ATLANTA — According to new research by Franchise Direct, coffee franchises are poised to profit as other business models struggle to cope with the economic downturn. Following a study of more than 29 franchise disclosure documents, Franchise Direct has learned the $11 billion coffee franchising sector is recession-resistant and an integral part of American lifestyle.
The coffee industry is extremely competitive at the top and fragmented at the bottom. Starbucks, despite its recent struggles, continues to be the industry leader, with more than 10,000 cafes around the world.
While the global recession has forced many consumers to rethink their spending habits, Franchise Direct's research shows that America's love affair with coffee continues unabated. A quoted poll tracking coffee consumption found an increase in coffee drinking last year with the pivotal 25- to 39-year-old demographic, as drinking habits remained level amongst 40 to 59 year olds last year.
In line with the popularity of eco-friendly tastes, there has been an undoubted switch towards organic/fair trade coffee. The report identifies this as a $1 billion industry in itself. The study states that location is the most important thing to consider when purchasing a coffee franchise, with 75 percent of coffee-business success depending on where it is situated.
The study also lists a number of other trends and factors prospective franchisees must consider before purchasing a coffee shop, such as ambience, marketing and staff. Worth noting is that 65 percent of all coffee is consumed during breakfast hours.
