Cara McHugh opens the lid of the lucrative coffee trade.
What's an essential pre-class companion and a highly coveted item on campus? You guessed it, coffee! Whether you fancy it iced or with alternative milks or syrups - there really is a caffeinated concoction to satisfy every taste bud. But have you ever thought to tally up the cost of these seemingly ‘harmless’ coffee runs which occur several times a week?
Fear not, as I have saved you the dooming calculations - if you spend a mere €2.50 on a takeaway coffee five times a week, it will add up to the hefty sum of €600 annually on your morning fix. It's also worth noting that €2.50 is a relatively modest price for a cup of coffee nowadays. However, for those who indulge in pricier options like iced coffees, which can go for as much as €4 each, their yearly expenditure on the black gold could be as high as €960. While these may be concerning figures for consumers that can’t go without their daily rocket fuel, it is something that the realm of commerce has reaped the benefits of.
The organic coffee company Esquires highlights that coffee shops boast considerable profitability thanks to their high-profit margin and low cost of stock. These profit margins often exceed 90%, demonstrating the financial gains in the industry. According to a survey conducted by the coffee researching company BrewSmartly in 2022, these figures could particularly benefit the economy of our nation’s capital, as Dublin ranks as the Second most Coffee-obsessed capital in Europe. As of last December, the coffee-shop market in Ireland is worth an impressive €1 billion euro. However, contemporary market value has proved to be interchangeable through the influence of social media and marketing. Indeed, a company that has recently seen its market value historically plunge is Starbucks, as the Boycott movement in support of Palestine, brewing from a solidarity tweet, encouraged people to disassociate with the business. However, it was recently reaffirmed that the corporation was never featured on the BDS list to begin with as it did not fit the movement’s criteria. The exploitative nature of the working conditions found in Starbucks is subject to scrutiny and encouraged boycott.
Coffee shops boast considerable profitability thanks to their high-profit margin and low cost of stock.
The Economic Times have reported that the firm has since been hit with a whopping $11 billion value loss, showcasing the effects social media can have on business and marketing.
In the midst of today’s thriving coffee industry, numerous coffee shops faced a plummet in their marketability during the Covid-19 pandemic and subsequent lockdown. Entrepreneurial minds transformed their bitterness into an opportunity to capitalise on the strict takeaway regulations imposed by the government. As a result, horseboxes and vans were converted into snug coffee docks, a trend that continues to this day. Coffee hubs are still prospering in today’s market, owing to their avoidance of high rental costs for a fixed location and their flexibility of setting up shop in different locations.
Coffee hubs are still prospering in today’s market, owing to their avoidance of high rental costs for a fixed location and their flexibility of setting up shop in different locations.
To maintain their marketability, modern coffee businesses must be responsive to the trending demands of social media. They must ensure they resonate with today’s trendsetters by adapting to changing tastes, in both liquid and advertising forms, in order to connect with the ‘cool kids’ of today. Marketing of coffee has also recently become an integral part of generating revenue in the industry, even if it simply involves having an active instagram account that can foster engagement.
Fatigued UCD students are fortunate to have multiple coffee docks that they can power up from, but let’s be mindful not to break the bank with our cravings!