Coffee production, consumption, and cultural significance

¶ … coffees prices and demand have been steadily increasing. Evidence of this can be seen by looking no further than, the price of the Arabica coffee bean. Where, prices have increased from $119.00 in 2001 to as high as $581.50 currently. While at the same time, the U.S. would experience a significant increase between: 2000 and 2005 of 157%. ("Arabica Coffee") ("U.S. Coffee Shops") in this case of Mystic Monk coffee, this means that they can create a unique market to reach out to their target audience of Catholic coffee drinkers. Where, the company has posted a profit of $56,000 per month. However, the recent interest in purchasing a ranch has meant, that some kind of marketing plan needs to be established for the company. This means creating a strategy that will: examine the current market conditions for coffee, possible areas that they can target to increase sales and how the funds from this enterprise can help the Carmelites to realize their dream of having the ranch for their followers. Together, these different elements will provide the greatest insights, as to the underlying business strategy that can allow this organization and the Carmelites to achieve their goals.

The Current Market Conditions for Coffee

From the late 1980's onward, U.S. coffees sales would begin to increase sharply. Part of the reason for this, was because companies such as Starbucks created a new niche market for gourmet coffees. At the heart of their basic strategy, was to build a solid relationship with: various coffee growers and then market different types of gourmet coffee in their restaurants. In general, this was sold in the form of coffee beans that can be purchased and taken home. While at the same time, their strategy was allowing consumers to purchase their favorite beverages for a premium price. This is important, because the actions that were taken by Starbucks would help to redefine the U.S. coffee market. As a variety of consumers, would begin to seek out those producers that offered the best products surrounding the taste and aroma. ("Starbucks Coffee Company") These two elements would have an impact upon the way coffee was consumed, with it becoming fashionable and many people willing to pay more to purchase their favorite gourmet brands. The below chart illustrates the underlying demand surrounding gourmet coffee sales in the United States between: 1997 and 2002. As it would steadily increase during that time by rising from 3.0% (in 1997) to nearly 15% (by 2001); signifying the increasing demand that is being experienced. (Nelson)

(Nelson)

This information is important, because it showing how this kind of strong demand will allow Mystic Monk Coffee producers, to create a unique product that will reach out to Catholic coffee drinkers. As a result, this is showing how the strong market conditions will continue well into the future. When you combine this with the increase in prices since 2001, this means that the company has the ability to increase their profit margins dramatically. Where, they are purchasing their products from a whole seller, which is giving them a sizeable mark ups.

When you step back and analyze this information, it is clear that the underlying demand for gourmet coffee is continuing to remain very strong. In the case of Mystic Monk, this means that they can create a unique target market that will help them to see an increase in profit margins. At which point, the Carmelites can be one step closer to realizing their dream of purchasing a ranch for members of their organization.

Areas the Company can Target to Increase Sales

Mystic Monk Coffee is ideally positioned to take advantage of the increasing demand that is being seen among gourmet coffee producers. Where, despite the severe economic implosion that occurred with the financial crisis along with subsequent recession, the majority of people are still continuing to pay premium prices for gourmet coffees. A good example of this can be seen with a report that was compiled by the Specialty Coffee Association, where they found that coffee demand was increasing during the recession. What happened was a survey of the associations coffee producers would reveal that nearly 50% were seeing an increase in demand despite the recession in 2009. Commenting about what was taking place, Ric Reinhart (the Executive Director of the Specialty Coffee Association) said, "Our members are showing signs of strength, which leads us to be more optimistic than not. Nearly half reported increases, albeit more modest than in previous surveys. Respondents were generally optimistic about the future." (Bolton) This is significant, because it shows how despite the severe economic recession, the majority of consumers are continuing to pay more for gourmet coffee.

As a result, Mystic Monk could focus on reaching out to the core demographic of consumers who are drinking coffee, by marketing themselves in a similar fashion to the Newman's Own Salad dressing. ("Newman's Own Reaches $300 Million in Charitable Giving") Where, they could highlight how all the profits go towards charity and the way that this helps to support the activities of Catholic organizations around the world. This would create a unique product that could increase with popularity over the course of time. As the majority of consumers will purchase high quality products that will support the activities of various nonprofit organizations. In the case of Mystic Monk, they could be able to create a similar kind of association when it comes to their coffee.

At the same time, the company could focus on reaching out to their core audience (Catholics). The way that they can improve their market share, is to send coffee samples to different churches and Catholic-based charities across the United States. For those organizations that are going to be making large purchases, they will be able to receive a substantial volume discount. This is important, because it shows how the Mystic Monk can be able to create a unique following among their core audience.

When you step back and analyze this approach, it is clear that it will help to provide the company, with a way of being able to distinguish itself from competitors. This is accomplished through highlighting, how all of the profits are supporting a nonprofit charity and increasing their marketing efforts to Catholics. Once this takes place, it will help the company to slowly be able to separate themselves from other producers. At which point, many people will purchase their products, because they like them and want to support those organizations that are helping with a host of charitable activities. In the case of Mystic Monk Coffee, this would be hard to argue because they are a Catholic-based nonprofit entity.

How the Funds from this Enterprise can Help the Carmelites to Realize their Goals

The funds from the sale of Mystic Monk Coffee can help the Carmelites to realize their ultimate goals. Where, they can be able to create a unique product that will provide consumers with another choice among gourmet coffee producers. At the same time, it is giving Catholics a way of helping to indirectly support one of their own charities. This will allow the Carmelites to be able to offer a unique product that is in demand (with a socially conscious message). Once this takes place, it means that they can help to deliver an invaluable product, to those individuals who are concerned about how their money is being spent on the merchandise they are purchasing.

At the same time, the increasing demand from consumers and higher markups, will allow the company to be able to maintain consistently increasing profit margins. This is important, because when it is placed alongside the nonprofit elements of the organization, it will help them to have the income necessary to purchase the ranch. Where, they can use the large donation that they received to make the down payment, while the income that the company is producing can easily cover the mortgage and pay any outstanding property taxes. Therefore, this strategy will help the Carmelites to be able to realize their dreams and allow people to enjoy their favorite coffee (creating a win -- win situation for everyone).