Be coffee-rich in Russia this season
Published on: January 05 2011 14:00 GMT
By Irina Loseva
Coffee is rapidly gaining popularity in Russia. The number of cafes and coffee houses in the cities of the country continues to grow. Coffee houses are currently the most profitable institutions in the area of contemporary catering. They bring no less than 30% revenue, and the demand has only grown over the years. Running a coffee shop has become a profitable business.
Russians are now happy to spend their time in cafes, both for personal and business meetings. Cafes today are not just a segment of the food establishments, but rather a defined subculture and lifestyle.
The degree of relevance of such institutions is testified by the fact that the number of places where people can have a cup of coffee has been increasing over the years. People are willing to save on food, but not a refreshing cup of coffee in the morning. They are ready to pay much more than its cost for a cup of espresso in a coffee shop.
Analysts believe that profit margin of specialized stores exceeds 600%, while the revenue is approximately 30%, which makes a business of this kind very attractive. On average, a regular coffee shop pays for itself in two to three years.
However, those who are planning to open a coffee shop should keep in mind that they would need to try to sell at least one hundred seventy cups a day, and more than five thousand a month. This could be difficult to achieve. Yet, it is necessary to cover the rent expenses and make profit, wrote exrert-coffee.ru
One option of a small business is a coffee shop on wheels. This idea was borrowed from British entrepreneurs. Mobile coffee shops in Russia and Ukraine have quickly found their niche in the market and one can always see a line near a vehicle with a coffee machine.
Usually, the expenses are limited to the parking fees, purchasing of a coffee machine and products. Mobile coffee houses are often completely autonomous and do not need electricity and water, said Invest Gazeta.
Coffee vending machines are also considered a profitable vending business. In practice, the machines still require attention which involves careful selection of technology, search for appropriate location and maintenance issues.
Nevertheless coffee vending machines operate without a license and a selling assistant, do not require daily inspection and, if the location is good, generate steady income and pay off within six months to two years.
According to experts, to turn the vending business into a full-on operation, one needs to build a chain of at least four machines, simultaneously providing natural and instant coffee and properly locating them in profitable areas - schools, service stations, hair salons, office and shopping centers, airports and train stations. Ideally, there would be a power socket near a coffee vending machine, and even better if there are sofas or chairs.
The range of drinks is chosen depending on the location of the machine and the target audience. In offices and shopping malls, where the client is focused on high quality, the machines that run on natural coffee beans should be located. According to Bishelp.ru, most popular drinks now are coffee (espresso, Americano, cappuccino), tea, hot chocolate and milk.
In general, any of these options can bring fairly good financial results within reasonable time. An illustration of this is the ever-expanding chain of "Chocolate" and "Coffee House." Both companies are actively increasing their presence in other cities across the country, apart from Moscow and St. Petersburg. Coffee houses have become a very profitable business and will in the future bring a lot of money to the owners.
Original Article
Starbucks Backs 2011 Outlook Despite Higher Coffee Prices - Update 8/17/2010 9:48 AM ET
Starbucks Backs 2011 Outlook Despite Higher Coffee Prices - Update
8/17/2010 9:48 AM ET
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(RTTNews) - Specialty coffee retailer Starbucks Corp. (SBUX: News ) on Tuesday reaffirmed its earnings outlook for fiscal year 2011, despite the recent rise in green coffee prices.
The Seattle, Washington-based company reiterated its fiscal 2011 earnings outlook in a range of $1.36-$1.41 per share, which it provided while reporting its financial results for the third quarter in July.
The company expects to absorb about $0.04 per share in additional commodity costs in the year, primarily related to higher coffee prices. Starbucks said it will be able to offset the relatively short-term fluctuations inherent in today's coffee market.
On average, 21 analysts polled by Thomson Reuters expect the company to report earnings of $1.43 per share for fiscal 2011. Analysts' estimates typically exclude special items.
Starbucks had been grappling with weak U.S. sales growth due to slowing traffic and moderating demand amid the economic meltdown. In an effort to live through the recession, the company embarked on several cost-cutting measures, including store closures and job cuts. The company also brought back founder Howard Schultz as CEO to steer it through. In mid-July, Starbucks reported a 37% increase in third-quarter profit, helped by strong same-store sales growth and improved margins. The company's profit for the third quarter was $207.9 million or $0.27 per share, compared to $151.5 million or $0.20 per share for the year-ago quarter. Net revenues for the quarter rose 8.7% to $2.61 billion from $2.40 billion in the prior-year quarter.
At that time, the company said it expects fiscal 2010 non-GAAP earnings in a range of $1.22-$1.23 per share. Analysts expect the company to report earnings of $1.24 per share for the year.
Earlier on Tuesday, Starbucks announced the launch of Starbucks Reserve, a new line of ultra-premium, single-origin coffees, which will be available in select U.S. stores this fall. Beginning August 31, the first offering, Galápagos San Cristóbal will be available for sale.
In Tuesday's regular trading session, SBUX is trading at $24.03, up $0.21 or 0.88% on a volume of 13,178 shares. The stock has been trading in a range of $18.21-$28.50 in the past 52 weeks.
Original Article
8/17/2010 9:48 AM ET
RELATED NEWS
Starbucks Q1 Profit Soars 43.5%, Tops Estimate; Tightens FY11 Outlook
Starbucks Corp. Is Heading Lower On Forecast
Correction: Starbucks Q1 Profit Soars; Tightens FY11 EPS Outlook - Quick Facts
Starbucks Q1 11 Earnings Conference Call At 5:00 PM ET
Starbucks Launches Mobile Payment In All U.S. Company-operated Stores
(RTTNews) - Specialty coffee retailer Starbucks Corp. (SBUX: News ) on Tuesday reaffirmed its earnings outlook for fiscal year 2011, despite the recent rise in green coffee prices.
The Seattle, Washington-based company reiterated its fiscal 2011 earnings outlook in a range of $1.36-$1.41 per share, which it provided while reporting its financial results for the third quarter in July.
The company expects to absorb about $0.04 per share in additional commodity costs in the year, primarily related to higher coffee prices. Starbucks said it will be able to offset the relatively short-term fluctuations inherent in today's coffee market.
On average, 21 analysts polled by Thomson Reuters expect the company to report earnings of $1.43 per share for fiscal 2011. Analysts' estimates typically exclude special items.
Starbucks had been grappling with weak U.S. sales growth due to slowing traffic and moderating demand amid the economic meltdown. In an effort to live through the recession, the company embarked on several cost-cutting measures, including store closures and job cuts. The company also brought back founder Howard Schultz as CEO to steer it through. In mid-July, Starbucks reported a 37% increase in third-quarter profit, helped by strong same-store sales growth and improved margins. The company's profit for the third quarter was $207.9 million or $0.27 per share, compared to $151.5 million or $0.20 per share for the year-ago quarter. Net revenues for the quarter rose 8.7% to $2.61 billion from $2.40 billion in the prior-year quarter.
At that time, the company said it expects fiscal 2010 non-GAAP earnings in a range of $1.22-$1.23 per share. Analysts expect the company to report earnings of $1.24 per share for the year.
Earlier on Tuesday, Starbucks announced the launch of Starbucks Reserve, a new line of ultra-premium, single-origin coffees, which will be available in select U.S. stores this fall. Beginning August 31, the first offering, Galápagos San Cristóbal will be available for sale.
In Tuesday's regular trading session, SBUX is trading at $24.03, up $0.21 or 0.88% on a volume of 13,178 shares. The stock has been trading in a range of $18.21-$28.50 in the past 52 weeks.
Original Article
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