Has any business sector been more saturated than that of the coffee shop? Any major city features multiple street corners that have 2, 3, or even 4 shops at the intersection – many time even multiple stores of the same franchise. With this level of redundancy, one would think that the coffee shop is nearing its tipping point. On the contrary, more are being built all the time and franchise owners continue to rake in giant profits year in and year out. This begs the question: why? What is the appeal of these locations that people will wait in long lines to pay expensive sums (by coffee standards) to the degree that a franchise needs to open up multiple locations with a stone’s throw of each other?

It starts with the products themselves. Coffee is the world’s second most consumed beverage (after water). The business model has proven that people want GOOD coffee. While instant may work for some consumers, there is definitely a different market segment – much larger than a niche – that wants quality coffee from a quality brewer. They want that premium cup and are willing to pay a premium a price for it – and a premium price is what is charged. However, maybe more important than the quality is the variety that is available. Anybody can get a cup of instant coffee from any number of sources, but to get the various flavors (vanilla, chocolate, caramel, etc.) and types of beans, that is more difficult to obtain than simply strolling down the aisle at the local grocer. Beyond the variety of coffees, most of these shops also offer teas and other beverages. For those in need of breakfast, there is also usually a selection of pastries and snacks available. In that way, the shop features more a niche restaurant than as a glorified beverage stand.

Yet, people come for more than just the primary product. Coffee shops are about more than just the coffee – there is also an aura associated with the stores themselves. Why else would one of the most popular sitcoms in history feature a coffee shop as one of the primary meeting places for its characters? Beyond just the typical cafe chairs and tables, many of these stores feature couches and (no irony intended) coffee tables. It is about more than just consuming the product; it is also about providing a gathering location for a niche of its clientele. They also typically feature free Wi-Fi – I challenge you to find me a coffee shop during peak hours where there are not at least three patrons surfing their laptop or IPad.

Coffee shops essentially boil down to an either you get it or you don’t type of appeal. To a certain percentage of the population, they see two stores of the same franchise located right across the street from each other and it just doesn’t make sense (and never will). To others, not only will they patron one of those stores, but they will be fiercely loyal to it and never visit the other under any circumstances. While that may seem like a strange opinion, it is more common than you’d think. How else do you explain the success?

Author Bio: Sites of note:
Starbucks – Coffee House King
Gallins – Gourmet Coffee Vendor
Keurig – Single Cup Brewers

Category: Food and Drinks
Keywords: Coffee, coffee shop, gourmet coffee