Today’s Spokane Journal of Business took the local angle on coffee’s current explosive growth bubble: Spokane Journal of Business – Coffee industry rides grande buzz.
According to the SCAA, U.S. specialty coffee sales rose sharply to $11 billion in 2005, up from $9.6 billion in 2004. And Starbucks, the bellweather of specialty coffee, recently reported record net income of $127 million and revenues of $1.9 billion for its second fiscal quarter, up 27 percent and 24 percent, respectively, from the year-earlier period. Starbucks opened 874 stores in the past year, and they plan to open a total of 1,800 stores in 2006.
The article goes on to detail the growing number of retail outlets for espresso, citing the profit margins on espresso beverages as a main business attraction. However, without sufficient sales volume, many a dreamy-eyed café owner is destined to wind up broke and in tears. For example, Tom Wood, who co-owns Black Tie Coffee, said his stores need to sell at least 200 drink and food items a day to turn a profit.
With all this growth comes greater competition, however. I won’t suggest we’re in a consumer coffee bubble just yet. But if there was going to be one, the pieces are starting to snap into place.
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