Coffee Industry Bracing Itself for Economic Decline

The market for premium coffee sold outside the home has grown tremendously over the past few decades. Canadians are more likely than ever before to partake in an "inexpensive luxury" at the more than 4,400 top-shelf coffee shops, according to Coffee Association of Canada president Sandy McAlpine, who spoke to CTV.ca.

Nevertheless, with coffee giant Starbucks reporting record profit drops in the United States during last year's fourth quarter, there are signs that the good times for coffee shops are coming to an end.

According to figures from New York's Beverage Marketing Corporation, more than half of Canadians consume lattes, cappuccinos or other specialty brews occasionally, and six per cent have at least one of these gourmet drinks on a daily basis. Monica Treidlinger, a business analyst with Agriculture and Agri-Food Canada, said "people like to be waited on and have their pampering and what-not.

"To do that for four or five dollars, it's pretty cheap -- as opposed to being pampered in a restaurant for $50.00."

Things are looking better in Canada than they are in the United States right now, but according to CTV.ca nobody can be sure what will happen to the coffee industry in the near future.

Things have been "tightening up" at Second Cup Limited, where more than 5000 people work at more than 350 locations across the country. President Stacy Mowbray told CTV.ca that growth has slowed to just under one per cent for the year and may slow even more in the near future.

The company has ensured that it is getting the best price on its supplies and is concentrating on maximizing the customer experience to stay competitive.

Some smaller chains say they have not seen any signs of a decline as of yet.

The general consensus seems to be that if Canada's economy continues to decline, people will go on drinking coffee, but may cut back on unnecessary expenses, such as buying top-of-the-line premium coffees. They may even forgo drinking coffee outside the home or office altogether, or downgrade the type of coffee they buy.