Coffee - An oversaturated market or a shift

I've heard so many people tell me, the coffee industry is overly saturated, with to many brands and to many cafe's and as much as I listened, each one of those people have tuned back to say the market is still growing. In NYC, independent cafe's now outnumber chain cafe's, controlling 55% of the market. 6-7 years ago, Hong Kong had around 200 cafe's and today it has 2000. Singapore opened up around 200 new cafe's last year, while int he UK BP opened a chain of cafe's called Wild Bean Cafe, Shell is doing the same in test locations (their own brand), Gregg's is starting to look at their coffee more and in general, the UK coffee market grew by 12% last year and is on course to double by 2025. Pubs are rapidly closing down around the country, as our culture is no longer a pub culture but a cafe culture and as I write, I'm writing this post not from home or an office, but a cafe.

While many people believe we are inundated with new coffee brands, I find it hard to actually think of any well branded coffee except Death Wish Coffee, as it's good coffee and has interesting/tongue in cheek branding. I'm not going to say our coffee at Malala Coffee is the best in the world, as all our tastes are different and I'm not going to say our company is the best in the world, as it's all subjective. Plus, who ever got anywhere by always being negative to the competition.

The market is changing for sure, but it's not changing for the reasons people think.

The UK is changing from a World War II influenced, instant coffee culture (which I'm as much of a fan of, as anyone - Nescafe + Milk + lots of Sugar - What's not to like, but if you add lots of sugar to anything, I'll always like it but as a straight coffee, you'd never catch me drinking that by choice). So now the UK coffee culture is on the rise, Brazil is about to overtake the USA as the number 1 consumer in the world, which will affect exports to the US from Brazil, pushing up prices and many countries who never imported coffee before, are now also changing suit and starting to develop their own coffee culture.

Starbucks global expansion is something we all see as responsible for changing coffee culture internationally and for that, I'm thankful but these days Starbucks are on the way down. It might take a while, but if you notice more successful cafe's next to Starbucks, it's because the coffee is better, plain and simple and it's not that hard to be better than Starbucks when you're latest innovations in your cafe's, are to not keep the water tap running to clean your coffee spoons.

Even pubs and restaurants now need to serve good coffee or they'll loose business.

I believe the coffee industry has not reach saturation, but is now changing into something better, something more focused on good/great quality coffee and people who have pride in the coffee they roast and serve.

Sooner or later, good coffee will be everywhere and it's this market which I believe will be the next big change in the market. Where pubs used to have any kind of coffee available, just so it was on the menu and an option, it will soon be seen as an important element to any menu in any hospitality location.

Quality coffee is something everyone wants and customers should never be denied this, for the sake of anyone looking to make a slightly bigger margin when a kilo of coffee might cost $25, you change $3-$5 per cup and make around $670 profit per kilo.

To any company who doesn't start providing good coffee it it's customers, you will simply loose those customers.

We only sell B2B and we're happy to work with anyone in hospitality and if it's not our coffee, I still suggest you getting away from branded coffee which is often just bad coffee, masked by being a recognisable brand name.

www.malalacoffee.com

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