Filipinos are a nation of coffee lovers, with 9 in 10 households saying that they regularly consume the hot beverage, according to the Business Mirror. Due to the growing coffee consumption trend in the country, the Senate Committee on Agriculture and Food states that the nation is drinking 95,000 metric tons more today than they did in 2002. And this is all good news if you’re a Filipino entrepreneur as this growing coffee habit provides the perfect opportunity for you to launch your own coffee business and earn a sizeable living.
An affordable startup
The most popular type of coffee chain in the Philippines is the traditional coffee shop. Manila is one of the most sought-after coffee hotspots in the Philippines currently and is home to multiple unique coffee stores. The Business Times reports that ‘the most Instagramable coffee shop’ Coffee Project, handmade coffee store Firefly Coffee, and the innovative Jiro Coffee Studio are some of the most frequented coffee shops in the city due to them standing out from the crowd.
However, this type of outlet can have a sizeable outlay when you factor in the cost of tables, chairs, restrooms, cleaning, and upkeep. These factors are one of the reasons why Farwa and Ronnel Hombre opted to set up a simple kiosk in the U-Belt area in the city of Manila in 2009. At the time, the college students were keen to tap into the student market and offer affordable coffee to people like them. As a result of their lower overhead costs, the couple were able to sell frappe for half the price of the big coffee chains in the area, and this led them to go on to open a further 234 branches to date.
With this in mind, affordable startup options include launching your own coffee kiosk in a thriving area in the Philippines which isn’t already overloaded with affordable coffee options. Alternatively, buying into a franchise is another option to consider. The Hombre’s franchising opportunities start at Php 699,999 and promise to help you get your coffee business up and running. Other franchises across the Philippines include Star Frappe, Mocha Blends Cafe, Seattle’s Best Coffee, Coffee Break, Coffee Bean & Tea Leaf, and Figaro Coffee.
Millennials are driving the coffee market in the Philippines, according to Evelyn Laviña of the Agriculture Undersecretary for High-Value Crops. She says that they’re willing to pay up to P100 for a cup of coffee, with American brands being their top choice. As such, it’s crucial that you offer the public what they want. You’ll likely need to import coffee anyway due to the Philippines being unable to produce anywhere near the 100,000 metric tons plus a year that the nation is drinking. With this in mind, make sure youthat you know will sell, such as Keurig, Folgers, Maxwell House, Green Mount, and Seattle’s Best.
Coffee doesn’t have to be fair trade
For years, going fair trade has been championed around the world due to it providing farmers with the opportunity to live a better quality of life, in addition to enhancing the quality of the coffee beans that they produce. This is due to fairtrade coffee farmers typically plowing 25% of their fair trade earnings into boosting the standard of their beans. Yet, multiple studies show that fair trade benefits don’t impact poorer farmers. Research conducted by U.C. Berkeley and Craig McIntosh at U.C. San Diego looked at 13 years’ worth of data and concluded that any economic benefits were outweighed by the cost of participating in the fair trade program. To maximize your earnings, it’s worth avoiding fair trade varieties which usually cost more due to the minimum fair trade price set and consider alternative types of coffee which offer great taste and return on investment instead. What’s more, it will benefit farmers on lower wages too.
Make it a roasted & ground blend
Raul Paz of PhilMech states that Filipino’s enjoy nothing more than a good cup of roasted coffee. “There are lots of coffee shops in the country. There is a growing demand for the roasted and ground coffee, and the value is higher than the green beans.” It’s, therefore, a wise idea to offer multiple roasted varieties so that you can cater for all of your customers and make as much profit as possible. This means you’ll need to invest in light roasted, medium roasted, and dark roasted coffee beans.
Educate the public on the benefits of drinking coffee to sell more
Coffee is often given a bad name due to its high caffeine content. In addition, research links coffee to several different health conditions, including sleep impairment, heartburn, and heart palpitations. It’s also been advised that coffee drinkers should stick to a mere 4 cups per day. However, new research has revealed that 25 cups per day has no negative impact on the heart. What’s more, studies highlight that coffee consumption can reduce the risk of conditions, such as:
- Type 2 diabetes
- Parkinson’s disease
- Alzheimer’s disease
- Multiple Sclerosis
- Cardiovascular disease, and;
- Some cancers
While preaching to your customers about the benefits of drinking coffee probably isn’t going to convince them to buy another cup of it off you, clever marketing highlighting these facts will. Posters in your shop window or around your kiosk containing fun facts, will grab the attention of passers-by. Meanwhile, printing facts onto every coffee cup that you hand out will ensure that each customer you serve is well-informed and tempted to buy another cup or two from you.
Coffee is a much-loved beverage in the Philippines. As a result, it’s the ideal business venture to set up as it’s sure to make you money. But, to ensure that your coffee business is as profitable as can be, it’s worth thoroughly researching the local market, so that you’re offering Filipino coffee-drinkers what they want at a price which will keep your bank balance healthy.