The Australian coffee industry has seen a tremendous growth over the years. The stakes are rising and so are the revenues and this $4.3 billion industry is expected to grow by another 2.37% in the next few years (Hefferman, 2015). The coffee industry has in fact, helped the nation make it through the 2012 global economic downturn (Smith, 2012).
Demand, supply and production.
A report made by IBIS World titled ‘Coffee Shops in Australia 2014, describes the nation's fastest growing industry, talking about consumer trends and the sector's projected growth. There has been a huge demand for gourmet coffee and the public’s expectations have increased and although the supply has been generous enough to cause a wave of caffeine addiction through the country, there is still a notable imbalance between the demand and supply. This relationship is expected to improve with increased consumer education and increased production. The states of New South Wales and Queensland have remained the largest producers of high-quality coffee for over a century now and are making constant efforts to improve the production rate even more (Smith, 2016).
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However, intensified cost pressures have at times led to narrower profit margins. There could be an increase in the installation of quality products and equipment for further customer satisfaction (Bowling, 2015). With the popularisation of coffee, the industry has benefitted manyfold. An annual growth in revenue is expected to be over 8.4% by 2016. Competitive pressures have however, reduced the profit margins significantly over the past few years (Smith,