A menu can make or break a business.

After all, it is the menu, along with branding and service delivery, that first attracts, then satisfies and, ultimately, retains customers.

For a specialty coffee shop, it is no different. For these establishments, a solid menu sits at the intersection between buying top-quality coffee and catering to customers’ preferences.

As such, a menu should be varied in flavour and type, offering both new and unique drinks, as well as traditional options such as lattes and cappuccinos – two of the most popular coffees in the world.

It should also take consumer demands for qualities such as sustainability, a key consideration for 85% of consumers according to the Global Sustainability Study 2021, into account, all while being profitable.

Finding that sweet spot is an ongoing challenge for coffee shops.

But creating an excellent specialty coffee shop menu isn’t impossible. For instance, combining in-season single-origin coffees with a signature blend is an easy and effective way to simultaneously build a strong brand and cater to different tastes.

Additionally, to attract younger consumers, a menu should include decaf coffee options, ready-to-drink (RTD) coffee products and a good selection of plant-based milks.

While more traditional coffee consumers may look down on decaf coffee, it is a growing trend among millennials who favour healthier food and drink options, with the decaf market share expected to reach $2.8 billion by 2027.

Another burgeoning trend among this younger generation of coffee consumers is the consumption of RTD coffees such as cold brews and iced coffee.

Although neither is exactly new, their rediscovery has attracted young consumers, looking for alternative ways to enjoy coffee-based drinks.

Beyond freshness: The importance of buying seasonal coffee

For specialty coffee shops, purchasing seasonal coffee is key.

It’s especially vital for coffee shops that rely on single-origin coffees.

Coffee is harvested once a year, with the harvest season lasting approximately two to three months. Harvest times depend on geographical location and, as such, sourcing fresh coffee from a single location year-round is impossible.

This allows shops to consistently offer a fresh, quality, traceable product. In addition, making coffee production more transparent creates a more engaging experience for consumers curious about the process.

According to Saigopal Medepalli, one of the owners of Bean Theory Coffee, when customers “understand the minute details behind cultivating, processing and roasting coffee, they appreciate the cup even more. Especially single origin coffees – we always have customers who are very interested to know the source of the coffee.”

In this regard, buying seasonally enables coffee shops to implement several advantageous business tactics simultaneously.

First, it allows shops to regularly update their menu and better cater to consumers looking for novelty while also catering to seasonal preferences. (It, of course, also ticks the all-important sustainability box for customers).

Second, buying seasonally reduces the risks related to coffee storage, such as damage to the beans and fading flavour profiles.

Last, buying seasonally expands a coffee shop’s network, connecting them with a wider community of coffee producers, which can help nurture a broader, more robust business network.

It is evident that buying seasonally available coffee is a business decision that hugely impacts coffee shop operations. As such, it is crucial that specialty coffee shop owners train baristas and other personnel about the benefits of offering single-origin coffee that is in season rather than coffees from a specific region.

House blends: A recipe for success

Technically, specialty coffee roasters have been selling blends for decades.

That’s because of the ambiguity of the term “single origin”. For some, it refers to coffee from a single geographical region or country; for others, it refers to beans sourced from a single plantation.

As such, many coffee shops and roasters have been selling mixed beans from the same country as a single-origin coffee rather than a blend.

While single origin’s reputation has been growing from strength to strength over the past decade, blends have only recently renewed their standing, shaking off the yolk of being “less than”.

This is in large part due to the growing popularity of specialty blends in coffee competitions and the opportunity it offers baristas to better communicate their style, skills, and character.

Alongside baristas, specialty coffee roasters and shops are participating in this trend, offering signature blends created with top-quality coffee beans.

Traditionally, blends were looked down on because of their lack of traceability and poor quality. Yet, blends aren’t synonymous with substandard coffee anymore. In addition, a house blend can be a key market differentiator.

“Every coffee shop should have a signature blend”, Saigopal says. “That’s what makes a coffee shop unique.”

Continuing, Deepika Gowda, co-owner of Bean Theory Coffee, explains that it was easier to offer a signature blend than single-origin specialty coffee when they opened their coffee shop.

“Being the first specialty coffee shop in town, we marketed our coffee in that manner,” Deepika says. “It made it easier to explain to our customers why our coffee was different from the Starbucks next door. Nobody understood what it meant when we said: ‘It is a specialty coffee’.

“But they instantly understood it was unique when we explained that the house blend was our signature coffee. Of course, we also had to explain what specialty coffee was (we still have to) but having a signature blend helped us gain popularity and get a consistent cup every time.”

From homes and hotels to offices and airport lounges, there are few places that coffee capsule machines have not penetrated. Convenient, consistent, and versatile, they have come to characterise the quick, on-the-go lives of modern day consumers around the world.

The concept of coffee capsules – predosed ground coffee in a capsule or “pod”– first appeared in the 1970s. However, it wasn’t until the early 2000s that their popularity soared. Today, the global market is worth several billion dollars, with forecasts that it could hit almost $10 billion by 2032.

As part of this growth is the increasingly ubiquitous “specialty” coffee capsule. Defined as coffee with a SCA score of 80 or more, specialty coffee capsules tend to offer a superior flavour profile to commodity capsules and include a wider range of varieties, including Gesha and Red Bourbon.

Spencer Turer is vice president of Coffee Enterprises, a major consulting firm offering technical and business advice to coffee and tea companies. He believes that the drive for specialty coffee pods is linked to consumers’ rising demand for better quality coffee.

“The consumer started talking about how we can get a better coffee cup,” Spencer explains. “They asked why there aren’t enough options for the single-cup consumer compared to bagged coffee or other retail coffee products.”

In response, coffee capsule manufacturers changed direction. “In the last ten years, the market has changed,” he continues. “It went from an emerging market with machines, cups, and pods to a mature market.”

Stealing market share

The introduction of specialty coffee roasters to the capsule industry has changed the market landscape. Where before the only options in supermarkets were ground and whole bean bags of coffee, now, specialty capsules are increasingly occupying shelf space.

This trend was only furthered by the outbreak of Covid-19 in early 2020. With up to 95% of all hospitality businesses forced to close their doors at some point during the pandemic, consumers had little choice but to brew coffee from the comfort of their home.

Coffee capsule machines offered the convenience and affordability that many were looking for. But in order to recreate their coffee shop favourites, there was also a simultaneous jump in demand for better quality coffee. Noticing this, a number of coffee brands, which had previously steered away from the capsule format, began to launch their own versions.

“We saw more specialty coffee brands embracing the single-cup system,” Spencer explains.

Although some had previously criticised the ability of capsules to preserve freshness, many found that the single-dose format ensured that oxidation didn’t occur. It also allowed roasters to control the way customers brewed their coffee, something that hadn’t previously been possible.

“Our mission is to get more people drinking and appreciating specialty coffee,” Roastworks, a UK specialty coffee brand, wrote on its website shortly after launching its own range of capsules. “And what better vehicle to help us do this than with capsules?”

Saturation point

When the first specialty coffee capsules arrived on the market, theretheir was an air of excitement around their potential for consumers.

No longer restricted to a handful of coffees selected by the machine manufacturers, people could enjoy a selection of high-quality cup profiles from their favourite roasters.

However, as the market becomes increasingly saturated, the conversation has shifted from quality to other areas, such as sustainability and traceability. This is particularly in the face of criticism around the use of aluminium pods and their impact on the environment.

“The future of single-cup coffee is one that’s more sustainable, more environmentally friendly footprint,” Spencer says. “We’re going to see conversations about the carbon footprint, not just for the manufacturing and the distribution, but also around how efficient the brewing equipment is.

“We’re also going to be questioning everything that we’re doing because the consumer is much more educated today. They want to make decisions on all of the products that they’re buying, whether it be equipment, food, or beverage products that make them feel good about their purchases and are consistent with their ideals.”

Although Spencer believes the capsule industry will continue to grow as new consumers enter the market, an attractive alternative for places such as offices, hotels, and restaurants is superautomatic coffee machines.

Offering the same one-touch convenience as capsule machines, superautomatics, such as the Carimali Silver Ace, can handle any whole bean coffee and milk to create consistently high-quality cups of coffee. Their ability to steam milk opens up a wider menu for businesses without needing a barista on hand.

What’s more, as the capsule industry continues to fend off doubts around sustainability, it’s likely many brands will start to renew their focus on the whole bean format – and will undoubtedly look to other convenient options to complement it.

Some time ago, the buzz of scooters in an Asian metropolis was just a familiar hum in the background of many peoples’ lives. Today, it heralds the arrival of anything from an Alibaba package to a Happy Meal – and even a piping hot cup of coffee.

Coffee delivery apps enable movement-restricted customers to order coffee online, mostly using a mobile device. To make this possible, millions of delivery workers use a separate app to receive the orders and pick them up at the customers’ favourite cafés.

The companies operating these services are only getting stronger, building a complex business ecosystem that has allowed coffee businesses to survive even throughout the Covid-19 pandemic.

This is particularly true in consuming countries such as China, Singapore, and Malaysia, where scooters and motorcycles are already prevalent.

Coffee delivery apps have a unique challenge when compared to conventional delivery apps. Many products can be delivered in a couple of days without any consequence, but food delivery standards are much higher.

Moreover, coffee is particularly delicate, as it’s best served fresh and hot – with the exception of cold brew and iced coffee, of course.

Customers have specific expectations about how coffee should taste, look, and feel. These aspects become vulnerable during delivery, meaning that customers may receive a drink that offers a very different experience to being served at a café.

Back in 2015, long before the global pandemic, large coffee chains like Starbucks and Dunkin’ Donuts began offering mobile apps for takeaway coffee drinks in the United States. Although it was perhaps an underused service at the time, it’s evolved to meet the needs of coffee lovers around the world.

The meteoric rise of coffee delivery apps in Asia

A new generation of coffee drinkers has been entering the Asian market during the past decade or so. According to Mauricio, this new client demographic comprises men and women between the ages of 30 and 45, who are typically white-collar workers.

One of the leading players in coffee delivery is Luckin Coffee, which bounced back from a major financial scandal in 2020. Mauricio says that it has now overtaken Starbucks in terms of the number of stores it has in China.

“Chinese coffee chains like Luckin and Manner offer high quality coffee, superior to what other foreign coffee shop chains are serving,” he tells me.

Furthermore, the growing customer base for high quality coffee in Asia is directly linked to the availability of mobile delivery apps. Combined with the fact that most Asian countries imposed strict lockdown measures during the Covid-19 pandemic, freshly brewed coffee at cafés wasn’t – and still isn’t – a viable option for most customers.

In Singapore, for example, the food delivery app user base grew from 900,000 in 2017 to 2.5 million in 2021. By 2025, this number is forecast to soar to nearly 4 million.

In Malaysia, food delivery app revenue is expected to grow almost 10% year-on-year between 2022 to 2026, according to recent estimates.

By nature, the digital business ecosystem is adapting to capitalise on these new opportunities. Tencent and Alibaba in China are competing to get their share, with each service partnering with a range of café chains.

Even Delivery Hero, the Germany-based global leader in food delivery apps, entered the market with Foodpanda. Meanwhile, Gojek and GrabFood are expanding across South East Asia, too.

While Starbucks and Luckin Coffee have drawn the most attention, other local companies have also benefited from the boom. Flash Coffee from Singapore secured a multi-million dollar investment in 2021, enabling its expansion ino other markets such as Indonesia, Thailand, Hong Kong, Taiwan, and South Korea.

Similarly, Shanghai coffee shop chains attracted significant investment in 2021. Manner Coffee, for example, increased its market value to $2 billion after three financing rounds, while M Stand raised $94.5 million.

However, this rapid growth is not without its challenges.

“Beyond the digitalisation that has helped during the pandemic by creating new jobs in different fields, these coffee shops rely on small outlets with few options sold online through these apps,” Mauricio explains. “A small coffee shop of 7m² needs to sell more than 4,000 cups monthly to survive and bear the fixed costs of rental and wages.”

Asia’s coffee evolution: Quality & quantity

It would be an understatement to claim that the scale and complexity of the coffee industry in Asia are hard to grasp. Shanghai, for instance, recently became the city with the most coffee shops in the world with around 7,000 cafés.

This may seem strange to many people, especially considering China is traditionally a tea-drinking nation. However, it’s even more noteworthy when comparing coffee drinking habits in China’s different regions.

According to a report by Deloitte, coffee consumption varies wildly between mainland China and the big cities. The report claims that the average annual coffee consumption in the Chinese mainland is nine cups per capita.

In contrast, this figure sits at 326 cups in the largest cities. To put that in perspective, it’s close to the average coffee intake in the United States, which is 329 cups per capita per year.

On the other hand, Singapore and Malaysia are changing their coffee drinking habits in different ways. Kopi is the traditional coffee drink in Singapore and Malaysia, consisting of a highly concentrated brew mixed with sweetened condensed milk and dozens of other ingredients.

Recently, however, Singapore’s high-quality coffee consumption has increased, changing the café landscape and catering to a new segment of young coffee drinking professionals.

In Malaysia, something similar is happening. Malaysia has a strong tradition of liberica production, a coffee bean mainly consumed in Malaysia and the Philippines. There are few published quality standards for post-harvest liberica processing and roasting, making it difficult to offer high-quality coffee drinks at a competitive price.

Even with such vastly different coffee industries, however, China, Singapore, and Malaysia share a unique interest in coffee delivery apps that has lured in billions of dollars in investment and addressed the largest untapped market of potential coffee drinkers.

It’s also worth noting that Asia’s specialty coffee newcomers and those in Western countries have very different coffee cultures.

“The main difference relies on the perception of that ‘third-space’ that a traditional coffee shop offers,” Mauricio explains. “In China, it might be important in the next year to continue these strategies as Covid-19 restrictions are still strict. At the same time, in the West, coffee is more a social experience consuming the experience of a nice cup away from the in-home consumption.”

In the meantime, Asia’s digital business landscape keeps evolving. For now, it’s hard to predict if a similar trend will unfold in the West.

“More than looking at this phenomenon as Eastern vs Western culture, it’s important to look at it from the coffee producer vs coffee consumer perspective,” Mauricio concludes.

The current behaviour of big global technological players suggests that competition will be stiffer in the years to come. Meanwhile, we are left to ponder whether the coffee value chain will be ready for these changes when the time comes.

Nowhere in the world is the espresso more highly regarded than in Italy.

Consumed daily by more than 90% of the population, it is more akin to an institution than a beverage. Indeed, in January 2022, an application for Unesco heritage status was made, claiming that the espresso’s cultural standing made it “much more than a drink”.

As well as being considered an essential good, it helps build relationships and promote social interaction. As such, it is often consumed out of home, including at coffee bars and workplaces. According to data from the International Coffee Organization (ICO), 73% of Italian consumers drink coffee outside their homes.

“In Italy, we don’t say ‘Let’s meet’,” says Francesco Sanapo, who runs a café and roastery in Florence. “We say, ‘Let’s have coffee’.”

To maintain this crucial aspect of Italy’s espresso drinking culture, it was traditionally rare to find anywhere outside of key tourist locations that charged more than €1 per espresso. This was in spite of an average inflation rate of 2.63% between 2002 and 2012.

However, in recent years, the price of an espresso has jumped. In 2020, Italian consumer group Codacons filed a complaint against the rising prices of espresso. Among other things, it had noticed that the price of an espresso in the centre of Rome had leapt from a pre-Covid average of €1.10 to €1.50.

This followed a similar complaint in 2018, in which the same group claimed Starbucks was “causing damage to Italian consumers” by charging above market prices for its coffees.

Although the outbreak of Covid-19 is partly to blame, some have identified a more subtle change not only in Italy’s espresso culture, but in its attitude to the quality of coffee across the board.

Why are prices rising?

According to Professor Jonathan Morris, reactions against bars deemed to be charging excessive prices are proof of the extent to which out-of-home coffee consumption is considered as an integral part of Italian existence.

As something so deeply rooted in the nation’s cultural identity, it is almost seen as a birthright that espresso should be affordable. Therefore, when prices rise and force people to brew their own coffee at home, it naturally provokes an angry reaction.

“People aren’t complaining about newspapers costing €2,” says Paolo Scimone, who runs His Majesty Coffee, a specialty coffee roaster in Villasanta, “but they do complain about paying €1.20 for espresso.”

However, in addition to rising energy costs, higher salaries, and disrupted supply chains, there is a reason espresso is steadily becoming more expensive – and that’s quality.

As the popularity of specialty coffee grows across Italy, low-cost robusta has increasingly been replaced by high-quality arabica beans. In 2020, the average price for a kilo of arabica coffee was more than double the price for a kilo of robusta at $3.32. This means that charging the same price for an espresso was out of the question.

Francesco’s café, Ditta Artigianale, was among the first to raise prices back in 2013. He says that although it was met with considerable backlash, he was left with no other choice.

“We have amazing equipment, highly skilled baristas, and high-quality coffee beans,” Francesco explains. “So we increased prices by 50% and consumers were shocked. But it isn’t sustainable to pay so little for espresso. Maintaining the same price would have meant reducing quality.

“However, to us, it’s more important to offer high-quality espresso. We are on a mission to write a new chapter in Italian coffee history in which espresso is the protagonist.”

The importance of communication

By being among the first to break the €1 barrier, Francesco was taking a sizeable risk. He faced the prospect of losing customers and coming in for significant criticism – which, for a time, he did.

However, he soon found that the key to getting people on side was communication. As soon as he explained the reasons behind the price rise, most customers were open to the idea of paying more than other coffee bars.

“Communication is the hardest part of barista work because, most of the time, you don’t know whom you are talking to,” he says. “But it’s important to realise that customers care more about the story of your coffee’s social and ecological impact than technical data or information about the green coffee supplier.”

To gauge customers’ expectations and tailor conversations based on their level of interest, he advises asking questions.

“Find out if it’s their first time drinking specialty coffee,” he says. “And ask questions like whether they would be open to trying an espresso without sugar.”

While Paolo agrees, he stresses the importance of not only good communication, but also impeccable customer service.

“Some new Italian specialty coffee shops are a bit aggressive,” he explains, “and Italy is famous for hospitality. Cafés need to offer top customer service. Smile, serve espresso with a glass of water, use simple words, avoid technical words, drive customers smoothly through the café experience, invite them to try something fruity, something acidic, more complex than they’re used to.

“If you keep customer service super high, people don’t complain about the price because the experience is worth it.”

Even before the recent rise in oil and gas prices, energy efficiency was a priority for many businesses around the world. And in few industries is it more pressing than in hospitality.

According to Energy Star, “restaurants use about five to seven times more energy per square foot than other commercial buildings“. As relatively high-consumption businesses, restaurants and cafés direct much of their energy use into refrigeration, lightning, and air-conditioning.

The global reach of coffee shop businesses adds to the relevance of their energy efficiency goals, not only also from an environmental point of view, but from an economic perspective.

Chahan Yeretzian is head of the Coffee Excellence Center at the Zurich University of Applied Sciences (ZHAW). He explains that energy efficiency has a strong association with environmental, ethical, economic, and political implications.

“The ethical aspect of energy efficiency is paramount because energy consumption creates huge dependencies and environmental impacts,” he says. “European countries are very energy dependent, so energy consumption is a political statement.”

He adds that energy efficiency is also a selling point, as it can be high on the list of customer expectations.

Regarding the economic impact of energy efficiency, recent research backs its importance. According to the latest International Energy Agency (IEA) Energy Efficiency report, around 80% of additional energy efficiency gains over the next decade will result in savings for consumers.

Additionally, research by the Environmental and Energy Study Institute suggests that energy efficiency measures work faster and cost less than implementing renewable energies. In this regard, coffee shops of all sizes can benefit from improving their energy efficiency while contributing to the spreading of ethical business practices.

How to measure energy efficiency

Deciding where to start streamlining your energy consumption can be challenging. For that reason, learning to measure energy efficiency first is crucial.

A widely used approach is to perform an energy audit, which involves studying how a business uses energy and making recommendations for improvements. According to a recent study by the European Investment Bank, an energy audit is a valuable tool and is particularly effective for small and medium enterprises (SMEs).

Chahan claims that hiring an expert to perform an energy audit is essential, but a good start could be checking the energy consumption of existing equipment like coffee machines, dishwashers, and refrigerators.

“Nowadays, coffee machines and many other appliances have energy efficiency labels,” he explains. “These will help coffee shop owners buy more efficient appliances, enhancing the overall energy efficiency.”

However, detailed energy audits can sometimes be too challenging for business owners without extensive training and adequate equipment.

As such, following more accessible recommendations from the US Environmental Protection Agency (EPA)’s DIY energy assessment guide can be quite helpful for business owners who don’t have the budget to hire an expert.

Finding improvement areas for energy efficiency can start with the following steps:

• Locate and seal air leaks and consider proper ventilation.
• Check insulation levels at your premises. This is critical for old buildings, as insulation standards are always improving.
• Inspect heating and cooling equipment and consider more efficient alternatives.
• Evaluate your lightning and whether it’s all necessary.
• Determine the most critical areas for improvement, considering the findings, costs, and ease of implementation involved.

Improving energy efficiency

Replacing old appliances such as refrigerators, air conditioners, dishwashers, batch coffee brewers, and espresso machines can help considerably improve a business’ energy efficiency.

However, Chahan recommends avoiding buying high-performance appliances unnecessarily. 

“It’s common to see coffee shops with espresso machines equipped with four brewing units, when they rarely use more than two,” he says

For this reason, it’s crucial to buy energy-efficient coffee machines, such as those with dimmable and programmed lighting systems, that suit individual business needs.

Furthermore, the way your coffee business is structured can also cut energy use. “Roasting on-site can be surprisingly efficient compared with centralised roasting, and accounting for transport energy consumption,” Chahan says.

Installing solar panels and reducing waste can boost energy efficiency, too. Solar panels can help coffee shops reduce their energy bills by generating renewable energy, while reducing waste or using sustainable packaging helps coffee shops save money and decreases the amount of waste in landfills.

This doesn’t just help the coffee business – it also eases the strain on the services that process waste, resulting in lower energy consumption.

LED lighting is another area where coffee shops can make a big difference. They use much less energy than traditional light bulbs and last far longer.

However, focusing on the coffee shop itself isn’t necessarily enough. These days, businesses can easily influence the behaviour of both partners and customers. That means that they have the potential to improve the energy efficiency of the entire value chain.

It’s no exaggeration that coffee shops have more ways than ever to improve their energy efficiency than ever before.

So, start with an energy audit and adopt recommendations accordingly, and encourage business partners and customers to take steps toward a more energy-efficient coffee value chain. At the end of the day, it benefits all involved.