While commercial ground and instant coffee sales have been declining for several years, overall retail coffee sales are expected to remain stable or even increase, due to the dramatic growth in the specialty coffee categories. Specialty sales are being driven in part by a tremendous increase in the number of coffee cafes and specialty stores. Most potential specialty coffee markets, other than the West Coast, are far from saturated. Consumer Demand Trends Overall, coffee consumption appears to have stabilized since the late 1980s after steadily declining for almost thirty years. Unlike the commercial coffee industry, the specialty coffee segment is extremely attractive and promising for new entrants.
Competitors are numerous and dispersed.
Consumption of specialty coffee beverages is growing, supported by an emerging cafe culture. Growth rates and profit margins are both high. In relation to the overall coffee industry, the specialty segment offers the most favorable conditions for TransFair's entry. Furthermore, as high quality becomes the new standard in specialty coffee, the industry is becoming more competitive. Soon, it will no longer be enough to offer great-tasting coffee because consumers will expect more.