Keeping a coffee shop viable in today’s highly volatile economy and struggling supply chain is a tall order. Simply selling coffee just isn’t enough to stay competitive. Fortunately, there are ways to offer your customers more value without losing your business’s scalability. Adding a few cleverly integrated items into your menu is one of the most reliable ways to diversify your revenue. These little upsells and cross-sells usually don’t clear $5 or $7, reducing pressure on the customer when they’re ready to leave. We partnered with a coffee industry expert to find 12 products nearly guaranteed to be successful in coffee shops to increase profit margins. By the end of this article, you’ll enjoy the following benefits:
- Fresh ideas to incorporate into your business to increase profit margins
- More opportunities to engage customers and provide them value
- Increased business stability that doesn’t rely overmuch on coffee sales
Expected Margin: $$ Effort: Low Delicate and flavorful, macarons are closely associated with hot drinks. In fact, the food trends platform Tastewise claims the #1 pairing with a macaron is a latte. Simply put, this is a natural match, and these iconic confectionaries are easy to upsell since many customers automatically crave them at just the sight. French Macarons also stand out due to the high level of skill needed to create them. These items have a more premium feel to them and stand out from more traditional cafe offerings like muffins, cookies, and bagels. Best of all, these items require no prep other than fridge space for storage. For our macarons at Duverger, we make and sell them so that coffee shops can expect a ~50% margin on every macaron sold—a good chunk higher than most other products in a cafe at 25-30% margins. Additionally, selling boxes of multiple macarons—often 12—is a fairly easy $25 sale ($12.50 profit) in one transaction. The shelf life of macarons in the fridge is around seven weeks, making it easy to stretch stock out without fear of the product going stale. Give your customers a one of a kind gourmet experience with their cup of coffee. Contact us today to learn about our wholesale macarons handmade from scratch with real, natural ingredients.
Single Serve Coffee Products
Expected Margin: $$ Effort: High Sometimes your customers want to support you, but aren’t able to visit you in-store. Give them the ability to enjoy your products wherever life takes them with single serve coffee products. You can create these products by collaborating with a business partner that reflects your values and price points. Below are just a few ideas you can try:
- Instant Coffee — Do you have a particular blend that sells well? Turn it into an instant packet customers can keep on hand when they’re camping, traveling, or working from home.
- Steeped Coffee — Steeped brings these two worlds together by creating little coffee bags that can be dipped into a mug or thermos and brewed like a tea bag.
- Single Serve Pour Overs — Single serve pour overs come premeasured, preweighed, and a filter to create a soothing experience for the buyer. This option is a touch fancier than instant coffee and steeped coffee, adding a little more ritual to the drink while still being easy and accessible.
Most cafes only need one of the above options.
Cold Brew Concentrate
Expected Margin: $ Effort: Low Cold brew concentrate that’s bottled and ready-to-go will appeal mightily to customers who are too busy or too tired to stay in-store. Cold brew is easy to make and, due to its need to soak for several hours at a time, can be made after the store has closed up for the day. Bulk items are another way you can skew this retail offering in your favor, since some customers prefer to stock up for the long haul. Make sure to double-check with your local health department on whether or not your business is allowed to sell bottled or growler cold brew. The health risks with cold brew are due to the fact the product isn’t created with heat and is sometimes stored at temperatures outside the food safety zone.
Expected Margin: $ Effort: Low The demand for alternative milks has skyrocketed. Many customers are lactose-intolerant, while yet more are steering clear of dairy because of their weight or personal preference. The cost involved in ordering a set amount of alternative milks for your cafe’s schedule will pale in comparison to the amount of customers who are now able to order from you. Alternative milks include the following:
- Soy milk
- Oat milk
- Almond milk
- Rice milk
- Pea milk
Covering the cost for alternative milks often looks like adding another $.50 or $1.00 to your drink prices.
Premium Hot Chocolate
Expected Margin: $ Effort: Low A fancy mug of hot chocolate is quite appealing during the winter months. While packets of hot cocoa are easy to make, they don’t have quite the same charm as a cafe offering. Doll up your premium hot chocolate by using the same chocolate for mochas, steamed milk, and a hearty topping of whipped cream. It’s easy to create a memorable experience with pre-existing materials such as chocolate shavings, cinnamon sprinkles, or caramel drizzle.
Tea (Especially Custom Blends)
Expected Margin: $$ Effort: Medium If you don’t stock tea in your coffee shop, you might want to consider it. Tea is a powerhouse industry, hitting $207 billion in 2020 to the coffee industry’s roughly $102 billion. Many customers find themselves drawn to tea for its health benefits and homely atmosphere. Decaf-drinkers are especially thrilled to have more herbal tea options at their disposal. Meeting all these customers halfway is easy when you craft custom blends for your shop. Creating a signature tea blend experience starts with balancing out tea’s fundamental ingredients of leaves, flowers, roots, fruits, and seeds. Custom blends give your shop a unique experience that can’t be easily replicated by any other business. If that wasn’t good enough, you can also offer your customers loose leaf blends in retail packaging to take home with them.
Seasonal Menu Offerings
Expected Margin: $ Effort: Low Try getting extra creative with your seasonal menu offerings. These little touches are beloved for their low effort and high reward. Seasonal menu offerings regularly hit a high note with customers due to their inherently limited-edition nature. For example, a customer that misses out on your seasonal hazelnut eggnog latte won’t get it again for another year. Boosting your profit margins with seasonal items usually begins and ends with your existing stock and creativity. A few places you can start with include:
- Federal holidays
- Local holidays
- Sports events
You can add additional value to seasonal items by customizing your chalk signs or teaching your baristas new latte art.
Expected Margin: $$ Effort: Medium Coffee shops usually have several sweet items. Alongside your muffins and macarons, consider adding a few savory foods to your menu for balance. When customers aren’t going to a cafe for breakfast, they’re dropping by for lunch. Sandwiches provide a filling and well-rounded meal that pairs nicely with a latte, cold brew, or cup of tea. Depending on your budget, you could make the sandwiches in-house or partner with a local business to deliver a specific quantity each week. Making sandwiches in-house will require extra training for your baristas, particularly if they need to handle grills or ovens.
Expected Margin: $$ Effort: Low What better way to show your customers appreciation for their repeat business than a few discounted perks? Now, membership cards can’t be tossed into your business idly. You need to have a clearly outlined membership structure in place so customers know what to expect and so you don’t go over budget. Common membership perks you can try for your membership cards include:
- Free refill after X amount of purchases
- Discounts on certain days of the week
- Free samples on new or limited-edition menu items
Giving away freebies doesn’t sound good for business, but the truth of the matter is quite the opposite. It is much cheaper to keep a customer around in the long-term than to constantly seek out new ones. One study published by HBR found that increasing customer retention by 5% will boost your profits by at least 25%, if not higher! To top things off, loyalty programs also incentivize more casual customers to further their relationship with your business.
Original Art From Local Artists
Expected Margins: $ Effort: Medium You know the saying, “You scratch my back, I’ll scratch yours.”? Selling original art from local artists in your coffee shop is a very lucrative way of paying it forward for everyone involved. Tapping into your local community for unique items lends your coffee shop a warmth and credibility not seen in corporate giants. In exchange for displaying artists’ work, you can take a small cut to put back toward your shop. Customers will enjoy the ability to purchase limited-edition work (or just snap a few photos for social media, which is free word-of-mouth). A popular business model for original art is the 70/30 split – 70% of the sale goes to the artist, 30% of the sale goes to the shop. To execute these sales successfully, you’ll need active networking to find local artists, vet them, and gain permission to display their work. You’ll also need to get creative allocating space for their art and double-check with your business tax accountant. After these steps are completed, the majority of the work is up to the artists and the customers who walk in!
Expected Margin: $$$ Effort: High Memorabilia is the gift that keeps on giving. Not only does your customer enjoy a fun accessory alongside their meal, they’ll be reminded of your business every time they interact with their purchase. The effort level for branded merchandise is higher than average, since you need to create memorable designs and find a shop that can provide you with materials. With the aid of online print shops such as Printful and Shopify, setting up a merchandise shop is more straightforward than ever. Branded swag you should consider adding to your coffee shop include:
T-Shirts, Sweatshirts, and Hats
The practicality of a t-shirt, sweatshirt, or hat is a welcome sight for coffee customers. The more vibrant and memorable your design, the better. Ideally, you want the clothes to remind the customer of the cafe to increase their chances of coming back or spreading positive word-of-mouth. Consider incorporating the business name or logo into any illustrations you try.
Not only are cups a practical purchase, they pair nicely with a bag of whole bean coffee or a few packets of instant.
The thermos is an easy way to meet your socially conscious customers halfway, able to be reused for many years.
Expected Margins: $$ Effort: High Last but not least, we recommend giving special events a try to boost your profit margins. Adding value to your business can and should extend outside of your shop. There are a few kinds we like to suggest:
- Coffee Catering — Do you sometimes get requests to cater for an event like a birthday party or a work retreat? Consider adding coffee catering as a specialized service (which doubles as word-of-mouth for any curious onlookers).
- Coffee Classes — Online learning has taken off with accessible resources like YouTube and Skillshare. Add some extra value with your business by offering coffee classes to passionate customers. A bundle idea you can start with is offering a two-hour class for $25, which comes with a bag of coffee beans and any other products you feel are necessary.
- Team-Building Events — Value for your business extends to your employees. Give your hardworking staff a pick me up with tasting events, especially if you have a new product coming in.
Don’t forget to offer to bring macarons or pastries as well (an easy upsell!).
Where Should You Start First?
Boosting your profit margins is a little intimidating. You don’t want to try something only to find out it didn’t work, right? Fortunately, the examples on this list are tried and tested. Our top 12 things every coffee shop should sell to increase profit margins in 2022 are:
|French Macarons||Premium hot chocolate||Membership cards|
|Cold brew concentrate||Seasonal menu items||Original art from local artists|
|Single serve coffee products||Tea (+ custom blends)||Branded swag|
|Alternative milks||Sandwiches||Special events|
Try our Certified Organic wholesale macarons to boost your coffee profit margins this year and give your customers a premium option they won’t soon forget.