Coffee crowd: Rising demand and an influx of new operators have led to strong competition

The Cafes and Coffee Shops industry has grown moderately over the past five years, supported by Australia's vibrant coffee culture. Industry revenue is expected to grow at an annualised 2.2% over the five years through 2018-19, to be worth $9.8 billion. This includes anticipated growth of 1.3% in the current year. Despite the industry's positive revenue performance over the past five years, competitive pressures have pushed profitability down over the period.Australia's coffee culture, and its growing number of speciality cafes and coffee shops have contributed to high industry competition, low barriers to entry and low industry concentration...read more.

Industry Statistics & Market Size
Revenue
$10bn
Annual Growth 14-19
2.2%
Forecast Growth 19-24
Profit
Employment
139,091
Businesses
20,375
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • The growing number of speciality cafes and coffee shops has contributed to strong competition
  • A trend towards premium food has been reflected in the changing products offered
  • High demand for coffee and the affordable nature of most industry products will support growth
  • Industry Report - Industry Analysis Chapter

    Australia’s robust coffee culture has driven the success of the Cafes and Coffee Shops industry over the past five years. Operators have benefited from Australia’s love of quality coffee, which has supported the industry’s growth over the period. Industry revenue is expected to grow at an annualised 2.2% over the five years through 2018-19, to be worth $9.8 billion. This includes anticipated growth of 1.3% in the current year, as consumers continue to seek out high-quality coffee.Resilient consumer demand for high-quality and convenient food and drinks has fuelled the industry’s success. While spending on cafe and coffee shops is discretionary, many consumers consider coffee an affordable luxury. Consumers are therefore often unwilling to forgo their daily coffee. Thi...purchase to read more.

    Additional Insights for the Cafes and Coffee Shops Industry

    IBISWorld has determined the most important Key Success Factors for the Cafes and Coffee Shops are:

  • Business expertise of operators
  • Effective cost controls
  • Effective quality control
  • IBISWorld analysts also discuss how external factors such as Expenditure on recreation and culture and Real household discretionary income in the Cafes and Coffee Shops industry impact industry performance..

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    What's in this report

    What is the Cafes and Coffee Shops Industry?

    The industry includes cafes and coffee shops that serve food and beverages to customers on premises. Customers generally order and are served while seated and pay after eating. The industry excludes operators mainly engaged in takeaway food services, restaurant and catering services, the operation of theatre restaurants and selling alcohol for consumption on and off premises.

    Industry Products
  • Coffee
  • Other beverages
  • Food
  • Industry Activities
  • Cafe operation
  • Coffee shop operation
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Expenditure on recreation and culture
  • Real household discretionary income
  • Demand from restaurants
  • Consumer sentiment index

  • Current Performance
  • Positive trends
  • Profitability
  • Coffee culture
  • Chart: Revenue Growth

  • Industry Outlook
  • Convenience
  • Competition
  • Opportunities
  • Table: Cafes and Coffee Shops Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Cafes and Coffee Shops Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Dairy Produce Wholesaling
  • Fruit and Vegetable Wholesaling
  • Liquor Wholesaling
  • Meat, Poultry and Smallgoods Wholesaling
  • Tea, Coffee and Other Food Manufacturing

  • Products & Services
  • Coffee
  • Food
  • Other beverages
  • Chart: Cafes and Coffee Shops Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • People aged 35 to 54
  • People aged 15 to 34
  • People aged 55 and over
  • Chart: Major Market Segmentation for the Cafes and Coffee Shops Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Cafes and Coffee Shops

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Cafes and Coffee Shops Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Cafes and Coffee Shops Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Cafes and Coffee Shops Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Coffee Chains
  • National or multinational networks of coffee shops that often feature seating and a range of snacks and hot and cold beverages.
  • Fair Trade
  • Coffee sourced from developing nations at fair prices, ensuring better wages and conditions for workers.
  • Food Service
  • The provision of meals for customers, usually accompanied by alcoholic or non-alcoholic beverages.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Cafes and Coffee Shops market research report is a comprehensive guide to market size and growth prospects. Our industry reports offer strategic industry analysis of the factors influencing companies, including new product developments, economic, lifestyle and demographic influences, distribution and supply chain factors and pricing issues. Full analysis accompanies our data forecasts to illustrate how the market responds to emerging industry trends.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Cafes and Coffee Shops:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Cafes and Coffee Shops market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Cafes and Coffee Shops, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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