Opportunities in the Coffee Shop Business - Assignment Example

One study that significantly highlights the growth of the US coffee industry was cited in the article written by H. Holmes. (2004) According to Holmes, "specialty coffee consumption has risen from 9 percent in 2000 to 16 percent in 2004. Every day, more than half of the adult population drinks coffee, 108.9 million people. The United States accounts for 52 million of those coffee drinkers." (2004) More importantly, Holmes cited various data that helps define the current state of the US coffee market.

For one, Holmes pointed out that Even though 75 percent of the cups of coffee brewed daily are consumed at home, 66 percent of Americans buy their coffee outside of their homes. The Specialty Coffee Association of America reported at the end of 2003 that the total number of retail coffee shops in the country had reached 17,400 or 4% more than in 2002. The market size of coffee grew from $7.53 billion in 1999 to $8.96 billion in 2003 (Holmes, 2004). Such findings translate to wonderful prospects for current and future coffee establishments such as the Coffee Connection.

What such data means is that Americans are very likely to purchase their coffee drinks from coffee shops rather than make them at home. Also, it was pointed out in the same article that coffee bar patrons are younger, more affluent, and educated and are 22 percent more likely to be aged 18-24. This means well for the Coffee Connection primarily because a majority of the people in the inner city campus targeted by the said establishment fall between the said age range. In another study conducted by the research group Data Monitor of the US Coffee Industry, several significant findings were made.

According to the said study, "Prepared coffee sales continue to outpace packaged coffee sales, becoming more widely available than ever before. Prepared coffee is not only driving growth in foodservice channels but in retail channels such as convenience stores as well." What this translates to is that consumers are more inclined to purchase coffee prepared in various establishments such as coffee shops and convenience stores rather than buy packaged coffee drinks. Such findings go well for prospective coffee shop owners.

Also, the said research found that despite the rising prices of coffee brought about by the dry weather in coffee-growing regions and damage from natural disasters such as Hurricane Katrina, the retail coffee market remained elastic all throughout the said increase. This, again, translate to good prospects for future coffee shop owners as it means that the consumer market continues to drink coffee despite the increase in price. Another article that has a significant bearing on the establishment of Coffee Connection was written by Alex Fisenko (2006).

In his article, Fisenko pointed out that there is a bright future that lies ahead for coffee shops, even the small and independent establishments. Basically, Fisenko asserts that "The single most important factor for the success of the retail coffee business is the location" (2006). The amount of sales and profit generated by a coffee shop depends greatly on the location chosen for it. Furthermore, Fisenko pointed out that independent coffee shops should not be deterred by large-scale coffee chains.