The popularity of coffee and other caffeinated beverages among millennials has hardly slowed in the past decade. A study cited by Tech Times notes that the total number of young people consuming coffee, 73 percent, did not fluctuate much between 1999 through 2010. In some states, young coffee drinkers on average spend as much as $300 on coffee each year, according to research published by Level Money. The widespread consumption of coffee by millennials means that investors can enjoy healthy growth from a variety of distribution models.
Fast food opportunities
Chick-fil-A has reacted to the heavy consumption of coffee by upgrading its coffee selection. The fast food chain's move is especially savvy considering that Chik-fil-A enjoys a competitive share of the millennial fast food market. Level Money's data places the chicken restaurant at fifth place among fast food chains after McDonald's, Chipotle, Subway and Taco Bell.
Chick-fil-A has chosen to reposition its coffee products by meeting quality standards for "Specialty Coffee" set by the Specialty Coffee Association of America, says Entrepreneur. The fast food chain reached out to Thrive Farmers Coffee to develop a high-quality brew specifically for Chick-fil-A stores. Brand decision makers are hoping the move drives additional coffee drinkers to choose Chick-fil-A as their morning pit stop of choice.
Innovative strategies
The coffee market is also ideal for investors looking for a less traditional franchise opportunity. Young professional millennials typically flock to coffee shops during morning and lunch hours, but the Xpresso Delight system aims to keep these caffeine addicts at work. The system provides offices with gourmet coffee machines that make it easy for employees to brew their own high-end cup of Joe a few feet from their desks. Xpresso Delight has recently expanded to American customers after enjoying several years of success as one of Australia's most lucrative franchises, says Franchising.
Another Australian coffee franchise offering a new spin to American consumers is Cafe2U. The company's mobile cafe model offers a unique versatility for those attempting to break into the millennial coffee market. Cafe2U vehicles can be parked near colleges and business centers to attract attention from busy millennials. Franchising reports that those who invest in Cafe2U will be able to take advantage of relatively low entry costs.
Both of these alternative coffee franchises lack the name recognition and brand positioning so critical to cracking a millennial's wallet. However, the flexibility afforded by mobile coffee models will create opportunities for intuitive franchisees to target receptive markets as they appear.