SHOPS LOCAL COFFEE

Number Of Participants

Coffee has become an indispensable drink to people across the world. It is a great stimulant that helps people to start their day and boost energy levels. In the Philippines, coffee culture exists as 93% of Filipino homes purchase 3-in-1 coffee mixes once a week, based on the study conducted by Kantar Worldpanel Philippines (Rappler, 2015). Moreover, in Metro Manila and even in highly urbanized areas, many new coffee shops are popping up. These establishments primarily cater to students who play online games, hang out to browse the web, study for upcoming exams, hang out with friends, or even unwind by taking a slow sip of their preferred beverage (Marinduque News, 2019).

In addition, according to Lumawag (2021), Joji Pantoja, the founder and CEO of Coffee For Peace, stated that millennials and those aged between 30 to 40 years old tend to look for coffee that would give them different experiences in terms of how it tastes. Thus, the local demand for coffee will continue to rise as the target market expands and continues to innovate and serve high-quality coffee.

Pattern Of Behavior

Drinking coffee has always been a norm in the Philippines. History states that friars brought coffee to our country over two centuries ago. Comunicaffe International (2015) and Chengappa & Devika (2016) state that it is the most ingested drink next to water, the second most purchased product, following condiments and seasonings, and the second most traded item globally, next to crude oil. Meanwhile, here in the Philippines, both instant coffee and brewed coffee are enjoyed by Filipinos, who consume them almost daily, either for the purpose of being alert or relaxed.

Furthermore, Filipinos have developed a sense of attachment to their favorite coffee shops. In a study by Luat et al. (2022), most respondents (46%) remarked that drinking and eating is their primary motive for going to local coffee shops. Other motivations include relaxation, work, and study; 81% of their respondents consider coffee shops a place for public gatherings (Tumanan & Lansangan, 2012). Meanwhile, in terms of the financial aspect of consumers, Filipino coffee consumers are now willing to pay for a single serving of coffee worth $1.90, which is equivalent to PHP100 (Macdonell, 2022). This means Filipinos are now voluntarily entering cafes or shops to purchase coffee.

Long Period Of Time

Coffee shops in the Philippines have been a rising trend since the mid of 2012 up to the present date, with an 11-year time period (Dacumos, 2021). According to MacDonnell (2022), the years 2020 and 2021 saw a substantial shift in coffee consumption. The Philippines was likewise impacted with consumption falling from 3.4 kg per person in 2019 to 3.05 kg per person in 2020 (Cigaral, 2021) .

CAUSE / S

According to Williams & Marshall Strategy (2020), there is an increase in the consumers’ preference in regards to organic coffee, this due to its environmental and ethical awareness, additionally it is considered safer as it does not contain chemicals and pesticides. Furthermore, the majority of the people that drink coffee prefer local coffee shops because of their highquality, specialized coffee products. This can be supported by Tumanan and Lansangan (2012), which stated that Filipinos have selective preferences for coffee. Despite instant coffee being the the most prominent local household drink, coffee shops allow consumers to appreciate the vibrance of the coffee more.

It was also determined in the same study by Williams & Marshall Strategy that consumers are willing to pay more just for a unique coffee experience. This experience, including how long an individual stays in the place, will most likely develop consumer attachment to coffee shops which results in frequent visits. Furthermore, in the modern digital world, consumers tend to share their experiences on different social media platforms According to a study by Sumerli et al. (2022), social media has a significant effect on local coffee shops. This is because social media marketing allows business owners to interact with and attract their market with their social connections. Hence, it can be concluded that social media is a big factor in the popularization of local coffee shops in the country.

Results from a study by Tumanan and Lansangan (2012) showed that individuals consider coffee shops as social gathering areas in which it is accessible, have a desirable ambiance, can be a venue for group meetings, and can be a relaxing environment to be in. Additionally, it was noted that some advantages of visiting a coffee shop include feeling at home yet away from home, being in a neutral or inclusive setting, and being in a highly spirited environment. This can be applied in the context of Filipino consumers who are mostly students doing their academic tasks, digital nomads working remotely, and simply individuals who love drinking coffee. Ultimately, it is clear that local coffee shops grew popular in the Philippines due to consumer preferences, experience and attachment, social media, and its inclusive and calm environment.

CONSEQUENCE/S

In accordance with the ever-growing trend of coffee shops in the Philippines, according to Williams & Marshall Strategy (2020), local Filipino baristas are exploring new innovations and processes to incorporate into brewing coffee flavors such as using nitrogen to make cold coffees. Similarly, (Pena, 2022) the recent trend of coffee shops has opened opportunities to offer more jobs to the people which allows the strengthening of the local economy. Additionally, according to Cigaral (2021), Filipinos are expected to have a trajectory in the consumption of coffee where an individual drinks 3.78kg of coffee per year by 2025. This means consumers are raising the demand for coffee which leads to a higher consumption and production rate of coffee in the Philippines. Furthermore, (The Philippine Coffee Industry, n.d.) The Filipino population prefers ready-to-drink or instant coffee to cafe-brewed coffees

, regardless, the country has produced 62,000 metric tons of coffee overall in the year 2019 and has consumed 100,000 metric tons.

Charateristics Of A Trend

Local coffee shops are popular because they allow consumers to relax, undertake tasks, and conduct other activities. Furthermore, according to Beldad (2022), coffee is essential to the lives of the majority of Filipinos, and local coffee shops are popular in the Philippines, particularly among workers and students. Coffee has an impact on people not just because it is an essential drink for the majority of Filipinos but also because of the productivity and relaxation it may provide.

According to Sapungan et al. (2019),

iit affects the customer’s choice of coffee in terms of sensory evaluation, price range, and ambiance. Furthermore, the extensive usage of coffee in other nations has an impact on coffee shops in the Philippines, which are built around schools, marketplaces, and other places where most people pass by. Nonetheless, Filipinos are interested not only in the quality of coffee but also in how it is presented to its customers. Furthermore, according to Bolido (2012, as cited in Sapungan et al., 2019), it has become a trend because it impacts not just one’s personal emotions but also consumer productivity and buyer behavior.

To summarize, this might be termed a megatrend because it occurs over a long period of time and influences various parts of people’s lives. According to Mingoy (2022), coffee is more than simply a drink for Filipinos; it helps them be productive throughout the day and enhances their energy. In addition, since the majority of Filipino consumers are students conducting schoolwork and the habit of studying at coffee shops, it impacts the development of numerous coffee shops in urbanized areas and regions.

S.W.O.T ANALYSIS STRENGTHS

As the tourism industry has become one of the biggest and fastestgrowing sectors in the global economy, it is now being prioritized by most countries, including the Philippines. The travel and tourism industry significantly contributes to the Philippines’ GDP (Villegas, 2016, as cited in Suarez et al., 2017, p.131).

From a cultural perspective, coffee shops have become a center and perfect location for social interaction that provides people with a venue to meet, talk, write, read, or pass time, whether with or without company (Suares et al., 2017).

The increasing number of coffee drinkers, especially at the height of the pandemic, opened a door for business-minded people to use this to their advantage, such as opening local coffee shops In a value chain, unique business models can be seen as players using innovative ways to create, capture, and deliver value to customers while reducing costs to remain competitive in the industry (Tan, 2020).

Weaknesses

According to Tan (2020), value chain players must respond to ensure competitive advantage as the country’s coffee consumption increases and its production base decreases.

Due to the increasing amount of people drinking coffee, total exports of coffee beans are declining rapidly, along with the total production of coffee beans, despite the latter being able to stabilize around 2010 (ICO, 2021, as cited in Luat et al., 2021, p.14).

Regarding geographic distribution, some of the local shops are too hidden for people to discover, making it harder for these coffee shops to public Place determin interact with a p (Kleibert, J. M., 2015).

Opportunities

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Threats

The constructive critic that come from the customers may either make or break the business.

More aggressive and fierce competition amongst other local brands that may end up targeting each other’s key segments.

Price increase due to supplier cost that makes customers more price sensitive and finding another brand that costs less than theirs, which results in coffee shops losing