Some facts about the business of coffee

By | September 4, 2007

According to a recent Mintel report the market for branded coffee shops will increase by 52% from 2006 to 2011.  The profile it follows will be something like this.

  • 2006 – £675 million
  • 2007 – £736 million
  • 2008 – £801 million
  • 2009 – £874 million
  • 2010 – £948 million
  • 2011 – £1.02 billion

The big three – Starbucks, Costa and Caffe Nero currently make up nearly 60% of the shops and I see no reason why they won’t continue this split as we move forward.  But that only provides a bigger opportunity for small local cafes and small chains to prosper.  The joy of being small is you can move faster, work more creatively and provide a friendlier option for the coffee consumer – but, and it’s a big “but” only if you can manage to stand back and work hard on your business and not work in it relentlessly.

The Big Three are simply going to get better at what they do.  They are going to improve every aspect of their business since they have whole departments dedicated to this.  Their human resource departments are working hard to train and retain better staff, the marketing departments are working hard to keep the brand in front of the customer and the finance and buying departments are constantly striving to buy cheaper and put more money to the bottom line.  Whether you have one, two or twenty sites you must keep thinking the same way.

So that’s the good news – those are the good facts about our growing industry.  The bad facts are that small operators are closing down every day and, although there are no clear statistics for this yet, we have to assume that our closure and success rates are very similar to the classic restaurant business.  i.e. 85% – 90% of them will fail.

So once again you have to make sure this isn’t you by working your business all the time.  You must stand back and realise that it is a business and not a hobby.  The first three chapters in our book drum this home and then drum it home again.

Make sure you are part of the £1 billion statistic in 2011 and not part of the 90% failure statistic.  Failing in business isn’t fun.  I know.

 Johnnie 

2 thoughts on “Some facts about the business of coffee

  1. Emma

    Hi, just found this blogg!!
    I know that you have written a book and before i go a head and order please can you give me a push in the right direction!!!
    I am looking at opening a coffee shop….but where do i start, i have found the premisses, but costing re fit etc.. where do i start??
    I don’t won’t to be part of the 90% before i can start!!
    any help would be much appricated..

  2. John Richardson

    Hi Emma

    The harsh reality is that you probably need to read quite a few books and not just hours. The reason I put this post up was to highlight the fact that, although the business is great, it is also fraught with people coming in and not really fully grasping the fact that it is a business:

    If you go here:

    http://www.tenbigmistakes.com/

    You’ll get the ten big mistakes free into your email that I see with operators. This gives you a better idea of the sorts of things to be aware of. I’m also working on a “Big Start-Up” kit that should help to guide you through the whole prcocess more effectively. I would also obviously urge you to buy our book. It’s for new operators as much as existing ones.

    If you buy it from us directly on the amazon site…

    http://www.amazon.co.uk/gp/offer-listing/0954906691/ref=dp_olp_2/026-6868443-1674845?ie=UTF8&qid=1192442340&sr=8-1

    … I’ll send you an audio where Hugh and I discuss many of the most important issues.

    I’ll contact you by email too and see how we can help.

    Regards

    Johnnie

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