffeeHouse‬ ‪#‎business‬ has a growth rate of 7% with 85% as its ‪#‎GrossMargin‬. Read to know more...

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Coffeehouse business

  1. 1. 1 Worldwide,peopledrinkover 500 billioncupsof coffee everyyear. Peoplelove todrinkcoffee.Soa coffee shopbusinessisa good choice tosetup. Coffee shopsare the fastestgrowingniche inthe restaurantbusiness.Theyhave a7% annual growth rate. Coffeehousescome inavarietyof formsbut, traditionally,theyare small establishmentssellingpreparedcoffee,teaandotherhotbeverages.More recently,manycoffeehousescompete withotherrestaurantsinthe limited-service categorybyserving bakedgoods,sandwiches,saladsandothersnackitems. Restaurantsare a toughbusiness,butcareful planningandprudentexecutioncanleadtosuccess. A cafeteriarestaurantisa self-service restaurantwhere customersorderatthe service counterand take the foodto theirseats. The gross margin for a coffee shop is85%. Operatingincome fora coffee shop can average 2.5% of netsales. UnitedStatesisthe LEADINGCONSUMER of coffee inthe worldwith 146 billioncupsof coffee peryear. The coffeehouse industryinthe UnitedStateswasforecastedto generate more than 31 billionU.S.dollars inrevenue in2015. AndJapan ranksnumber3 inthe world for coffee consumption. Plusinasurveyitis alsoestimatedthat Café Bars make an average salesof 230 cups a day. Operations The operational planfora cafeteriadealswithstartupissues,basicoperations,short-termandlongterm strategyand maintainingfinancialsustainability. The operational basicsinclude licenses,menusand technologyinvestments.Restaurantstypicallyrequire operatinglicensesfromlocal authoritiesandare subjecttoregularhealthandsafetyinspections.The menuisthe cafeteria'sproductbrochure.Basic technologyinvestmentsinclude apoint-of-salesystemandsoftware accountingpackagesfor bookkeeping. Majorityof coffeeshopownersofferfranchisesasa meansof growingtheirbusiness. A coffeehouse isalwaysaccompaniedbyfree Wi-Fi,spacioussittingarrangement, andvariousotherin- house entertainments. Strategy Cafeteriasface competitionfromfast-foodrestaurants,supermarketready-to-eatmealsandhigh-end restaurants.Managementmustunderstand the needsof itsclientele andseektodistinguishitself from the competition.A keycomponentof arestaurant'shumanresourcesstrategyistokeepturnoverlow. Thishelpslowerrecruitmentandtrainingcostsandimprovesbothcustomerservice andthe qualityof the food. Letshave a lookat some of the strategywhichcan be incorporated: Use of LoyaltyCards Make sure it isa qualitycard that will lastthe wearandtear and lookgoodina customer’swallet. Nothingbetterthanseeinganewcustomer’sface lightupwhenyougive themabuysevengetthe
  2. 2. 2 eighthone free loyaltycard,buttickoff six of themso that on theirverynextpurchase theygeta free one.It isthe cheapestcustomeracquisitionever. Multiple listsof itemsinthe menu A coffee shopwill nevermake enoughmoneytopaythe billsfromcoffee salesalone.Coffee maybe the prime motivatorforcustomerscomingtothe business,buttheymustleave withmultiple salesif you are goingto be successful.Asatarget,coffee shouldbe nomore than40% of yourweeklysalesandtwo itemsalespercustomertransactionmeansyouare gettingitaboutright.So make sure the traditional coffee accompaniments(muffins,cookies,cakes)are close byat the pointof sale and the coffee shop offerscoldfood,colddrinks,andhotfoodto ensure the bestchance of multiplesales. Counterservice Counterservice isthe cheapestmostefficientandeffective service systemforacoffee shop,anditis nowfullyacceptedby customers,thankstothe global successof McDonalds.Counterservice ishassle free forboth youand yourcustomer,andit significantlyreducesyourwagesbill.Sogetthe customers to orderand pay upfront,give themanumberona standwiththeirdrinks,anddeliverthe foodor betterstill give themabuzzerthatcallsthemup to the counterwhenthe foodisready.Counterservice meansthat youcan handle the peakdemandsthatoccur in coffee shopsatbreakfastandlunch,andit is a lot lessstressful oneveryone,ensuringthe friendlybantercanremainanimportantpart of your offer. EspressoCoffee As we have alreadydiscussedthatworldwide,peopledrinkover500 billioncupsof coffee everyyear. Andout of that number, 14 billion are Italianespressocoffees.Sokeepingthe espressocoffee inthe store will increase the sales.
  3. 3. 3 Leadingcoffeehouse chainsworldwide: 1) Starbucks Starbucks Coffee isanAmericanglobal coffee companyand coffeehousechain basedin Seattle, Washington.By far America'scoffee giant, itisthe thirdlargestrestaurantchain inthe U.S. It owns 5,500 internationalcoffeeshoplocations. In2014, starbucksearnedrevenue of $16.45 billion.In 2013, Starbuckswasthe biggestcoffee housechainworldwidebasedonnumberof storeswith 19,767 stores worldwide.Starbuckslocationsserve hotandcoldbeverages,whole-beancoffee, microgroundinstantcoffee,full-leafteas, pastries,andsnacks. 2) Tim Hortons Tim HortonsInc. (knowninternationallyas TimHortonsCafe and Bake Shop) isa Canadian multinational fastcasual restaurantknownforits coffee anddoughnuts.The worldwide revenuein 2014 was$3.16 billionwith4, 740 stores (2013) worldwide. ItisalsoCanada's largestquickservice restaurantchain;as of September2014, it has 3,665 restaurantsinCanada,869 in the UnitedStates,and56 in the Persian Gulf region. OnAugust26, 2014, Burger Kingagreedtopurchase Tim Hortonsfor US$11.4 billion;the chainbecame a subsidiaryof the Oakville-basedholdingcompany RestaurantBrandsInternationalon December15, 2014, whichismajority-ownedbyBrazilianinvestmentfirm 3GCapital
  4. 4. 4 3) PaneraBread PaneraBread isa chain of bakery-café fastcasual restaurantsinthe UnitedStates andCanada.Its headquartersare in SunsetHills,Missouri,asuburbof St.Louis,and operatesas SaintLouis Bread Company inthe St. Louismetropolitanarea.Offeringsincludesoups,salads,pasta,sandwiches,and bakeryitems. The revenue of panerabreadin2014 was $2.53 billionwith1,777 stores (2013) worldwide. In2006 and 2007, Panerawas the largestproviderof free Wi-Fi inthe UnitedStates. 4) Costa Coffee Costa Coffee isaBritish multinational coffeehouse companyheadquarteredin Dunstable,England,anda whollyownedsubsidiaryof Whitbread.Itisthe secondlargestcoffeehouse chaininthe worldbehind Starbucks and the largestinthe UnitedKingdom. 5) Caffe Nero Caffè Nero (Italianforblackcoffee)orCaffè NeroGroup Ltd isa Europeanstyle coffee housebrandwith itsheadquartersinLondon. Currently,the companyrunsmore than700 coffee housesworldwide andis establishedinsevencountries,includingthe UK,Ireland,Poland,Cyprus, Turkey,the UAEand the UnitedStates. Indian coffeehouse chainindustry Café Coffee Day: ThisIndiancoffee chainisbeatingStarbucksatitsown game.Café Coffee Day,ownedbythe holding
  5. 5. 5 company Coffee DayEnterprisesLtd,isalreadythe marketleaderwhenitcomestocoffee inIndia. ithas more than 1,500 cafesin200 citiesandtownsacrossthe country,including191 inBangalore and185 in Delhi. Barista Lavazza Barista Lavazza is one of the biggestcoffee restaurantchainsinIndiawhichofferbestcoffee andtea withall kindof International flavors. FormerlyknownasBarista, itwastakenoverby Lavazza in2007. Baristais the firstcoffee retailerinIndiatostart a loyaltyprogramme,Bean-o-holic,toattractand retain customers. Otherwell-knownbrandsinthe coffeehouse chaininclude CostaCoffee, Dunkin’Brands, Krispy Kreme Doughnuts,CoffeeBean &Tea Leaf etc. In 2013, Dunkin’Donutswasthe secondlargestcoffeehouse chainbasedon the numberof storesworldwide with10,858 stores. Keywords: Coffee,coffeehouse,store,coffeebean&tealeaf,Starbucks,PaneraBread,TimHortons,espressocafe, espresso, America,Japan,coffee consumption,coffeehouse revenue. Ref: http://smallbusiness.chron.com/operational-plan-cafeteria-restaurant-13053.html http://www.forbes.com/sites/quora/2012/12/20/whats-the-secret-to-a-successful-coffee-shop/ http://www.businessinsider.com/facts-about-the-coffee-industry-2011-11?op=1#ixzz3c5TLpdLV http://brandongaille.com/25-coffee-shop-industry-statistics-and-trends/ http://www.statista.com/topics/1670/coffeehouse-chain-market/ http://www.statista.com/statistics/270091/coffee-house-chains-ranked-by-revenue/ http://www.statista.com/statistics/272900/coffee-house-chains-ranked-by-number-of-stores- worldwide/ http://www.coffee-statistics.com/coffee_statistics_ebook.html
  6. 6. 6 "TimHortons to add 500 Canadianoutlets,300 in U.S. by2018". The Globe and Mail http://www.timhortons.com/ca/en/about/the-story-of-tim-hortons.php "Corporate Profile".TimHortons.RetrievedMarch8, 2015. http://qz.com/416670/this-indian-coffee-chain-is-beating-starbucks-at-its-own-game/

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