Coffee Service Industry Has Spoiled The Customer: Profitability Is Today’s Challenge

Coffee service operators should give themselves credit. They learned from the mistakes they made years ago and the commitment to quality service since then has paid off.With coffee prices rising, operators have been able to pass on the increases without suffering large scale resistance. They have not engaged in a price war as they did when coffee prices spiked a few decades ago.Which is not to say the current situation is easy. Profit margins are hurting.In markets where single-cup has become the preferred format, profit margins are particularly strained, due to the dominance of market leaders.The big question is: Do operators have the sales skills to utilize alternative single-cup coffee systems?Alternative portion control, single-cup systems have been introduced. Unfortunately, some brewer manufacturers brought their systems to market prematurely when they introduced them seven years ago. It has taken years to correct this mistake.With customers looking to reduce their costs but still get a quality cup of coffee, operators have an opportunity to sell alternative systems.What many are finding is that customer loyalty to existing market leaders presents a formidable challenge if they want to offer alternative systems. Customer expectations have improved to the point that they will not compromise quality, but they want it at a better price.Coffee service operators can congratulate themselves for creating a higher appreciation for their service. Providing that service in a way that allows them to sustain profitability presents a new challenge.Fortunately, coffee service operators have more options available than ever, and some outstanding educational opportunities to help them meet this challenge.