Start & Run a Coffee Bar. Tom Matzen

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      Coffee is the world’s most popular beverage with only water being consumed in larger quantities!

      — McCoy and Walker

      1. Coffee Worldview

      The coffee business is an exciting industry, far-reaching in its economic impact and rich in history.

      It is the world’s most popular beverage with over 500 billion cups consumed each year. It is produced in 70 countries with the top three producers being Brazil, Vietnam, and Indonesia. In 2010, the global coffee market was worth upwards of $80 billion USD with 25 million small producers relying on coffee for a living.

      Coffee is indigenous to Ethiopia and was most likely discovered as a food before it became a drink. The most popular legend of how coffee was discovered involves an Abyssinian goat herder named Kaldi. Kaldi awoke one night to find his goats dancing around a tree speckled with red cherries. When he tasted one of the cherries, he too started dancing with his goats.

      As interesting as this story may be, it is more likely that coffee was used as a food supplement by wandering Ethiopian tribesmen. The tribesmen are said to have squashed the coffee cherries and carried them on long journeys, eating them for nourishment as needed.

      Later, the coffee cherries were soaked in water, possibly to make wine, but some historians say it was not until 1000 ad, when the Arabs discovered how to boil water, that coffee was served hot.

      Coffee was also believed to have medicinal properties. Avicenna, an Islamic physician and philosopher of the eleventh century, said of coffee: “It fortifies the members, it cleans the skin and dries up the humidities that are under it, and gives an excellent smell to all the body.”

      2. The North American Coffee Market

      In North America, coffee was a $41 billion USD industry in 2009 and, despite the global recession, the market is expected to grow 14 percent in volume over the next ten years to $47 billion USD. The increase in volume reflects the growing preference for specialty or premium coffee including not only higher quality beans but also organic, Fair Trade and unique origin coffees.

      In the United States, over half the population above the age of 18 are daily coffee drinkers with an additional 30 percent who drink coffee on an occasional basis. On average, Americans consume 3.2 cups of coffee per day with approximately 30 million Americans drinking specialty beverages on a regular basis.

      In Canada, approximately 63 percent of Canadians drink coffee on a daily basis with Quebec having the highest percentage (70 percent) and the Atlantic region having the lowest (53 percent). The average number of cups consumed by Canadians per day is 2.6.

      3. Coffee Trends

      While coffee consumption worldwide is actually declining slightly, the market for two types of coffee — specialty or gourmet and organic — continues to rise. Specialty coffee represents approximately $14 billion USD in sales with organic coffee representing almost $1.5 billion USD in sales. The specialty market continues to grow due to a number of factors including an increase in home coffee consumption, new coffee venues and new coffee products aimed towards young people.

      Organic coffee has seen the largest growth in recent years with an impressive rate of 21 percent in annual growth from 2004 to 2009. By 2010 the organic coffee industry was growing at approximately four times that of the conventional coffee industry.

      By positioning your business to take advantage of the current trends in coffee, you help ensure that it will not only survive but flourish in the years to come.

      3.1 Gourmet coffee

      Gourmet coffee is made up of the arabicas, or high-grade coffee beans. Arabicas are much more flavorful and typically have less than half the caffeine of the robustas.

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