The aroma of the coffee roaster is pretty irresistable with most of us hooked to our daily coffee fix. Behind each long black or espresso is a competitive industry supporting a range of businesses. Our case study focuses on one business and its story.
There are some impressive coffee market statistics in Australia with average consumption as high 1.9kg and total revenue of $US 1.43billion. All this consumption is supported by over 7,400 coffee shops around the country.
Rather than being dominated by one or two large brands as in the US, most of the coffee shops are independent. They are supplied by coffee companies or roasters with both the beans and machines. Competition has intensified as better mini roasters from the 2000s have enabled larger cafes to start roasting their own.
Consistency can be variable which means there are also commercial contracts for roasters to supply larger chains. Around Victoria there are other business models which supply locally a wider range of mid sized cafes and restaurants.
The quality of the coffee output is important and awards are highly sought after.
To ensure this excellent equipment is needed which is both efficient and robust. German machines are highly regarded for these qualities and are sold into the Australian market.
With sourcing equipment from Europe however can come challenges with servicing. One innovative Australian company has addressed this by undertaking some local adaptions which in turn can be maintained locally.
To put this together though requires funding which in a low margin sector can be hard to find. Through working with a local broker and a lender, a sale and leaseback solution was found.
This enabled a cash injection of $400k to invest into their coffee machinery.
Classic Funding Group were delighted to support this business and see their hard work mean future coffee production in their area and cafe supply looks assured well into the future
If you own a similar business and have cash flow challenges, you can find out more by contacting us today.