Americans love coffee. A survey of 3,000 Americans by the National Coffee Association USA found that 62 percent drank a daily cup of coffee in 2017. That’s an 8.7-percent increase over the year prior and the first increase in daily consumption in four years.
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We’re also big fans of strong java here at Square. So we collected data from Square sellers across the country to learn more about how the magic bean is sold.
Here’s what we found:
Despite the craft coffee craze (which is partially responsible for the reversal in the four-year consumption decline), regular ol’ brewed coffee is still the caffeine-fiend favorite, composing 45 percent of coffee orders overall. Also popular? Lattes (16 percent) and americanos (11 percent), followed by cold brew and iced coffee (both 6 percent).
While brewed coffee will always be a mainstay, there’s growth in gourmet and specialty beverages, according to the NCA. So think about expanding your menu. If you don’t have one already, create a specialty drink or a house blend. You might also include a featured roast or blend each month, or highlight employee favorites. It’s a fun way to encourage customers to branch out and highlight what makes your shop special.
Not surprisingly, regular brewed coffee is the least expensive drink overall, while specialty espresso drinks and craft beverages rank as most pricey. It’s also not a shock that coffee shops on the coasts charge more for drinks than shops in other regions.
Of all the the drinks, cold brew has the biggest differentiation in price — $0.81 between the Pacific and Mountain regions. Iced coffee also has a large price differentiation — $0.63 between the Pacific and Midwest regions. Some of this may have to do with the seasonality of these products — consumers are more likely to buy cold brew or iced coffee in the summer than at other times of the year, so costs are raised to offset the lack of daily buyers. It may also be affected by the trendiness of those drinks on the Pacific coast.
You should evaluate your pricing frequently to make sure it doesn’t fall too far outside the norms in your community. Too high, you might miss out on customers; too low, you might not make your costs back.
Then again, if you live in a place where something like cold brew is really expensive, undercutting the price a bit in high seasons — and then promoting it — might bring in some new customers.
The average tip at a coffee shop varies across the country, with the most generous coffee shop tippers living in Delaware.
Interestingly enough, tipping at coffee shops is higher than tipping in other industries nationally. The average coffee tip nationwide is 17.2 percent, while the average restaurant tip is 16.4 percent. This could be because coffee shop patrons are often loyal to their favorite shop, or because a tablet-based POS system like Square has been shown to increase tip amount.
It never hurts to encourage tipping, so if you’re in a location where customers don’t tip much, these tried-and-true methods can help you increase tips for your employees.
Here are some other ways you can grow your coffee shop:
More people are drinking coffee, and that’s driven mainly by younger consumers. Open the door to millennials with specialty beverages and marketing that targets younger generations.
A customer appreciation party, tasting event, or fun workshop is a great way to engage customers, share your coffee knowledge, and quench their thirst for gourmet coffee varieties.
If you don’t have one already, implementing a loyalty program is a great way to encourage customers to get their daily cup of joe from you. Here are some best practices to build customer relationships and loyalty.
Don’t forget marketing
Creating a marketing plan for your coffee shop will help your business grow, and social media is an important way to reach your customers and a fun place to showcase what’s happening in your space. Whether it’s unique latte design or a cute dog outside your storefront, let your followers know what’s happening, and encourage them to share your space and your drinks with customized hashtags and location tags.