Coffee Shops and Coffee-To-Go (Takeaway) Market

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Coffee Shops and Coffee-To-Go (Takeaway) Market

Key Takeaways

  • The average monthly salary for a barista in Guatemala is about 4,120 GTQ ($535.18). That should be about 49,440 GTQ ($6422.18) per year using current exchange rates.
  • The top five coffee shop brands in Guatemala are Cafe Cafe Guatemala, Cafe Las Marias, Ciao Cacao Hostel & Cafe, Cafe Loco coffee roasters, and Cafe Loco.
  • The Mexican market for coffee shops was about $695 million in 2018 and is projected to hit $828 million by 2023.

Introduction

After an exhaustive search, most information specific to the coffee shops market in Guatemala are publicly unavailable. We could only find, for Guatemala, the average salary of a barista and the top coffee shop brands in the country. However, we expanded the scope of this research to North America and Mexico to provide alternative insights into the coffee shop market as available. Details of our findings are as follows:

Average Barista Salary

  • The average monthly salary for a barista in Guatemala is about 4,120 GTQ ($535.18). That should be about 49,440 GTQ ($6422.18) per year using current exchange rates.
  • In Mexico, the average salary for a barista is about $73,877 per year.

Capital Expenditures (CapEx) and Operating Expense (OpEx) for an Average Coffee Shop

  • While data specific to Guatemala is not available, a publication by Investopedia estimates that the cost of setting up a sit-down coffee shop can be between $200,000 to $375,000.
  • Furthermore, it could cost between $80,000 to $200,000 to set up a drive-through coffee shop.

Cost of Goods Sold (COGS) for a Cup of Coffee (Cappuccino)

  • According to an analysis on Starbucks that was published by George Benaroya, the estimated COGS of a cup of cappuccino in Manhattan, U.S. was provided as follows:
    • The estimated cost of Starbucks' coffee, milk, and sweetener is $0.36. If it costs $0.56 to cover for barista, cashier, support staff, and other operating costs, as well as about $0.08 for cup, stir, and lid, this means that the direct cost of a cup of cappuccino at Starbucks is about $1 (i.e $0.36+$0.56+$0.08).
    • The company reported in 2018 that the annual selling, general, and administrative expenses (SG&A) cost about 15% of sales or $0.64 per cappuccino.
    • The analysis by George estimates the cost of rent to be about $2.89 per hour and $9 for 3 hours based on rents in midtown Manhattan is $878 per square foot as at the time of the analysis and including 20% for utilities, depreciation, and other expenses. The analysis used a "nationwide average of 15 square feet, at an annual cost of $15,800 per seat." Assuming the location in Manhattan runs for 15 hours a day, the cost per hour would be $2.89. Therefore, staying for 3 hours amounts to $9 for rent.
    • The analysis also considered $1 for marginal cost.
    • This brings the total cost of a cup of cappuccino at Starbucks to about $10.3 as can be seen in the picture below.

Margins for a Cup of Coffee (Cappuccino)

  • While data on the margins for a cup of cappuccino is not publicly available, our research found that the average profit margin for a small coffee shop is about 2.5%.
  • A separate report hinted that "most cafes run at a gross margin of 75-80% or even higher. In spite of this, the operating profit is less than 2% for most coffee shops."

Coffee to-go Market Size (Branches/Drive-Through) Point of Sales

Due to the unavailability of data specific to the size of the coffee-to-go market, including drive-through and branches in Guatemala, we have provided market size insights on North America and the U.S. as an alternative.
  • According to our research, the global market for coffee shops was worth about $192.10 billion in 2020. However, the North American market was worth over $36 billion in the same year.
  • The Mexican market for coffee shops was about $695 million in 2018 and is projected to hit $828 million by 2023.
  • Furthermore, the North American restaurant POS market is projected to hit $2,101.65 million by 2028 at a steady growth rate of 7.4% from 2021 to 2028. This implies that the market was worth about $1,275.06 million in 2021 using an online CAGR calculator.


Main Players

Coffee shops brands
  • Based on 158,385 reviews, from 693 coffee shop brands in Guatemala, the top five brands in the country are:
    • Cafe Cafe Guatemala: rated 5 out of 5
    • Cafe Las Marias: rated 4.9 out of 5
    • Ciao Cacao Hostel & Cafe: rated 4.9 out of 5
    • Cafe Loco coffee roasters: rated 4.8 out of 5
    • Cafe Loco: rated 4.8 out of 5
Coffee machines used (brands)
  • According to a ranking published by TechRadar, the top 5 coffee maker brands, though with no specificity on the country, are:
    • Breville Bambino Plus: rated 4.5 out of 5
    • De’Longhi Dinamica Plus: rated 4.5 out of 5
    • Breville The Oracle Touch: rated 4.5 out of 5
    • KitchenAid Classic 5KCM1208 Drip Coffee Maker: rated 4 out of 5
    • Nespresso Vertuo Next: rated 4 out of 5

Common Business Model for Coffee Shops to Engage With Coffee Machines Providers

Note that while information specific to the business model for coffee shops is largely unavailable, we have provided information on a business model in general which can be attributed to a coffee shop.
  • According to a publication by Funds Net Services, a solid business model should communicate the following points about a business:
    • The product and service the business would offer. In this case, coffee.
    • How is the product/service going to be marketed?
    • The likely cost implication of the business.
    • How is the business going to be profitable?
  • There are different types of business models including subscription model, bundling model, freemium model, leasing model, and others.
  • For a coffee shop, the suitable business model could be a bundling model where the strategy allows for the convenient purchase of several products such as coffee and snack from one business; or the franchise model which is an "established business blueprint that is simply purchased and reproduced by the buyer, the franchisee."
  • Key components of a business model include:
    • The value proposition of the business
    • The target market
    • Competitive advantage
    • Cost
    • key performance metrics
    • Resources
    • Problems and solution
    • Revenue model and revenue stream
    • Profit margin
  • Finally, choosing the best business model is dependent on factors such as the target audience and how the product would benefit them; the start-up cost including the fixed and variable expenses and how to generate the finances; and if the business needs investors to raise finances.

Research Strategy

To provide insights into the coffee shops and coffee-to-go market in Guatemala, we commenced with an exhaustive search through expert reports, statistical databases, industry reports, and articles from reliable sources specific to Guatemala such as Statista, Salary Explorer, Salary Expert, and others. However, the only data specific to Guatemala that we found was the average salary of a barista and the top coffee shop brands in the country.

With relevant information related to the coffee shops market in the country largely unavailable, we expanded the scope of our research to include Mexico. We found relevant a couple of data on salary and the size of the coffee shops market in Mexico but didn't find other useful data.

Next was to expand to North America where we found other useful details such as the size of the coffee shops market in North America and the COGS and other financial data for the U.S.

In the course of this research, we didn't find a publication on the common business model to engage coffee vending machine markers in the public domain. Therefore, we have provided an overview of a good business model in general terms as an alternative.

Note that we have used information from a couple of sources older than 24 months for this research. While this is below Wonder's standard for credible and recent sources, we have used these sources because of the limited availability of recent data in the public domain for this topic.

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