Coffee sales in the US have increased for several years. At the same time, the cost of bulk coffee has been falling every year for seven years. If you have a coffee-based business, consider the stats below to create an up-to-date marketing strategy or business plan.
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COVID-19 has shaken up the coffee shop industry. Many coffee shops have had to close temporarily. Most are not the social destination they once were and have had to update their business model and marketing strategy. We have added and updated stats to reflect recent industry changes.
1. Coffee Shops Have Seen a 5,380% Sales Increase in Curbside and Pickup Orders
Source: Specialty Coffee Association
With social distancing guidelines in place, many customers opt to have their coffee ordered ahead of time and pick it up. It’s essential that any coffee shop has online ordering or an app for customers to order their coffee and easily pick it up.
2. Total Order Amounts in Coffee Shops Are up 25%
Source: Specialty Coffee Association
One bright spot from COVID-19 is that the average order amount people spend at coffee shops per trip is up 25%. So we’re seeing people spend more money every time they go to order coffee. The order increase may be either an increase in the amount of coffee ordered or more add-ons to make their coffee unique.
3. 26% of Coffee Shops Are Now Cashless, up From 2% Before COVID-19
Source: Specialty Coffee Association
Many small businesses are encouraging their customers to pay by card or phone to reduce the possible transmission of coronavirus. Anyone opening a coffee shop must have a modern point-of-sale (POS). This software and tech allow shops to quickly take credit cards and take phone payments such as Apple Pay and Google Pay.
4. Since COVID-19, Coffee Growler Sales Have Increased by 129%
Source: Specialty Coffee Association
If you’re unaware of what a growler is, it’s typically a 32 or 64-ounce bottle filled with a liquid such as coffee or beer. Coffee shops have seen growler sales surge. Many people are now working from home and aren’t passing by their favorite shop on their commute. Consider adding growlers to your product line or marketing plan as a strategy to increase sales.
5. People Who Use an App to Order Coffee Jumped 23% in 2019
Source: Statista
Driven by the popularity of Starbucks and Dunkin’ Donuts mobile apps, now over 27% of coffee drinkers use an app to order coffee every week. This number is likely much higher due to COVID-19. While your coffee shop startup may not have the budget for a full-blown custom mobile app, check with your POS partner; most modern POS systems have mobile app functions available.
6. 25- to 34-Year-Olds Spend on Average $2,688 a Year at Coffee Shops, the Most of any Demographic
Source: Amerisleep Caffeine Study
When marketing your coffee shop, consider marketing primarily to the 25- to 34-year-old demographic. For your Facebook and Google Ads, target this audience with a direct ad. Additionally, consider creating a coffee shop atmosphere that would appeal to 25- to 34-year-olds. Use music selection, interior design, and what’s posted on the community billboard to connect with them.
7. Americans Are Expected to Spend Over $85 Billion on Coffee in 2020, and Over $96 billion in 2023
Source: Statista
The coffee industry has been booming in the US, and it’s expected to continue to grow substantially. This statistic is excellent to include in your business plan’s industry analysis section. If you’re seeking funding from a bank or investor, they will want to know if the coffee industry is expected to grow, shrink, or become stagnate over the next several years.
8. The Average Cost to Launch a Cafe-Style Coffee Shop Is Between $150,000 and $400,000
Source: Fit Small Business Retail Expert
The variation in startup costs is due to several factors. The size of the coffee shop and its build-out cost is a large chunk of this cost. Equipment prices can be a large percent as well, especially if you’re planning on selling food or having multiple espresso machines. To keep down costs, consider buying food from elsewhere and selling in the shop to keep down equipment costs.
9. Almond Milk Is the Most Popular Non-Dairy Coffee Additive
Source: Specialty Coffee Association
Starbucks has created several drinks specifically for almond milk. Many coffee shops are getting creative with different latte flavors. Pennsylvanians, however, think differently when it comes to coffee dairy substitutes. It is the only state that prefers oat milk to almond milk.
10. Labor Costs in a Coffee Shop Are Often the Highest Expense at 28% to 35% of Total Costs
Source: Fit Small Business Retail Expert
When creating the financial projections for your coffee shop business plan, it’s crucial to have an accurate idea of your expenses. This estimate ensures you will open your business with enough financial wiggle room to withstand a drop in revenue. Typically, you’ll want to aim for labor costs around 30%. If they go above 30%, consider thinking more like a retailer—add non-coffee retail products, batch products for sale, or shift to buying more ready-to-eat foods like pastries.
11. 32% of Millennials Report Drinking an Espresso-Based Drink in the Past Day, the Highest of Any Generation
Source: National Coffee Association
The pumpkin spice latte craze almost certainly drives this stat among millennials. Well, we can’t know that for sure. Still, it’s undoubtedly essential to have quality and creative espresso drinks to reach the millennial generation. Additionally, you may want to feature certain types of lattes during certain times of the year, similar to Starbucks.
12. Over 33% of Coffee Drinkers Started Before the Age of 17
Source: SurveyMonkey Coffee Study
The American Academy of Pediatrics (AAP) recommends that a kid should be at least 12 years old before consuming the caffeine amount in a cup of coffee (100 mg). While it isn’t common for coffee shops to market to middle and high schoolers, you should be prepared for a younger demographic to order coffee in your shop.
13. 46% of American Coffee Drinkers Use a Drive-Thru to Purchase Coffee Every Week
Source: Statista
If you’re choosing between a building that has a drive-thru and one that doesn’t, we recommend selecting the building that has one. Even if that building is more expensive, you may earn more revenue in the long term by appealing to a larger customer base. At times—when maintaining social distance or raining—customers may want to stay in their car for a cup of java. That preference drives their purchasing decision.
14. Coffee Drinkers Spend 79% of Their Coffee Budget Outside of the Home
Source: Statista
What’s important to note about this statistic is that the percent spent outside of the home has been rising for several years and is predicted to continue to rise. This is an excellent coffee statistic to include in your business plan’s industry analysis.
15. Out of Americans Who Drink Coffee, 44% Drink 2 to 3 Cups a Day — 6% Drink 6 or More Cups a Day
Source: Statista
Most people drink more than one cup of coffee a day. Starbucks takes advantage of this by offering free coffee refills for anyone who drinks coffee in the shop and is a gold card member. While you may not want to give free coffee refills, consider providing a discount, such as half off coffee refills to loyalty customers.
16. Peak Weekday Coffee Consumption Is 8:30 Am, While the Weekend Is 9:45 Am
Source: Square Coffee Study
Staff your coffee shop accordingly for peak coffee-purchase time. The weekday will be earlier than the weekend, which makes sense because who doesn’t sleep in on the weekends?
17. The Median Pay per Hour in the US for a Food and Beverage Worker Is $10.45
Source: Bureau of Labor Statistics
Consider increasing this wage to recruit more experienced baristas. Once you determine how many hours your baristas will work per week, factor the hourly wage into your business plan’s financial projections. Think of your projections as how much money your coffee shop is expected to earn and spend over its first three years in business.
18. The Average American Spends $1,100 on Coffee Every Year
Source: Acorns
This coffee stat is another great number to include in your coffee shop business plan. The goal of your business is to capture a percentage of that number. The quality of your coffee, customer service, and shop atmosphere will determine what percent of the $1,100 your business will capture.
19. Coffee Contains Over 1,000 Chemical Compounds, Which Requires Precise Brewing Conditions to Release the Coffee Bean’s Ideal Flavor and Aroma
Source: Wikipedia
Part of your shop’s marketing should involve the flavors and aromas your coffee provides. This is one of the advantages your coffee has over the typical at-home Keurig coffee machine. Your barista’s expertise and coffee shop equipment will offer a unique coffee experience that most people simply cannot create at home.
20. The Average American Orders 2 Add-Ons to the Standard Latte
Source: Specialty Coffee Association
Add-ons are anything added to the standard latte. Typically, you can charge extra for add-ons. Increase your business revenue by enabling customers to easily order additional espresso shots, syrups, and various latte milk, such as almond.
21. The Average Price of a Latte in the US Is $4.16
Source: Specialty Coffee Association
This stat will help guide your pricing structure. Consider including a strategy to increase this figure by educating customers in-store about available add-ons. Additionally, make sure your baristas are well-trained on espresso drink combinations. They should softly encourage customers to try new drinks, syrups, and latte milk.
22. 43% Say the Primary Reason They Drink Coffee Is for the Taste — 26% Say It’s to Give Them Energy
Source: Amerisleep Caffeine Study
When marketing your coffee shop, consider emphasizing the taste of your coffee. You will attract coffee connoisseurs who want to experience exotic coffee flavors. Additionally, consider adding energy-related language to your marketing. Words and phrases like “jolt,” “get your morning going,” and “afternoon pick-me-up” will appeal to that 26% of coffee drinkers.
23. 12% of People Who Consume Coffee Every Day Consider It Damaging to Their Bodies
Source: Amerisleep Caffeine Study
Why do people drink coffee if they consider it bad for them? Maybe it’s explained in the previous stat: People drink it for energy. In certain people or when consumed in large amounts, coffee can cause anxiety, restlessness, insomnia, increase blood pressure, and increase cholesterol.
24. The Lethal Dose of Coffee Is About 70 to 100 Cups
Source: Healthline
As a coffee shop owner, you may find that because your coffee is so delicious, certain customers cannot stop drinking it. We call this an extreme coffee addict. While you may enjoy the revenue from a customer that purchases 70 cups of coffee in one day, be careful, it may be a lethal dosage. You have been warned!
25. 4x More People Report Being Extremely More Productive After Consuming Caffeine Than Before Consuming
Source: Amerisleep Caffeine Study
Productivity is a common reason people drink coffee, especially when studying or trying to get work finished. Remember to create a comfortable environment for people to get work done. The longer a customer stays, the more likely they are to become hungry and order food.
26. Alaskans Are the Highest-Tipping Coffee Drinkers in the US, Leaving on Average a 17.5% Tip
Source: Specialty Coffee Association
Factor into your business plan that the average tip for a coffee shop is 11.4%. If you can increase the average tip for your baristas with a unique strategy such as a creative tip jar that may be a way to persuade quality baristas to your shop. If you’re in New Jersey, you may have a higher tip-hill to climb, they’re the least-generous tipping coffee drinkers in the US, leaving on average a 7.5% tip.
Main Takeaways
While the coffee shop industry (along with most small businesses) is taking a hit due to COVID-19, many interesting new trends are taking place. Online ordering and bulk sales of local coffee products are up. Plus, business changes due to coronavirus may accelerate trends already taking place, such as using apps for ordering ahead. If you’re considering starting a coffee business, start lean with a small shop specializing in efficient ordering with the latest technology.
