If you’re thinking about adding the recurring revenue of a coffee delivery subscription to your business strategy, good job. The mechanics of a monthly coffee subscription are easy to grasp. And there are a lot of benefits to learning how to start a coffee subscription business and offering a coffee club membership.
An important exercise when considering integrating a new revenue stream into a business model is locating where your version of it fits within the industry. To that end, we’ve compiled what we feel are the 12 most significant statistics for a coffee roaster or retailer to know before they dive into a coffee club subscription model.
We start with broad industry-wide trends then narrow it down to individual coffee consumption and purchasing trends. Reading them in order will tell you a story about an incredible industry with a lot of demand and a high ceiling. It should also help you think a little more critically about where your coffee monthly box exists within the overall narrative.
At the end, we’ll highlight a few trends from within the coffee delivery subscription industry that capitalize on these statistics. Just like you’re about to.
12 Useful Statistics for Setting Up a Coffee Club Subscription
1. Coffee represents a staggering 1.6% of the U.S. GDP. A country’s GDP, or gross domestic product, is the go-to barometer for the health of its economy. The coffee industry is, to put it bluntly, enormous. For some context, the retail and wholesale trade sector, in its entirety, is 11.6% of the GDP.
2. A big part of coffee’s outsized representation in the GDP is that about 83% of Americans drink coffee and 64% of Americans drink a cup every day. To put that into perspective, only about 56% of Americans say they’ve had an alcoholic beverage in the last month.
3. Of those who drink coffee in the U.S., the average coffee drinker enjoys 3.1 cups per day.
4. The frequency with which our country enjoys this particular commodity is a huge boost to the national economy. To quantify that, the average cup of coffee costs $0.58 to brew at home and $1.75 at a coffee shop.
5. And to quantify that at a higher level, consumers spend over $74 billion on coffee and the coffee industry generates over $68 billion of income per year. That’s not the total monetary value, as the GDP uses, but strictly income.
6. So where is all this caffeine-soaked economic activity happening? Right in your kitchen. 79% of coffee drinkers in the U.S. drink coffee at home.
8. Of this huge number of home coffee drinkers, roast and ground coffee make up the large majority of coffee types they purchase and consume, at 45%.
6. In one of the more shocking pieces of data we dug up, coffee is no longer solely a polite way to convey caffeine into your system. 42.9% of people in the U.S. drink coffee because they like the taste. The majority of people now consider coffee an artisanal commodity, like wine or cheese.
7. In fact, around 70% of all coffee drunk by Millennials is considered gourmet. The younger coffee drinkers are, the more affected they are by the attitudes and products of third wave coffee—a two-decade long trend in the coffee industry that saw the most popular and best coffee roasters focus on quality, uniqueness, and social responsibility above all else.
9. Those folks for whom taste is the reason they drink coffee back that up with a willingness to pay for it. Caffeine content and taste are the highest-valued characteristics of coffee. Coffee drinkers will pay around 110% and 70% more, respectively, for more caffeine and a better taste. What’s interesting here is that consumers are willing to pay more for higher caffeine, but more of them cite taste as the reason they drink coffee in the first place.
10. People are very willing to pay for country of origin. Of all the characteristics of coffee, single-origin products fetch the highest prices. People are willing to pay almost 200% more for products with a clear country of origin. For some context, that beats out 110% (Fair Trade), 80% (organic), and 40% (familiar brand).
11. Coffee drinkers are also more willing to pay for products from local roasters. They’ll shell out up to $25 per pound as compared to a maximum of about $20 per pound from a non-local high-end roaster. This is an interesting one to consider for online coffee delivery subscription programs. If you’re starting small in your local area, it should be easy to capitalize on. But once you get a larger national customer base, it may take some targeted location-based marketing to pull this lever. But we’ll see in the trends section one business that’s able to export the excitement for the local roasters in their area.
12. And, finally, the willingness to pay that may be most salient for burgeoning coffee club subscriptions and coffee delivery subscriptions. Monthly willingness to pay increases as coffee consumption frequency decreases. The more often someone drinks coffee, the less they’re willing to pay for it. A daily coffee drinker is willing to spend around $48 per month on coffee. A weekly coffee drinker is willing to pay about $103 per month. That has a big implication for whether you have a coffee monthly box or not, and just generally what delivery cadences you offer. To those who drink coffee infrequently, it’s a special occasion and they’re happy to spend accordingly.
Five Current Coffee Club Subscription Trends
When you look at coffee delivery subscriptions that have been spun up by existing roasteries, retailers, or suppliers it’s easy to see the impact the above statistics have on business model and brand identity. Here are five good examples of coffee club subscriptions that are capitalizing.
Only Local Roasters
Bean Box has a brilliant approach to the trend of local roasts fetching higher prices: only include products from roasters in the Pacific Northwest. The data shows this is a profitable approach to marketing to people who live in the Pacific Northwest, sure. But what about the rest of the country? By doubling down on a geographic region, they’re basically telling people across the country that this is the region that matters. These are the local roasters you should pay attention to.They bottle the excitement around local roasters and deliver it monthly.
The reason why single-origin coffees are popular is because you can pinpoint exactly where the coffee is from. You can then learn about the region, growing community there, and environment. All this information tells a story about the coffee, and that context immediately makes it more valuable. People prefer being a part of something rather than experiencing randomness. Atlas Coffee Club is based on that. Their coffees are a way to travel and taste the world, and immerse yourself in the stories and histories of the communities and geographies behind it all. That’s what single-origin means to most people, and Atlas nails it.
Blue Bottle Coffee has an interesting reaction to the inverse relationship between willingness-to-pay and consumption frequency. They lean into the latter. They’re not after high-price bi-weekly, monthly, or quarterly deliveries, they’re after low-price weekly deliveries. So they offer six-ounce bags.
Most people claim taste is the reason they drink coffee. Taste is also one of the characteristics people are willing to overspend on. Driftaway Coffee recognizes that and builds their coffee delivery subscription around taste. Your subscription begins with a tasting kit, which you sample, rate, and send back. Based on that, they construct a coffee club subscription based on your tastes. Your coffee monthly box allows you to discover new regions and roasts, but they’re all based on your taste profile. Making taste central obviously resonates with the over 40% who claim it’s the reason they drink coffee.
Take the Guesswork Out
As we’ve seen, one of the factors that affects monthly coffee spend is frequency of consumption. That’s rightfully top-of-mind for consumers who will base their decision—or hesitate to make a decision—on their doubts about how much coffee they need. A recurring delivery is a big commitment. A good customer experience in the coffee delivery subscription space is taking out the guesswork. Pact Coffee includes a frequency calculator on their sign-up page that uses a sliding scale to estimate how much coffee you should order. It’s clear, easy, and likely alleviates a lot of the anxiety around signing up for the recurring delivery of a consumable product.
Keep in mind that a coffee company need not limit itself to only one trend. You can offer multiple subscription options and have the customer choose their own adventure. If they want a single-origin subscription, you can provide it. And if they want a subscription based on their tasting profile, you’ve got it covered. Where you can really start to get creative is combining the trends. What differentiates your program, for example, can be that you have a subscription option for single-origin coffees that is also based on a tasting profile.
All of the above can help you determine your program’s identity strategy, but you’ll need a solid ecommerce platform to take care of all the transacting. That’s what BlueCart does for coffee shops and suppliers across the country. Book a demo and you’ll see how easy it is to automate the most difficult parts of the subscription process with a customizable coffee ecommerce platform. That’ll give you more time to source, roast, and sell.
Data gathered from www.myfriendscoffee.com, www.foodandwine.com, www.e-importz.com, www.priceintelligently.com, www.and baristainstitute.com.