December 9, 2014

The Future Health of Your Business

News from above – by Phil Di Bella

As the year draws to a close, I always like to reflect on the evolving landscape of the coffee industry and the potential opportunities that will arise for cafés over the next five years. Cafés have largely been driven by our nation’s love for quality coffee and our ritual of enjoying the daily cup. Recent figures show that this will continue, with revenue expected to grow by an annual rate of 3.5% in the next five years to 2018/2019, totalling $6.3 billion dollars.
While the figures are promising, we are seeing the rise and fall of cafés, with approximately 30% failing in their first year. Low barriers to entry causes intense competition and over saturation in some café strips. Given this landscape, café operators need to evolve and seize every opportunity to improve their profitability. What can the café operator do to secure success? One answer is to capitalise on current and emerging Australian trends.

LIFESTYLE: It’s no secret that our industry is directly affected by the lifestyle habits of Australians. Reduced leisure time means that eating out is the new way families get together. Take advantage of this by ensuring your café accommodates seating for larger groups; better yet, offer a private room for functions.

HEALTH: Australians are becoming increasingly self-aware when it comes to health. Cafés that offer diverse menus with an emphasis on fresh, premium ingredients will see strong sales. Provide these nutritious offerings in take-home packs to capitalise on time poor customers who want to maintain healthier lifestyles.

ETHICAL CONSUMERISM: Customers are increasingly concerned about carbon emissions, climate change and consuming GMO free products, which is making them more willing to pay for coffee or food that has been ethically sourced.

TECHNOLOGY: Investing in the latest technology can increase brand recognition as well as improve business processes. Sale systems with electronic ordering that link to kitchens can improve service quality, reduce staff costs and customer waiting times. These systems provide better stock management, cash handling accountability, and help with staff training. The marketing functionality allows you to conduct direct customer communication campaigns, as well as provide data on customer spending. This will give you greater insight into understanding your customers and help to specifically tailor your products and services.
There’s no doubt social media sites are helping cafés boost sales, while other technology such as new culinary devices including automatic cutlery polishers and emersion circulators can help you save on labour, reduce wastage and improve your overall service levels.

CARBON FOOTPRINT: Reduce the footprint of your outlet. Large seating cafés will become rare as more cafés choose to downsize the overall space of their business. Consider sub-letting your space with another complimentary business, turning dead café space into retail opportunities, or opening smaller establishments or espresso bars.
No matter what future challenges arise, success depends on responding to emerging trends, utilising technology, and capitalising on new revenue streams. As café growth continues, so will the intense competition; building a resilient business is the only option that will lead to success.

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