Starting a coffee shop business is not a walk in the park. It requires grit, creativity, and resourcefulness to succeed in the food and beverage industry.
The Philippines is a country of coffee enthusiasts, with nine out of 10 Filipino households consuming coffee regularly. The latest Philippine coffee statistics reveal that in 2020 alone, about 3.3 million 60-kilogram bags were used. It has grown up to date. For further reading, you can check out this guide on Philippine coffee consumption trends.
If you’re not convinced yet, here are the primary reasons why a coffee shop is a good business and some major challenges you’ll face when you venture into this type of business.
Why Coffee Shop is a Good Business in the Philippines
Growing Specialty Coffee Market
The demand for specialty coffee is on the rise in the Philippines. Consumers are becoming more discerning about the quality and origin of their coffee beans when they’re at the cafe counter.
Today’s trend is offering unique and high-quality specialty coffees from startup brands or coffee franchise in the Philippines. A coffee shop that can tap into this new desire and behavior of consumers has the highest potential to attract coffee connoisseurs.
With the specialty coffee market, cafe owners and baristas in the Philippines have begun to create new beverages and mix and match ingredients to cater to the increasing taste changes of their target audience.
For young people, flavored frappes have been a go-to beverage, while for health-conscious consumers, matcha lattes and fruit juices – non-coffee drinks are added to the cafe menu.
Strong Coffee Culture
The Philippines has a rich coffee culture with a growing popularity among coffee enthusiasts. Many Filipinos gather in coffee shops to socialize, work, have fun, and enjoy coffee.
The number of coffee shops built in every town and city in the Philippines has grown since the 2020 Global Pandemic. Many cafes have recovered their businesses, as many companies brought their employees back to work in physical offices.
Filipinos’ deep desire for better and longer socialization is seen in long lines waiting for their cups at the counter. A lengthier stay in cafes is also encouraged by cafe owners and baristas, as they’ve seen many people seeking longer intimate moments with friends and families.
Rising Disposable Income
The country’s economy has been steadily growing, leading to an increase in disposable income among Filipinos. With many freelancing jobs and outsourcing opportunities in the country, professionals acquire additional income streams, translating to more spending power to indulge in coffee shop experiences.
They are making the coffee industry a lucrative business opportunity to pursue. In earlier years, you’ll only see corporate professionals conduct meetings and intimate gatherings in coffee shops. Students and young people gather inside cafes, taking Instagrammable pictures for their social media profiles.
This behavior change is a positive signal to invest in the coffee shop business in the Philippines. Foreign brands have recently brought their international taste to the Philippine coffee scene.
Affordable Equipment
The rise of specialty coffee in the Philippines led many coffee suppliers to complement the country’s overarching coffee ecosystem. Suppliers for coffee syrups, sauces, cups, and espresso machines in the Philippines, make it easy for budding entrepreneurs to put their cafe brand from scratch.
Affordability, reliability, superior quality, and convenience are key factors cafe owners look for in every coffee shop supplier. While many fly-by-night cafe suppliers exist, you can find a few reliable options locally in the Philippines, including Blend N Sips.
Diverse Menu Options
The coffee shop business in the Philippines has expanded its offerings beyond traditional coffee beverages. Most cafes you’ll visit provide food items, including pastries, sandwiches, and snacks, catering to diverse customer preferences and needs.
This expanded menu allows coffee shops to attract a broader customer, improve customer retention, and ultimately, increase revenue streams.
There are Philippine cafes that offer non-coffee beverages to add up to the increasing demand for tea-based products and frappes, which Starbucks Coffee initially introduced.
By having diverse menu options, you’ll attract more tourists to every go-to city and location in the Philippines – making cafes an additional tourist spot for foreign nationals.
Rising Demand for Co-Working Spaces
The rise of freelancers, entrepreneurs, and remote workers has filled the demand for co-working spaces. This led to starting entrepreneurs to put up their cafes, making them a popular choice for individuals seeking a productive and inspiring environment outside their traditional office settings.
Their buying capability and need to offer a great opportunity for anyone to put a coffee cart, store type, or even a fit-out brand beside co-working spaces or inside corporate buildings. Capitalizing on this trend can lead to a steady stream of customers throughout the day.
Social Media Influence
Filipinos are one of the most tech-savvy people in the world. Their activeness on social media platforms, like Tiktok, often serves as attractive backdrops for Instagram-worthy photos.
Creating visually-appealing designs and Instagrammable spaces for cafes can generate free online marketing through user-generated content, increasing brand exposure and potential new customers.
Social media marketing campaigns can help build a solid brand for startup cafes and, ultimately, any cafe supplier looking to generate more awareness for their brand.
On top of it, you can see other digital marketing channels, like search engine optimization and pay-per-click advertising, to be go-to marketing strategies for starting cafe owners. They can penetrate the local coffee industry with an affordable budget, maintaining their overhead costs at a minimum.
Tourist Hotspots
The Philippines is a popular tourist destination, attracting millions of yearly visitors. This alone can help coffee shops cater to many customers, including domestic and international tourists.
Offering them a place to relax, recharge, and experience a local coffee culture is a unique experience most tourists would love to return to.
If you’re an aspiring coffee business owner, placing your cafe in tourist hotspots is a great way to guarantee foot traffic from regular tourists to hotels, beaches, and other popular destinations in your target city or location.
Community Engagement
Coffee shops can become community hubs, fostering a sense of belonging and community engagement. By hosting events, seminars, workshops, gatherings, and even intimate occasions such as weddings, coffee shop owners can create a sense of loyalty among their customers.
Community engagement can establish the coffee business as an integral part of the local community, which builds a strong coffee culture for the nation.
Invest In A Thriving Business
When investing in a business, one big factor is the profitability and industry you’ll be venturing into. It must be thriving where customer demand is going in the right direction.
Fortunately, the coffee business is one of those thriving industries you can consider as an aspiring entrepreneur. By having a good set of coffee suppliers, a proper location, a targeted marketing campaign, and a strategic business plan, you can create a coffee business that can grow for years.
Why Coffee Shop is a Good Business in the Philippines FAQs
Why is it good to have a coffee shop business?
Having a coffee shop business in your community is beneficial for various reasons. It creates local jobs, stimulates the local economy by supporting other businesses, and promotes a diverse economic landscape. Additionally, sourcing products and services locally can have a positive environmental impact. Overall, small coffee shops contribute significantly to the growth and sustainability of the community.
Is coffee a good business?
Coffee can be a profitable business venture, with most coffee shops becoming profitable within a few years. Success depends on food production costs and key performance indicators (KPIs). By year five, coffee shops can expect their sales to double. Carefully considering budget contingency funds, startup costs, and initial operational expenses is crucial for success in the coffee business.
Why is coffee shop a good business in the Philippines?
Coffee shop business in the Philippines is a lucrative venture due to its high demand and booming industry. With over 2,752 café and coffee shops in the country (2020 data from PSA), it’s evident that we are a nation of coffee enthusiasts. Coffee consumption is a common habit among nine out of 10 Filipino households, making it a great market for aspiring entrepreneurs.
Why do people love coffee shops?
People love coffee shops because they provide the perfect cup of coffee that energizes them for the day. Additionally, coffee is considered a part of a balanced diet, which makes it even more appealing. So, coffee at a coffee shop helps individuals feel refreshed and satisfied.
