Coffee Economic Forecast

Eighty percent of Americans drink coffee - 53% every day vs. 49% in 2004 - reports the National Coffee Association (Petrecca, 2005). Americans are in the grips of a coffee craze. Conventional wisdom would say it takes about five years for trends to hit the sleepy Midwest, which would make this the peak of the coffee craze that has slipped into even the smallest of Midwestern towns. The timing for tapping into this boom business is prime as the local market is not yet saturated with gourmet vendors. However, the competition from fast-food and gas stations could prove a significant obstacle, until one considers the other major utility consumers receive from frequenting a coffee shop: atmosphere. In this, smaller coffee shops have an edge. In this regard, the shop must focus on strategies to increase their reputation as a place to "hang out". 

Underscoring this, regular-coffee dollar sales are expected to grow 7% annually for the next three years, while specialty drinks - lattes and cappuccinos - are pegged to grow 15% annually (Petrecca, 2005). The forecasting indicates a need for intensive branding open as an avenue for increasing profits, as well as differentiating themselves from both the fast food and the other coffee shop. It also presents a clear picture that pricing is not the strategy to pay closes attention to as consumers are expected to purchase more coffee. It may even be beneficial for profits that the shop increase prices slightly. The shop must focus on events that will promote the atmosphere and comfort of the location as well as peripheral services offered: computers to rent, free wireless internet, a free book collection and available games.