Associated Content regularly posts articles of informed-yet-amateur research, and today they published one on the economic outlook of the retail coffee beverage business: Coffee Economic Forecast – Associated Content.

The author highlights that regular coffee sales (“convenience coffee”) are projected to grow 7% annually while espresso beverages are projecting 15% annual growth. So there is money to be made with growing consumer tastes for the stuff. And while Real Gross Domestic Product is expected to fall in the coming years, coffee makes for a cheap luxury item, without all the baggage that cigarettes carry. Therefore, it would be little surprise if coffee sales remained strong in an economic downturn.

With pricing taken out of the competitive focus (sales are increasing regardless), the author suggests that atmosphere, events, location, and peripheral services will differentiate the competition. She expects the fast food peddlers to muscle in more for their coffee revenue cut on the basis of convenience, but the rest will need to focus on these four areas.

Of course, I subscribe to the most difficult differentiator of all — and the hardest to reproduce at a grand scale: excellent coffee. But that’s why there will be niche cafés that top the lists on sites like CoffeeRatings.com … and why everyone else will be getting coffee and a smog check at a Starbucks DVD release party.