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

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.

 

Source

 

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

• 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

• 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

• 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

• 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

 

Source

 

• 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