Coffee Market Analysis in Brisbane: Trends, Competition and Strategies

This report provides a comprehensive market analysis of the coffee industry in Brisbane, highlighting the rising standards of coffee drinkers, the competitive landscape, and key success factors. It emphasizes the importance of price, quality, and customer service, while also noting the influence of Australian coffee culture and the growing number of small coffee shops. The analysis focuses on market trends, including the diversification of services and products offered by cafes, and identifies the target market strategy, primarily focusing on students and faculty near universities. The report further examines industry regulations, the limited government assistance, and the adoption of technology in the supply chain and operations. Finally, it addresses the competition from other hospitality establishments and the need for operators to adapt to changing consumer preferences and technological advancements. Desklib provides access to this and many other solved assignments to support student learning.

Market Analysis-
Coffee drinkers have raised the standards for cafes, baristas and businesses as their demand
for the bean continues to skyrocket in Brisbane. Australian coffee culture along with growing
numbers of small coffee café and restaurants leading to growth in the level of competition
with less restriction to entry and sparse industrial concentration. Price, quality of product and
customer service are the major determinant factors for the success of any business entity. In a
specific concern to coffee, its texture, brand and even level of cream in espresso are getting
important to customers. Love for coffee is the main factor for industry growth in the last five
years aftermath of the global economic downturn. Revenue growth can also be seen to be
fuelled by this factor. It has been estimated that the industry is expected to grow 3.2%
annually. It also estimated revenue growth of 2.4% in 2014-15 to $4.3B.
Mission-
The analysis will help to establish a place where customers can enjoy the best-brewed coffee
to get relax and comfort in an environment that will be praised by all. The café will be the
place that will provide coffee of consistently increased quality along with a sense of peace to
mind with its convenient location, ambiance, and friendly customer service. The
establishments need to invest the profit for the capital development of their employees.
Keys to success-
While analyzing for the establishment of any business entity keys that leads to success can be
mentioned as:
 Efficient and visually attractive store design that provides faster operation and service
to customers.
 Training of employees to prepare the best coffee to serve.
 The market strategy that helps to build a solid and loyal customer base also helps in
maximizing the sale of some products with high margin available in the store.
1- Market Trend
Cafes and coffee have grown in both diversity and number in the last five years. The
industry has increased the variety of services offered as there is a consistent increase in
the number of cafés owned by artisan bakers. There is a diversified increase in food
offerings by the industry at the territorial level. Products are broadly segmented into
coffee, food, and other beverages. (Mordorintelligence.com, 2019).
The nature of product and service has significantly affected by income level in any
market. Product demand is based on the discretionary income of an individual to a great
extent.This leads to market segmentation depending upon income level. While the
industry service so far depends upon income segmentation of society, the Australian
coffee culture is less reliant on income level.

lowest income
quintile second income
quintile middle income
quintile fourth income
quintile highest income
quintile
0%
5%
10%
15%
20%
25%
30%
35%
MARKET SEGMENTATION
These are the customers who are most likely to buy coffee products as given in market
research. Since coffee consumption, by and large, depends upon the specific section of
society and higher education attendants and it mostly depends upon the level of higher
education, so proximity to university or college will be best for the business of café.
2- Target Market Strategy
Here analysis will base on the people who want their coffee cup in one of the best and
relaxing environment. There will be variation in age, location, and types of customers.
As we have decided to have proximity with the university so a major share of
customers will be students and faculty. Also, we know that these are the type of
customers whose preference will be quality of service and will gravitate towards the
better taste of the coffee. Also, the coffee bar acts as a perfect reading and meeting
location for a lot of students. Here they can read and meet with each other and friends
without the need of paying extra charges. This will lead us to create a loyal client
base. A general trend among Australian customers towards quality can be seen in the
recent growth in the consumption of coffee. Along with this, the desire of some
indulgences and something more exotic and unique can provide selling opportunities
for coffee bars.

Teenager Students and
Faculty Office Workers others
0
5000
10000
15000
20000
25000
Market Share
Market Share
3- Industry Analysis
The retail coffee industry has a bright potential to flourish in Australia primarily due
to climatic and weather conditions. Rain and prolonged cold season are best suited for
the consumption of hot beverages. While in summers, iced drinks made using coffee
drive people to cafes as it will bring relaxation from hot summer. Also, coffee has
become a lifestyle for people in the Pacific that helps to create widespread and strong
coffee-based beverages that can be consumed to get a relaxing environment. The chart
below displays market potential with many customers who prefer to drink coffee.
(Mordorintelligence.com, 2019).
Revenue($m)
Industry Value Added ($m)
Establishment
Enterprise
Employment
Wages($m)
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Industry Data
Industry Data
Product-

Our store will serve the best coffee experience around the area. There will be the use of high-
quality ingredients that will make coffee by strictly following guidelines related to
preparations. The layout of the store, menu and other market strategies will focus mainly on
the higher sale of products with high margin as discussed espresso drinks. Brewed coffee,
some type of tea and other relevant snacks will also be available in our store. Sandwiches,
salads and various pastries will also be offered by our store to the costumes. For those who
prefer to prepare coffee at home., we will also soon launch-selling of coffee beans. All these
offerings will be compensated by free magazines and books that will be available in café to
make the customer feel relax and read inside the coffee bar.
 The literature of sales-
It has been planned to distribute approximately Two thousand flyers in the adjacent
neighborhood, university campus and at malls and some selected office buildings before the
opening of about store. We will also provide free postcards with endorsements printed among
the patrons(The Business Plan Shop, 2019).
 Description of products-
There will be a need for an espresso-based menu for the coffee bar such as lattes,
cappuccinos, and mochas, etc. These drinks will be needed to base on espresso shot and
will be offered with skimmed or soy milk. Espresso shot will be prepared with the help of
an espresso machine by forcing heated water through the ground coffee at high pressure.
These shots will be offered in combination with steamed milk along with other additives
like cocoa, caramel, etc. All these processes will need a high level of expertise and
accuracy as the minor deviation in the coffee size, the temperature of the milk or the
amount of coffee in the shot can affect the customer experience negatively about the
quality of the prepared drink.
Regulations and Policies-
A medium level regulation is imposed on cafes and coffee shop industry food safety service
and hygiene are some of the regulations which are mainly focused along with some more
bureaucratic requirements also in place Food standards code in Australia is used to govern
food hygiene in the industry. Delivery of optimal hygiene will be the responsibility of the
Operator under this code there is a provision of inspection by officers under this code alsothe
inspection will focus on educating operators and identify some of the safety norms and
concerns there must be a suitable plan with operator which focuses on self-regulation
andsafety concerns there is a need for some Council legislation to undertake training in
appropriate food handling from operators to the owners of restaurants and cafes there hasbeen
Rapid increase in the number of restaurants and cafes in areas having high trafficdensities this
is making planning building and conversion regulations more significant newentrants in the
industry needs to convert existing premises into Cafe and they are required toare there to
various planning laws which are different for different states there are specifiedregulations
about the convergence of buildings depending on the location for use as a café conversion

and Constructions of building expected to be more prominent as desirable locations become
increasingly spares other regulations that are needed to perform our ban on smoking in
covered areas fees for dining on Footpath areas streets Chinese and licensing cost involved in
certain kind of background music this kind of minor regulations can help insignificantly
increasing cost and administrative burden on operator.(Kolk, 2012).
There are various local council regulations to which the industry has to comply with in
regards to the provision of licences of liquor for consumption of the liquor over the premises.
Some of the other legislation that affects the industry are fees for footpath dining, ban on
smoking in the various areas that are covered, licensing costs and street sinage that often
involves the various background music. All the above mentioned regulations can help in
increasing the administrative burden as well as the costs on the operators. (Huh et al., 2016).
Industry assistance-
In Australia the government does not assist the coffee and cafe shop industry. This level of
assistance is only because of relative East entry and absence of international competition in
the coffee and Cafe industry major section of the establishment are locally owned which are
minimising the need for production to the industry this industry does have a national level of
protection as it has highly fragmented composition and interest coffee culture it has been
found that Global chains are getting it difficult to create a stronghold as the consumers in
Australian market preparing small boutique type shops as compared to two international
brand chain.
Technology and Systems-
There is introduction of very medium level of Technology in the cafe and coffee shopindustry
major functions of the industry are labor oriented which are decreasing the needfor any kind
of Technology this technological advancement in the coffee industry aims toprovide better
service opportunity to the owners of the restaurant and less wait time for theconsumers
balance electronic ordering systems that helps linking kitchen to the ordermaking system is
the best example of the technological innovation in the beverage industryas the customers are
focusing more on quality so Technology here can be beneficial theconsumers fusion of
smartphone and tablet technology is also the major innovative step inthis industry provision
of tablet based cashier system that can lead to manage paymentsinventory employees
reporting and Analytics it also allows operator the mobility of this data ithelps the operators
to move data within tablets and computers that simplify the daily workand operation of
business that improve convenience in Information sharing with third partiesas accountants the
systems r are not that what expensive but they are user-friendly andcompact which makes
them appearing for operators with small businessIndustry has also changed in the supply
chain Technology successful operators in order toavoid wastage need to maintain stock
control strictly there's also requirement of providingaccess to a range of good quality
fresh ingredients. online ordering systems integratingsupplier and operator for the supplies of
Coffee Bean and various prepared food items. (Best, 2014).
The change in technology has been affecting the industry in its supply chain. It is suggested
that the strict stock control is being maintained b the successful operators so that any kind of

wastage can be avoided. Not only this the access to various fresh ingredients and quality good
is required. There are various online ordering systems along with the suppliers as well as
wholesalers that have greater level of control over the ordering systems and thus helps in
increasing the efficiency level so that the same can be coordinated with the supplies that
includes the various pre prepared food as well as the coffee beans. (Anon, 2019).
Competition-
Past two years there has been a significant increase in price competition from external
sources operators in the industry are facing a very high level of the competitive environment
the operators here ear are forced to compete with other Cafe and coffee shops and other
hospitality industries.
 External Competition –
There has been a high level of competition with other hospitality establishments such
as
casino pub restaurant hotel and clubs coffee shops which are particularly susceptible
to face competition from other hospitality restaurants among which many of them also
serve coffee and other substitute products consumers are moving towards more
convenient cheaper Café meal which is increasing the range of quality range and
quality of food choices and competition for lunchtime trade in city areas consumers
are preferring cheap and convenient food. 7-Eleven initiated this trend through the
introduction of $1.00 coffees, with fast food operators quickly following suit.
 Internal Competition-
Low barrier to the entrance in the industry is fuelling the internal competition of the
industry. Ease of entry costs very low to start-ups and also acts as a motivation for the
competition in the industry. Numbers of small coffee shops and cafes are increasing
very much that is causing a high level of competition in the industry. Operators are
competing with each other based on location, consumer preferences and convenience
of demand from their coffee providers.

References-
Anon, (2019)...
Best, J. (2014). What would Repin do? The daily grind was not restricted to coffee. The
Medical Journal of Australia, 200(10), pp.601-602.
Huh, K., Hong, J., Jeong, J. and Joo, Y. (2016). The Effects of Consumer Loyalty and
Drinking Motivation for Coffee on Coffee Consumption: A Structural
Analysis. Consumer Policy and Education Review, 12(3), pp.1-18.
Kolk, A. (2012). Towards a Sustainable Coffee Market: Paradoxes Faced by a Multinational
Company. Corporate Social Responsibility and Environmental Management, 19(2),
pp.79-89.
Mobile application stores in 2012. (2011). [Place of publication not identified]: Mind
Commerce Pub.
Mordorintelligence.com. (2019). Australia Coffee Market | Size | Analysis | Forecast to 2022.
[Online] Available at https://www.mordorintelligence.com/industry-reports/australia-
coffee-market [Accessed 5 Jun. 2019].
The Business Plan Shop. (2019). How to do a market analysis for a business plan. [Online]
Available at
https://www.thebusinessplanshop.com/blog/en/entry/market_analysis_for_business_plan
[Accessed 5 Jun. 2019].