Now is an excellent time to revisit your business plan. The coffee business can be fierce for the small independent coffee shop. Therefore, your business plan needs to be kept up to date.
Americans consume 400 million cups of coffee per day. This is a convincing argument for business stability. But most business plans could not have foreseen Covid 19 shutdowns. And now the industry is about to be hit again.
Supplies Are Down
Some of the top coffee-producing countries have experienced extreme weather conditions. This has severely affected the coffee crops.
The Wall Street Journal reports that coffee farmers in Brazil faced both drought and frost. This has reduced some farms’ production of arabica beans by nearly half. Two years ago, Brazil, one of the largest coffee exporters, produced 48.7 million bags of beans. This year’s production is down to 35.7 million bags.
Inflation Is a Factor
The current inflation rate is slightly down at about 8.2%. However, even moderate inflation can rapidly erode purchasing power. This will impact your ability to estimate future costs.
Inflation rates will affect the cost of your coffee and every cost in your business plan. These costs will need to be passed on to your customers.
Your business plan needs to adjust to both decreased supply and inflation. But your customer is facing hard choices. Unfortunately, their income is not keeping up with these rising costs. Fortunately, most Americans will be hard-pressed to give up their coffee.
News sources like Good Morning America recommend their viewers make coffee at home. If it means giving up their morning coffee or making it at home to save money, customers will be tempted to make their coffee at home. Is your business model ready for this change?
Make An Adjustment
Your business plan must adjust for these rising costs and change how your customers may get their coffee. A Gorby coffee packing machine is an ideal addition to your business plan. Check out the Gorby website.