Because of demographic, economic and market trends, coffee houses (modeled on Starbucks) targeted to the US Hispanic community can fill an existing void and offer an attractive business proposition to potential investors and developers.
The basic concept entails an Hispanic-themed coffee shop serving beverages and pastries indigenous to select Hispanic population’s country of origin that would target both the Hispanic population, as well as other urban residents. These establishments would be located in”trendy areas”of cities with large Hispanic populations, such as Adams Morgan in Washington DC and the Upper West Side in NY. Other point-of-purchase services may include cyber connections to countries of origin.
The concept thus capitalizes on two strong trends: the increase in Hispanic population and spending power and the American penchant for experiencing a variety of ethnic cuisines.
Such a proposition allows for the creation of profitable enterprises with the possibility of expansion through the opening of additional sites, as well as the development of a franchise program.
- Hispanics are the fastest growing ethnic group in the US. Projections indicate that Hispanics will account for 14% of the US population by 2010.
- As they become more integrated into the US economy, Hispanic spending power is increasing.
- Nevertheless, Hispanics are maintaining the integrity of their language and culture.
- Hispanics are high consumers of coffee beverages.
- Hispanics have a preference for coffee beverages that are indigenous to their country of origin.
- While US per capita consumption of coffee has decreased in the last thirty years, per capita consumption of specialty coffee has increased.
- Recent surveys shows that coffee consumption in the Generation Yand Generation X cohort is increasing to levels of the World War 2 generation.
- These age groups are disproportionately represented in the Hispanic population
- US spending on Food Away From Home (FAFH) is increasing.
- The Hispanic FAFH coffee market appears to be dominated by small“Mom and Pop”establishments whose primary focus is notcoffee, but meals.This concept would be unique in the Hispanic market.
- Established coffee companies (i.e., Maxwell House, Folgers, etc.) view niche marketing as the key element of a successful growth strategy.
