Coffee Plus (English)

COFFEE PLUS LTD.
CONFIDENTIAL INFORMATION MEMORANDUM
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Table of Contents
Business Summary 3
Facilities and Business Premises
5
Administration and Operations
6
Current Sales and Marketing Efforts
9
Sales Statistics
10
Opportunities
11
Appendix A: Current Franchise Locations
12
Appendix B: Franchise Menu Items
13
Appendix C: Coffee and Tea Industry Overview
14
Appendix D: Works Cited
24
The information contained herein is based on sources that are believed to be reliable. Pavilion Business Services nor any of its
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responsibility for any errors or omissions which may be contained herein or accept any liability whatsoever for any consequences
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he or she and his or her professional advisors are solely responsible for evaluating all information contained herein.
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2

Business Summary
General Business Information
Name of Business
Doing Business as
Type of Business
Year Founded
Coffee Plus Ltd.
Coffee Plus
Coffee franchisor and roasting plant
1994
Address
5986 84th Street Calgary, Alberta, Canada
Head Office Hours
Mon- Fri 8am 4pm
Shareholders
Property
Brendan Wicks (33.3%); Jess Wicks (33.3%);
John Mills (33.3%)
Available for sale
Number of Employees:
(not including shareholders)
Reason for Selling
18 - Full Time
06 - Part Time
Retirement
Website
www.CoffeePlus.com
Financial Statement Highlights
Consolidated Figures: Coffee Plus Ltd.
2012 2013 2014 2015 2016F 2017F
Revenue $8,383,587 $7,743,165 $7,720,698 $7,563,549 $8,546,811 $8,974,152
EBITDA (adjusted)
$844,551 $2,706,150 $993,720 $2,212,485 $2,500,107 $2,625,114
The company’s year-end is September 30th.
3

Business Summary
Opportunity
Coffee Plus is headquartered in Calgary, Alberta. The
company was founded in 1994. Coffee Plus has 23 franchise
locations throughout Canada. The current shareholders are
all in agreement with the sale of Coffee Plus. They will be
leaving behind long-term employees that possess a great
deal of experience. Brendan Wicks and John Mills are willing
to remain in the business after the sale for up to one (1) year
to ensure a smooth transition.
Included in the sale:
• Coffee Plus Ltd. (dba Coffee Plus), also referred to as CP
• Coffee Plus Bakery No. 1, Inc., herein referred to as CPB#1
• Coffee Plus Inc. (Franchise Advertising Management co.),
herein referred to as CP
• Other cafes included, if available at the time of sale (*Note:
not included in the financials):
• Three corporate wholly-owned franchise locations:
1. Calgary , BC
• 0876743 BC LTD Franchise Store (#17 – Calgary)
• Corporate training centre, generates income, used as
write-off, asset value only
2. Vancouver, BC
• CP19 COFFEEHOUSE INC Franchise Store
• Asset value only
3. Ontario, BC
• 0815689 BC Ltd Franchise Store (#03 – Ontario)
History
1994
Coffee Plus Ltd. founded by Brendan Wicks Jess Wicks John Mills
1997
Vancouver BC franchise location opened, the first outside AB
2015
2015 Ontario location open. First in the East Coast
4

Facilities & Business Premises
Alberta
Alberta is a province in Western Canada. Its landscape
encompasses mountains, prairies, desert badlands and vast
coniferous forests. It has more than 600 lakes, and rich mineral
deposits. In the west, the Canadian Rocky Mountain Parks
have glaciers in the Columbia Icefields. The Waterton Glacier
International Peace Park is a biosphere reserve that straddles the
southern border with the USA.
City of Calgary
Calgary, a cosmopolitan Alberta city with numerous skyscrapers,
owes its rapid growth to its status as the centre of Canada’s
oil industry. However, it’s still steeped in the western culture
that earned it the nickname “Cowtown,” evident in the Calgary
Stampede, its massive July rodeo and festival that grew out of
the farming exhibitions once presented here.
Property
The company owns the corporate head office location property.
The mortgage payment is currently $2,910 per month.
• Roasting plant: 2,500 sq. ft.
• Warehouse: 1,200 sq. ft.
• Office: 1,200 sq. ft.
• SB#1: 1,200 sq. ft.
The head office property is included in the sale.
5

Administration & Operations
Company Structure
Shareholders
Table 1: Shareholders
Name Position
Age Shareholding %
Brendan Wicks
President/Chief Executive Officer (CEO)
55
33.3%
Jess Wicks
Chief Production Officer (CPO) 60 33.3%
John Mills
Chief Information Officer (CIO)
52
33.3%
Brendan Wicks currently works on a part-time basis,
approximately 25-30 hours per week. Brendan Wicks’s
responsibilities include managing the general direction of the
business and expanding the business through franchising.
Brendan Wicks is willing to remain in the business after the sale
for up to one (1) year to ensure a smooth transition.
Jess Wicks’s retired September 1, 2015, position is not being refilled.
John Mills works on a part-time basis, approximately 25-30
hours per week. John is willing to remain in the business after
the sale for up to one (1) year to ensure a smooth transition.
7

Administration & Operations
Staff
Coffee Plus head office has eighteen (18) full-time and six (6) part-time employees. These individuals will ensure a smooth
transition for new ownership. Table 2 below outlines Coffee Plus’s key staff:
Table 2: Key Staff
Name Position
Age Length of Service
Employee 1
Purchaser / Bakery Supervisor
32
8 Years
Employee 2
Master Roaster
50
5 Years
Employee 3
Executive Assistant / Project Coordinator
48
8 Years
Employee 4
Payroll, Accounts Payable/Receivable
47
8 Years
Employee 5
Graphic Design / Marketing
59
3 Years
Lisa Brown negotiates with suppliers and handles the bakery and food menu. Lisa currently works on a part-time basis,
approximately 25-30 hours per week. Lisa’s position can be trained over a six (6) month period.
The Master Roaster roasts coffee and supervises warehouse employees.
Suppliers
Coffee Plus is not vulnerable to any suppliers. Lisa Brown
negotiates with suppliers to get the best price.
Lead Times
Coffee is roasted only when ordered by a franchisee and then
delivered the next day.
Legal
The company is not currently involved in any legal proceedings.
8

Administration & Operations
Franchises
There are 42 Coffee Plus Franchise locations, 28 franchise
locations throughout Western Canada and 14 on the east coast.
Three locations (Calgary, Vancouver, and Regina) are corporate
wholly-owned locations. Many locations provide a catering
service and feature comfortable seating, fireplaces, free parking,
free Wi-Fi, great local art and outdoor seating/patios. Three
franchise locations have a drive-through. The cafés have varying
hours of operation.
Several locations have bike racks and/or are located near bus
stops. A few locations have a meeting spaces, book swap, board
games or open mic nights. Current franchise locations and
an overview of menu items can be found in Appendix A and
Appendix B, respectively.
Franchising highlights
West Coast sites:
• Initial franchise fee: $25,000
• Franchise renewal fee:
$2,500
• Two-week training period
• Royalty fee: 4%
• Advertising fee: 2%
Administration & Operations
East Coast sites:
• Initial franchise fee:
$35,000
• Franchise renewal fee:
$3,500
• Two-week training period
• Royalty fee: 6%
• Advertising fee: 4%
9

Current Sales & Marketing Efforts
Current Efforts
Online Marketing
Company Website
(www.CoffeePlus.com)
Twitter
(@Coffeeplus)
Facebook
(/coffeeplus)
YouTube
(/coffeeplus)
Picasa
(/coffeeplus)
FourSquare
(/coffeeplus)
Word-of-mouth/network of
satisfied, past customers
11

Sales Statistics
Figure 2: Coffee plus Historical and Projected Revenues
Consolidated Figures
Consolidated Historical & Projected Revenues
$10,000,000
$9,000,000
$8,500,000
$8,383,587
$7,720,698
$8,546,811
$8,974,152
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$7,743,165
$7,563,549
$0
2012 2013 2014 2015 2016F 2017F
*Consolidated figures: CP and CPB#1
12

Opportunities
Competitive Advantages
There are a number of competitive advantages that make
Coffee plus a unique acquisition opportunity, some of these
advantages include:
• Well-established reputation and brand awareness
o Over 20 years in the industry
o Considered a major franchise brand on Vancouver
Island
• Known for high quality, fresh coffee
o Just-in-time roasting: only roast the coffee when a
franchise/café has made an order and the coffee is
delivered the next day
• Strong relationships with suppliers
• Excellent relationships with franchisees
• Well-documented and operated franchise model
o 42 franchises
o Some franchisees operate more than one Coffee plus
franchise
Recent/Future Developments
The following are recent or future developments planned or
underway by Coffee plus:
• Mobile app for online ordering
Growth Potential
There are numerous avenues of growth that can be explored
by a new owner, some potential areas of growth include:
• Sell more swag/retail items to consumers
• Price increases to chain with long-term planning in place
for retail price increases
• Grocery store wholesale growth
• Franchise the coffee roasting plant or bakery
• Sell master franchise areas
• International growth potential
• Every single cafe opened will increase sales from a
wholesale plant. The current owners believe this number
will rise off-island, given the stronger population
demographics versus Vancouver Island population
demographics. Increasing the chain size should be
relatively easy given the company’s history, trained staff
in place and available procedures information.
For example, say 60 cafes opened at $550K yearly sales per cafe
= $33,000,000.00 net sales
• Expect
o $540,000.00 in Royalties / $360,000.00 in Advertising
o and approximately $1,500,000.00 in manufacturing
sales or more at a 26-28% net of gross sales
• Take-out menu
• Custom bags sizes are developed and in stock, sizes are
250G, 400G, 2270G with a 800G coming soon
13

Appendix A: Current Franchise Locations
Coffee plus Current Franchise locations
Coffee Plus has 24 franchise locations, of which 13 franchise locations throughout Western Canada and 11 on the east coast.
West Coast
1. Vancouver
2. Surrey
3. Burnaby
4. Calgary
5. Regina
6. Saskatoon
7. Edmonton
8. Whistler
9. Banff
10. Kamloops
11. Medicine Hat
East Coast
1. Thunderbay
2. Winnipeg
3. Ottawa
4. Montreal
5. Quebec City
6. Saguenay
7. St John
8. Kingston
9. Torronto
10. Hamilton
11. London
12. Weyburn
13. Kindersley
* Corporate wholly-owned location
15

Appendix B: Franchise Menu Items
Franchise Menu Items
Coffee Plus franchises carry the following menu
items:
Hot
Cold
• Drip
• Iced Americano
• Decaf
• Frappe
• Americano
• Iced Latte
• Cappucino
• Frappe Mocha
• Espresso
• Iced Mocha
• Latte
• Frappe Maccha
• Mocha
Latte
Teas
Edibles
• Hot Chocolate
• Chai Latte
• Maccha Latte
• Tea Misto
• Steamer
• Iced Maccha
Latte
• Iced Tea
• Italian Soda
• Smoothies
• Black
• Chai
• White
• Green
• Maccha
• Breakfast Options
• Bagels
• Quesadillas
• Brioche
• Granola
• Gluten & Sugar
Free
• Chilli & Stew
• Soups & Bisques
• Cookies & Bars
• Hot Apple Cider
• Yerba Mater
• Wraps
Beans
• Mild
• Organic
• Medium
• French Roast
• Smoky
• Bold
• Aribica Intense
• House Blend
• True North Blend
• Veranda Blend
• Rooibos/Herbal
Merchandise
• Reloadable Card
• Coffee Related
Items:
• Travel Mugs and
Tumerblers
• Muffin & Scones
• Lunch & Light
Dinners
• Rolls
• Sandwiches
• Paninis
• Ethiopian
16

Appendix C: Coffee & Tea Industry Overview
Introduction to Canada’s Coffee Industry
Although Canada does not have the appropriate climate for growing coffee, Canadian-based firms do import raw materials for
processing and resale into domestic and export markets. Coffee manufactured for retail and foodservice markets has been an
important component of food and beverage processing in the country for many years.
Coffee is believed to have arrived in North America in 1607 and has been enjoyed by North Americans for centuries. However the
first reference to coffee being drunk in North America was in 1668.
Coffee is the most popular hot beverage in Canada with a total of 14 billion cups consumed annually. An estimated 64% of
Canadians drink coffee each day. Coffee is also the top beverage in the Canadian foodservice category.
Over 30 developing countries export coffee to Canada and those coffee shipments are still an important source of foreign
exchange and job creation in 10-12 Latin American and African countries in terms of their total trade and connection to Canada.
• Internationally – Coffee businesses are involved in a multitude of sustainability initiatives around the world involving
important initiatives in environmental, economic and social arenas and the coffee sector serves as a role model for the breadth
of these initiatives aimed at connecting the many elements of a valuable and complex supply chain.
• Domestically – Coffee businesses drive important sustainability initiatives in store design, recycling and operating practices as
well as supporting many charitable activities.
An Important Social Connector & Quintessential Canadian Activity
• Common social connector at home, at work and in café and restaurant settings
• Most popular beverage other than tap water amongst adult Canadians (16+)
• Two-thirds of adult Canadians enjoy at least one cup of coffee a day
• Of the traditional importing markets for coffee – North America, Europe and Japan, Canada is showing, by a considerable
degree, the fastest sustained growth in the last decade
1
3
2
1
2
3
The Canadian Coffee Industry, Sub-Sector Profile, Agriculture and Agri-Food Canada, Government of Canada, October 2010
Coffee and tea industry trends from the Canadian Coffee and Tea Show, Agriculture and Agri-Food Canada,
Government of Canada,October 2011
The Role of the Coffee Sector in Canada, Coffee Association of Canada
17

Appendix C: Coffee & Tea Industry Overview
Global
Coffee competes with a variety of other non-alcoholic beverages including tea, soft drinks, energy drinks, milk and dairy
beverages, fruit juices, bottled water, sports drinks, vegetable juices, soya beverages, hot chocolate, and low alcohol wine coolers
and ciders.
Figure 2: Global Beverage Market, Total Liquid Volume, 2014
350
300
250
200
150
100
50
0
Bottled Water
Tea
Carbonates
Coffee
Juice
Concentrates
Other Hot Drinks
Sports Drinks
Energy Drinks
Coffee is among the most consumed beverages by volume globally. In 2014, Canada ranked 9th in retail value with $2.1 billion.
Table 3: Top Markets Globally in Retail Value in 2014
Rank
Country
Value ($ billion dollars)
Rank
Country
Value ($ billion dollars)
1
United States
$12.8
6
Russia
$3.7
2
Brazil
$6.4
7
United Kingdom
$2.5
3
Germany
$6.4
8
Italy
$2.4
4
Japan
$4.6
9
Canada
$2.1
5
France
$4.2
10
Mexico
$1.8
Canada has a highly developed away-from-home coffee market and is second only to Italy in highest percentage
of total cups of coffee consumed outside the home.
18

Appendix C: Coffee & Tea Industry Overview
Industry Structure
Coffee and tea represent 1.1% of total food and beverage sales of manufactured goods in Canada.
In 2008, 112 establishments (plants) in the tea and coffee industry shipped $917 million worth of product and employed 2,240
people. Canadian tea and coffee exports totalled $251.2 million in 2008. The Canadian market absorbed the remaining $666
million in domestic shipments and a volume of imports worth $785.2 million. This industry continues to be a net importer.
Figure 3: Tea and Coffee Imports, Exports and Sales of Goods Manufactured, 2008 and 2012
4
Canadian Market Sales of Goods Manufactured
2008: $1,451M
2008: $917M
2012: $1,893M
2012: $1,290M
$1,143M
$785M
$666M
$750M
$540M
$251M
Imports Domestic Shipments
Exports
2008 2012
The Canadian market for tea and coffee was valued at $1,451 million and sales of goods manufactured were valued at $917 million
in 2008. In 2012, the market for tea and coffee was valued at $1,893 million and sales of goods manufactured were valued at
$1,290 million.
4
The Canadian Coffee Industry, Sub-Sector Profile, Agriculture and Agri-Food Canada, Government of Canada, October 2010
19

Appendix C: Coffee & Tea Industry Overview
The majority of tea and coffee processing takes place in Ontario (42 establishments in 2010), Quebec (36 establishments in 2010)
and British Columbia (26 establishments in 2010) as seen in the table below.
Table 4: Number of Establishments (plants) in the Tea and Coffee Industry, 2004-2010
Location 2004 2005 2006 2007 2008 2009 2010
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Canada
2 2 3 3 2 2 4
3 3 2 2 2 2 2
27 47 36 34 37 36 36
38 41 37 41 35 34 42
1 1 1 2 3 3 3
1 •• •• •• •• •• ••
9 9 7 9 10 9 9
22 23 25 26 23 24 26
103 126 111 117 112 111 122
•• Data not available
2010 is the most recent data available from Statistics Canada
Coffee is an age-driven rather than a gender-driven industry. It is the second most consumed beverage, after water, by people
25 and older, and the top beverage of choice for adults, especially those in the 25 to 49 age group. The greatest consumption of
coffee is found in the 50+ age group.
The quick service coffee market in Canada is currently estimated at $3 billion and continues to grow. In 2010, Canadians consumed
1.5 billion cups of coffee from quick service establishments. Quick service restaurants and fast food chains have recognized
the potential of the upscale premium coffee market and are diversifying their coffee offerings to include more sophisticated
beverages, in addition to drip coffee.
Overall coffee consumption at restaurants in 2014 was 2.1 billion servings of coffee.
5
5
The Canadian Coffee Industry, Sub-Sector Profile, Agriculture and Agri-Food Canada, Government of Canada, October 2010
21

Appendix C: Coffee & Tea Industry Overview
Figure 4: Per Capita Coffee Retail Value
Sales (US$, 2014)
Figure 5: Per Capita Specialist Coffee
Shop Transactions (2014)
70
16
60
14
50
12
10
40
8
30
6
20
4
10
2
0
US
Canada
0
US
Canada
Strong Growth despite being a mature and competitive market
Figure 6: Retail Value Sales (Tons)
Figure 7: Retail Value Sales (US$ Bn)
90
2.5
80
70
60
50
40
30
20
10
0
2
1.5
1
0.5
0
2000
2002
2004
2006
2008
2010
2012
2014
2000
2002
2004
2006
2008
2010
2012
2014
22

Appendix C: Coffee & Tea Industry Overview
Trends
Coffee in Canada grew by 19% in off-trade current value
terms in 2014 to reach C$2.3 billion. Meanwhile, off-trade
volume sales rose by a more modest 4%. The much slower
volume performance was due to already high per capita
coffee consumption in Canada. In addition, Canadian
foodservice is very competitive in terms of coffee and
continues to expand. This inevitably affects the retail
performance, as the consumption of coffee has a limit.
As seen in the infographic on the right, a survey released by
the Canadian Coffee Association in 2014 indicated that:
• two-thirds of adult Canadians (65%) consumed coffee in
the past-day
• Approximately 78% of 18-79 year-olds stated that they
had consumed coffee in the past week, while 84% of
Canadian consumers drank coffee in the past year
• On average, coffee drinkers drink 3.2 cups of coffee per
day
• Overall, around three-quarters (78%) of consumers who
drank coffee in the past-day consumed it at-home, while
37% consumed coffee out-of-home.
The demand for fresh coffee beans was supported by a
large number of specialist coffee shops like Starbucks and
expanding grocery retailers, which are likely to remain and
maintain a strong presence. For example, Second Cup has
increased its retail selection of fresh coffee beans across
Canada. In 2014, Second Cup added three whole bean
products and three roast and ground coffees. These coffee
products are popular in foodservice outlets.
6
6
Passport: Coffee in Canada, Euromonitor International, March 2015
23

Appendix C: Coffee & Tea Industry Overview
Differentiation is key across all coffee categories.
Buzzwords in
Consumables
Natural
Organic
Fair
Trade
Non-
GMO
Gluten
Free
Figure 8: Retail Value Sales of Organic Coffee (US $ millions) in Canada
7
250
200
150
100
50
0
2009 2010 2011 2012 2013 2014
7
Euromonitor International
24

25
Appendix C: Coffee & Tea Industry Overview
Table 5: Forecast Retail Sales of Coffee by Category, 2014-2019
8
Volume (tonnes) 2014 2015 2016 2017 2018 2019
% Growth
2014/19
Fresh Coffee
Free Coffee Beans
Fresh Ground Coffee
Fresh Ground Coffee Pods
Standard Fresh Ground Coffee
Instant Coffee
Instant Standard Coffee
Instant Decaffeinated Coffee
Coffee
74,595.90 78,208.50 80,226.70 81,627.10 82,144.40 82,467.40 10.6%
9,716.00 9,991.00 10,245.10 10,481.00 10,687.80 10,888.70 12.1%
64,879.90 68,217.50 69,981.50 71,146.10 71,456.50 71,578.70 10.3%
13,271.70 16,969.20 19,010.10 20,319.80 20,904.40 21,477.10 61.8%
51,608.20 51,248.30 50,971.40 50,826.20 50,552.20 50,101.60 -2.9%
6,116.20 5,904.80 5,682.10 5,453.40 5,236.40 5,036.50 -17.7%
5,769.10 5,572.60 5,365.30 5,152.20 4,950.30 4,765.10 -17.4%
347.10 332.30 316.80 301.20 286.10 271.40 -21.8%
80,712.10 84,113.30 85,908.80 87,080.40 87,380.80 87,504.00 8.4%
Value ($CAD million)
Fresh Coffee
Free Coffee Beans
Fresh Ground Coffee
Fresh Ground Coffee Pods
Standard Fresh Ground Coffee
Instant Coffee
Instant Standard Coffee
Instant Decaffeinated Coffee
Coffee
$2,139.40 $2,485.90 $2,690.80 $2,838.00 $2,924.30 $3,007.80 40.6%
$285.40 $296.40 $307.30 $317.60 $327.50 $337.90 18.4%
$1,854.00 $2,189.40 $2,383.50 $2,520.50 $2,596.80 $2,669.90 44.0%
$1,074.10 $1,400.90 $1,585.10 $1,709.70 $1,774.40 $1,837.60 71.1%
$779.90 $788.50 $798.40 $810.70 $822.40 $832.30 6.7%
$172.50 $166.20 $159.90 $153.70 $147.90 $142.60 -17.3%
$159.40 $153.70 $148.00 $142.40 $137.20 $132.40 -17.0%
$13.10 $12.50 $11.90 $11.30 $10.70 $10.20 -22.1%
$2,311.90 $2,652.00 $2,850.70 $2,991.70 $3,072.20 $3,150.40 36.3%
8
Passport: Coffee in Canada, Euromonitor International, March 2015
Source: Passport: Coffee in Canada, Euromonitor International, March 2015

Appendix C: Coffee & Tea Industry Overview
Competitive Landscape
Canada is a more competitive market.
Specialist Coffee Shop Value Sales Brand Share Breakdown
US Canada
Others Others
Starbucks
Peet’s
Coffee &
Tea
Coffee
Bean &
Tea leaf
Starbucks
Cafe
Depot
Timothy’s
Blenz
Van Houtte
Second
Cup
Important Economic Sector - Sector Size – Coffee Driven Revenue Only
• Grocery / Retail (Future Consumption) estimated $900,000,000
• Foodservice estimated $3.5-4,000,000,000
• Office Coffee Sector estimated $325-400,000,000
• Total Sector Value – estimated total $4.7-5,000,000,000+
There are between four and five thousand independent cafés and coffee shop owners and nearly several thousand franchise
owner-operators. Some six to eight thousand small business owners are directly involved in the coffee focused sector, generating
jobs, considerable economic and community activity and paying taxes to all levels of government. Coffee-focused operations
can be found in all major cities, towns, important crossroads and increasingly in smaller and smaller centres across the country,
making it part of the Canadian lifestyle.
Kraft Canada remains the leading player in coffee in Canada, with a 31% share of retail value sales in 2014. Market saturation is
pushing major companies like Kraft Canada to be more flexible in terms of their offer to reach more consumers.
McDonald’s, one of the strongest players in Canadian foodservice, is still trying to make moves in retail coffee. McDonald’s is
improving its in-restaurant design to highlight the McCafé brand more efficiently and grow visibility. Different shelf designs have
been created to support the different McCafé offerings.
The Second Cup Coffee Co. has aggressively restructured its brand in both the retail and foodservice channels. The recently hired
CEO, Alix Box, has emphasized restructuring and improving below-average performing cafés. Some of its outlets have found it
difficult to remain financially healthy and attract customers.
9
The Role of the Coffee Sector in Canada, Coffee Association of Canada
9
26

Appendix C: Coffee & Tea Industry Overview
Prospects
The concentration of major retail chains has continued to be a challenge to the coffee industry and has resulted in a higher degree
of competition for shelf space. For coffee manufacturers, the domestic market will likely continue to be the most important
market for the foreseeable future. The Canadian market is small, but sophisticated, and extremely well served which means that
competition will continue to be strong.
Restaurants and fast-food chains are major purchasing points for coffee, with some chains focussing on improving the quality
of coffee served. Vending is an important component of distribution for coffee, making it available to consumers at strategic
locations. The continued growth of coffee-themed restaurants will offer ongoing private label and branding opportunities to
Canadian coffee manufacturers. Exposure to premium coffee products at coffee-themed restaurants has enlightened consumers
about coffee quality such that consumers are now seeking these premium products at retail. Products such as iced coffees have
captured the interest of the youth market and have introduced these young consumers to coffee, increasing the chance that they
will continue to be consumers throughout their lives.
Changing consumer demographics has resulted in changing consumer tastes and increased demand for healthy products.
Numerous studies on the health and performance benefits of drinking coffee are emerging.
Over the forecast period, coffee is projected to post a 6% value CAGR at constant 2014 prices to reach C$3.2 billion in 2019. Retail
volume sales are expected to see a more modest 2% CAGR. Canada already has a high per capita coffee consumption rate, which
presents difficulties in driving coffee volumes further. New product development and the consistent launch of new technology
play a key role in encouraging consumers to trying different products. The strength of the category remains the presence of highly
innovative companies, which compete strongly for sales.
Tim Hortons, one of the biggest foodservice players in Canada, has already begun buying beans at higher prices due to market
conditions. The trading price for coffee beans is higher and will probably continue to fluctuate as regions are affected by climate
change. If prices continue to increase and Canadian importers of beans are unable to protect themselves against raw material
price rises, retail/foodservice prices may be higher for consumers. If price fluctuation is temporary, shopping behaviour and
patterns are unlikely to be affected significantly.
Conclusion
Canada is
NOT the
51st State
Growth
Persists
Opportunities
Exist
North America is a highly
important coffee market
Each country has a unique
coffee culture in a different
stage of development
Canada has distinct
opportunities that can be
leveraged
27

Appendix D: Work Cited
2014 Canadian Tea Fact Sheet & Trends. (2014). Retrieved November 2015, from Tea Association of Canada:
http://www.tea.ca/about-us/media-kit/2014-canadian-tea-fact-sheet-trends/
Coffee in Canada: The Role of the Coffee Sector in Canada. (n.d.). Retrieved November 2015, from Coffee Association of Canada:
http://www.coffeeassoc.com/coffee-in-canada/
DIG Insights. (2013). Canadian Coffee Drinking Study 2013 Highlights - INFOGRAPHIC. Retrieved November 2015, from Coffee
Association of Canada: http://www.coffeeassoc.com/coffee-in-canada/canadian-coffee-drinking-study-2013-highlightsinfographic/
Euromonitor International. (March 2015). Passport: Coffee in Canada.
Government of Canada. (2004-2012). CANSIM Table 301-0006, Principal statistics for manufacturing industries, by North American
Industry Classification System (NAICS) Coffee and tea manufacturing 31192. Retrieved November 2015, from Statistics Canada:
http://www5.statcan.gc.ca/cansim/a47
Government of Canada. (2010, October). The Canadian Coffee Industry: Sub-Sector Profile. Retrieved November 2015, from
Agriculture and Agri-Food Canada: http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/byproduct-sector/processed-food-and-beverages/the-canadian-coffee-industry/?id=1172237152079#footnote-4
Government of Canada. (2011, October). Coffee and tea industry trends from the Canadian Coffee and Tea show. Retrieved
November 2015, from Agriculture and Agri-Food Canada.
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