Interested in making an investment in coffee? It’s a lucrative market, but some things just don’t work. Learn what to avoid and the better options for success.
Americans’ coffee consumption has reached a two-decade high, according to figures from the National Coffee Association. 66 percent of Americans drink coffee every day, more than any other beverage (including tap water) and up by nearly 14 percent since January 2021. At-home coffee brewing remains above pre-pandemic levels, but consumers are happily returning to their favorite coffee shops and beloved baristas, as well. Because the possibilities for how we consume our caffeinated bean drinks are always changing, there are many ways in which coffee presents as an investment opportunity.
Any investment can be risky but having some of your portfolio in tangible commodities like a coffee investment certainly has its benefits. Starting to invest in coffee requires that you know how and where the coffee is made, understand your investment options and the associated risks. Buying stocks allows you to become part owner of a company you believe in or see a future with, so if the company grows and turns profit, you will benefit. When you buy an exchange traded fund (ETF), you invest in coffee at a decreased risk, as ETFs are collections of investments that track an overall industry index or commodity as opposed to a specific company.
When you invest in coffee futures, you’re betting on how much coffee will be worth at a specific time and date. These types of coffee investments can be promising depending on your level of investment, the company you choose to support (stocks), and your prudence in the long term.
Starting a coffee shop can be an exciting and profitable endeavor for any ambitious entrepreneurs who want to make their mark and understand the demands of the business. Before you open an independent coffee shop (or any other small business), it’s essential to understand the market, as well as the advantages and disadvantages of the business model so that you are fully prepared for what’s in store.
We know that Americans consume coffee at a high and consistent rate, so centering a business around this daily custom makes a lot of sense. For comparison purposes, you can expect a higher level of sales frequency per customer than the average restaurant, as many coffee lovers frequent their favorite coffee shop every morning on their way to work. While customers may be loyal to a local pizzeria, they are probably not going to stop in more than once a week. With a coffee shop, customer loyalty translates directly to daily sales.
After market demand, coffee shops also tend to enjoy a much higher profit margin than other businesses in the food and drink services space. While every business is different, some figures estimate that coffee shops make 70 percent gross profit per cup of coffee sold, after factoring in labor, supplies, etc. As an independent coffee shop owner, you will oversee sourcing your beans, equipment, and other items to both attract business and approach a favorable profit margin. This can be a challenging trial-and-error process, particularly for first time business owners.
At the same time, because of coffee’s popularity, the ubiquity of coffee shops in every town in America can become a hinderance to new independent owners. While the market demand is large, what is to prompt customers to visit your new shop on a street that already has three other established businesses operating with success? Market saturation is certainly a concern for new independent owners, and something you should investigate before choosing your coffee investment.
Whether you are simply curious about making an investment in the lucrative and promising coffee industry or have always dreamed of owning your own business, Scooter’s Coffee® presents a winning opportunity for all ambitious, like-minded entrepreneurs. With over 20 years of franchising experience and a proven business model, Scooter’s Coffee remains at the forefront of a booming industry.
So, why choose Scooter’s Coffee? The brand offers different yet equally compelling options for ownership, and appeals to prospective franchisees by prioritizing excellence, support, and amazing coffee. As innovators of the drive-thru coffee kiosk model, Scooter’s Coffee knows what it takes to keep our customers happy and our franchise owners successful.
To learn more about what Scooter’s Coffee is all about and explore franchising opportunities, request more information today!