Australia Cafe Market Situation 2018

Specialty Coffee Industry in Australia has reached peak maturity and saturation evident by an array of niche offerings exhibiting high end market fragmentation.
New innovative retail concepts, coupled with creative nuanced food and beverage offerings combine with social media to maintain growth in a highly competitive market.
Complimentary to this are end to end supply chain innovations where we are seeing milk producers, coffee producers and equipment producers also take chase and innovate.
We are at risk of confusing the customer with the plethora of offerings. However for the time beinh customers are benefiting the most.
Extreme competion virtically has afforded the consumer more choice than ever before at more locations and at lower prices. However upward pressure in the rental market coupled with downward pressure on retail spending is pushing the industry to a potential crisis point.
Wages are high in Australia and while interest rates are low and households are able to maintain their lifestyle spending retailers are able to break even with cost cutting and innovation, however a small interest rate rise may dry up the discretionary spending of most consumers in 2018-2020.
Email me for an industry SWOT analysis.


Purple cow with a selfie stick! 

Seth Godin came out with this book called “purple cow”  because in a mass market you need to stand out (basic summary of the entire book). 

The problem is there is no more mass market! Professor Professor Jeff Jarvis said there will never be another Elvis,  there will never be another Michael Jackson,  because when everybody’s famous nobody is famous. 
Girls on Twitch playing games have 4 million followers, a fish bowl with a camera attached as 400,000 followers, the teenager dancing has 40 million views… 

We are certainly  in a post-mass-market era with very few options to stand out such as the Super Bowl or the presidential debate where everybody is watching. So, when everybody is watching everything all the time nobody is watching anything ever. 

I suppose the purple cow for this era is a purple cow with a selfie stick! That purple cow isn’t only about standing out in a crowd, she is about being genuine and expressing herself with authenticity and generosity so as to build community. Seth has a book along this elided called Tribes. 

I have more to say on this matter in another post perhaps however suffice to say that there has been a tectonic shift in society when the roots of scarcity and secrecy are being removed and replaced with abundance and generosity. 

Phenomenon such as WikiLeaks, Brexit, Trump are simply a symptom of a large change in society. For now….

I mean how can a purple cow stand out when theres plenty of purple cows on Snapchat? When there’s a purple cow being milked on  vine? When there’s animated purple cow gifs and memos,  and moments,  and trends, and feeds, and 60 million other things? 

6 billion of the world’s 7 billion people have access to at least 2G data so there are no more purple cow there are only purple thumbs. 

Fathers in business

I want to honour business leaders who are selfless, who mentor others, who do not compromise relationship yet live by principles. I want to honour coffee professionals who have proven that you can elevate people above opinion.

In the end relationship will win over sheer strenuous pushing. God rewards those who love others, who give, who are willing when it’s right to take a blow for your fellow worker.

Leadership requires us to take compliments for others’ achievements and to take the punishment for other people’s mistakes.

Leadership is Fathering. We lead to create a wake for others to follow.

There is a reason why many of the most popular movies in Hollywood are centred around a character that is an orphan.

Spiderman had no parents, lived with his aunty.
Superman had no planet, no parents
Harry Potter was an orphan
Rio the bird is sold to a stranger
Meet the Robinson’s, orphan
Batman, orphan
Tangled, estranged from kingdom and family.
Frozen, two orphan girls.
Snow white, orphan.
Cinderella, orphan
Star wars, orphan, estranged from his father.
Lion king
The list goes on…

The reality is we all feel orphaned
because we are in a world where there are few Fathers.

Whether we call it mentoring, or vision casting, or leadership, (or in the church world, ‘apostles’), we are designed to come under the covering of a Fathering, loving, caring leader. And to be that to others.

As business leaders we need to take up the divine call of Fathering.

Using the word “covering” helps us to make sense of this unseen power of submitting to healthy leadership.

As leaders we must provide safe and empowering places for people, customers, staff and family to grow.

Coverings are safe places of protection and empowerment. An umbrella is a covering. Clothes are a covering. Vision is a covering. Your goals in business provide a kind structure, a safety, a covering for what we put our time to. A motto in a similar way keep our activities in line with our purpose. Purpose and Fathering are divinely connected. We are a covering for others.

Business is an amazing opportunity to father metaphorically orphaned children.

My highest aim is to mentor an entire industry of orphans. To change landscapes. To build rivers in the desert and oasis in the wilderness.


Cafe Audits

I am making available a service to specialty cafes that can be invaluable to discovering faults in their coffee and service. This collaborates with roasteries as well where you and the roastery can find objective information on espresso quality and service.

Mystery Shopper $240

During busy service (usually Saturday or Sunday) I will come to your cafe and order espressos, milk-based drinks and a takeaway. This also includes a competitor analysis of the same attributes at 2-3 local cafes. Staff will be assessed on timeliness, cleanliness, product knowledge, and customer service. The venue will be assessed and compared to its competitors and you will be given a full report. The whole operation takes about 3 hours including report writing and competitor analysis. There is an optional $180, 60 minute discussion session where suggestion on improvements will be made.

Mystery Shopping Includes:

  • Covert operation during peak times
  • 2-3 dine in beverage analysis (see below)
  • 1 takeaway beverage analysis
  • Drink analysis
  • Competitor analysis
  • SWOT

Espresso Beverage Analysis $360

Beverage analysis and espresso quality audits are performed in store in collaboration with staff. Audit includes interview with staff around espresso knowledge, a critical appraisal of bar operations and a beverage audit during both peak and off peak times.

The aim of this critical and objective exercise is to expose all blind spots and improve quality in the cup overall. It is guaranteed that if your staff are lacking the skills or equipment to perform the task of preparing specialty grade, award winning coffees that it will be in my report:

Beverage Analysis:

  • Consistency of espresso volume (yield)
  • Consistency of dose (ground coffee)
  • Consistency of time/volumetrics
  • Accuracy of drink (flat white, cappuccino, etc)
  • Taste of drink (1-6)
  • Taste likeness to roast description
  • Temperature
  • Presentation of drink
  • Consistency across all drinks (Poor to Excellent)


  • Wait time
  • Cleanliness
  • Wastage including milk and coffee
  • Customer service
  • Staff knowledge
  • Water quality and filter effectiveness
  • Machine operation and parts assessment
  • Milk quality and wastage
  • Bean freshness, rotation and wastage
  • Presentation and brewing techniques

There is no doubt that this activity can help any cafe no matter how famous or successful. All will be revealed by this exercise.

Bookings to be made 2 weeks in advance by contacting Jonathon Sciola on 0466418990 or


Bad Experiences


It’s not just product and service complaints that will lose customers. Don’t forget bad experiences.

Bad experiences are where your staff are actually arguing with a customer about an incorrect order rather than solving the problem. Or the air conditioning isn’t working on a stinking hot day. Or your bartender is flirting with all the women making them feel uncomfortable.

Here are some stats from data analyst and marketer Tristan Lovell from Business Weather

96% of unhappy customers do not complain, but 91% of those will simply leave and never come back

It takes 12 positive experiences to make up for one negative

95% of unhappy customers will return if an issue is resolved quickly

The struggle with most small business owners – especially those in hospitality – is they are spending too much time in their business whereas they need to spend at least 30% of their time on their business.

The eMyth by Michael Gerber is a mandatory read for any cafe who I open up and mentor. It outlines that a business owner must wear three hats:

1. Entrepreneur
2. Manager
3. Technician.

A cafe example would be the barista leaving their cafe to open their own cafe. They have the zeal and passion of the entrepreneur however likely do not have the equipment of a manager. The tax, lease and legal obligations not to mention staff management will be what floats or kills their boat.

What does this have to do with bad experiences? Everything. Culture is determined by the restauranteur or cafe owner/ operator and a cafe owner who is not seeing their business from a Birdseye view from time to time will create a toxic workplace and steam away customers.

Here are 10 things a successful entrepreneur does:

1. Sets goals and never looks back
2. Plans
3. Focus. Focus. Focus.
4. Doesn’t listen to naysayers
5. Predict trends rather than follow fads
6. Invest heavily using other people’s finance
7. Take risk
8. Create contingencies
9. Outsource all weaknesses
10. Side steps the industry when necessary creating new markets.

How To Delete Unwanted Urbanspoon Reviews?


Where should we go for coffee dear?
The reality of this mobile, geolocation empowered world is that customers decide whether or not to visit your cafe or restaurant before they’ve been there.

They will see a “like” tally on Urbanspoon where anything less than 80% makes people nervous. “Maybe I won’t have a great experience either?” “Surely 200 people can’t be wrong”

They see an 8.0 or a 5.0! on beanhunter and know what your coffee tastes like.

The simple answer is urbanspoon is a closed community where you cannot delete reviews – and that’s a good thing – however there are 5 things you can do to boost your social credibility and communicate with your customers:

1. Promote yourself – Urbanspoon is only 1 social network. List your business on:

  • Google Places
  • Google Plus
  • Yelp
  • Facebook
  • Local Council business listing
  • A blog site

2. Encourage bloggers to come and review your cafe. You can see blogger reviews are more impacting than customer reviews:


3. Engage in conversations with your customers online via these social platforms: Instagram, Twitter , Facebook , Foursquare

4. Listen! Actually change your operations , staff, products or services when there is a clear message to you.

5. Implement a Customer Expectation Management System such as Business weather. Visit These guys measure and analyse real feedback in real time.

Collaborative Shared Workplace Cafe


In a market where differentiation, specialty coffee and customer service are key, the sub segment known as “Collaborative Workspace” or Workplace Cafe” is a viable option for any young entrepreneur.

Since the demise of manufacturing in the eighties (the remnants of which are seen in current media and automotive sectors as well as whole foods) what has replaced those industries are services. While products were the boom of the post Industrial Age surely we are in a service Age where architects, graphic designers and IT professionals replace not only much of the production of GDP for the country but also bolster the employment sector.

The offer of a cafe that doubles as a workplace is enticing for any service-based professional. To risk being over zealous I want to list some of the industries that would benefit from a workplace cafe;

  • Small business owners
  • Micro Businesses
  • Lawyers , architects , specialists
  • Programmer and coders
  • Students
  • Architects and designers
  • The list goes on
  • What is more to the point is that research clearly shows that those who work in a shared workspace make more money! Doesn’t that make sense? A lawyer in the same cafe as an accountant would benefit from cross-referrals. If the workplace cafe thought of itself as a business incubator it would do well.

    A collaborative workspace is a place where freelance service providers such as architects, students, small business owners, graphic designers and so on work in an environment where mutually beneficial goals take place in a symbiotic environment – one that is profitable for the cafe and the local community.

    There are high density office cities such as Richmond however the cost of renting an office for a small business means there are mutual benefits for the cafe and the business owner:

  • The business owner has a quiet place to work
  • The business owner has a professional environment to meet clients
  • The business owner has access to free or charged wifi and power
  • The cafe has access to all the clients drinking tea and coffee
  • The cafe has the opportunity to over satisfy this target markets in a way that drives up barriers to entry
  • The cafe benefits from patronage – and can even charges a rental that includes redirecting postage to the cafe, conference rooms and print services.

    Instead of fighting those clients who steal your wifi and stay all day drinking coffee why don’t you over satisfy them and make yourself an addictive product for them to buy on a daily basis.

    Statistics show that collaborative workers earn an immediate 80-90% more than those who work on their own.

    If you like this concept Jonathon Sciola can write you a business plan for a collaborative workplace cafe for $2,200 (including first years cash-flow projections for an additional $500)



    Wheel of Coffee

    wheel Like the spokes of a wheel your coffee (and your life!) will have a bumpy ride if one or more of your spokes are out of line. If your financial world is strong and healthy, yet your family or physical world is out of line you will be unable to enjoy the money! If you have fresh, boutique roasted coffee, and yet your boiler temp is set too high – guess what? You’re going to have burned coffee! As a specialist barista and wholesale manager for over fifty cafes and now a corporate cafe mentor setting up cafes I saw many cafes that look like this bike! They may have groovy hipster baristas, and specialty coffee, BUT their grinder hadn’t been serviced for 2000 kilos! The bluntness of the burrs were causing uneven extraction and the result: bad coffee!  

    When the wheel of your coffee is balanced your coffee and your cafe will be balanced.

    Like the spokes on a bicycle your coffee must have all 8 straight spokes or you’re in for a bumpy ride! If one of the eight spokes is bent then you’re going to be peddling too hard for little reward.

    1. Beans – Of course you need fresh roasted, high quality beans. How do you know if the beans you are brewing are high quality? Well, beans are graded! Anything over 86* points is considered specialty. Your roaster should be educating you as to what components are in your blend, why they are in there, what your blend is designed to achieve, and what the rating is for the specialty grade of each bean. You need to know how they are roasted and what the solubility is breach bean, and how you can best extract them. Your blend shouldn’t be changing this all the time; twice a year is suffice.

    2. Recipe – It is time to move towards an objective approach to brewing espresso. It is no longer acceptable to play guesswork when serving coffee to your customers. You need a map of brew weight (yield in grams), brew time, and dose (in grams) to navigate around the only objective number in coffee: extraction yield. This is a percentage that falls between 18-24%. Coffee NEVER EVERY EVER tastes good outside of these percentages. 3. Equipment – I wont be naming brands, however you need quality, clean, and functioning equipment. If your shower screens are bent, you will immediately lose 30% of the quality of your coffee. If you’re burrs are blunt you will immediately lose 30% of the quality of your espresso and so on.

    3. Workflow – is a critical spoke in your wheel of coffee. Who does what role and when? Who pulls the shots? At what time or level of busyness do you put on a second or third barista. Who’s in charge anyway? This needs to be nailed to the wall.

    wheel2A basic methodology for workflow is:

    • 1 barista on shots – quality control. This person directs speed.
    • 1 barista on milk. This person directs flow.
    • 1 barista on floor (waiter) this person restocks.

    When a busy period comes you can add 1 person to milk and perhaps the floor staff pour milk as well.

    In my experience this spoke is the number 1 broken spoke and the number 1 cause of bad coffee.

    4. Staff – Number 1 for staff are staff who want to be at work. This is a human resources issue and is a complex one. It involves the skills and availability of the staff member, and the rewards and respect given to the staff by the company. This is a combination of pay (remuneration), awards, recognition, development and community.

    5. Suppliers – a key spoke in your wheel are good suppliers, with quality products and the right price. A Vitasoy will ruin a soy coffee. A Pura will ruin a milk latte. A bad coffee company will ruin your cafe. One of the most damaging spokes to your wheel as I have observed are unsatisfactory coffee suppliers who do not train and support cafes. If you have a coffee supplier you are not happy with: change.

    6. Location – This is a key attribute. You need a good, accessible location where people are wanting good coffee.

    7. Service – Your staff and the atmosphere around your cafe must be conducive to coffee excellence.

    8. Complimentary products/service – This is around the issue competitive advantage. The reality is that even if your Wheel of Coffee is 100% and your food is 10% you will suffer on the coffee front.

    *Technically it’s 80 but unofficially it’s 84 amongst many, same as CoE

    Dangers of Entering A Franchise

    Australia protects franchisees. I have still seen horror stories. I am not however talking about them. I’ve seen families lose everything. I’ve seen multinational franchisors go bankrupt and fly home shamed. 20131114-200851.jpg

    Today I’m talking about simple competitiveness. It is simply impossible to compete in a highly competitive environment when you are in a tightly controlled licence agreement.

    Now I am not saying all franchises are bad. I’ve seen Salsa’s (Boost Juice’s Mexican brand) open in Northland Preston only to be valued at $1million within a year. Success! Franchises offer the following benefits to a Franchisee:

    – Minimal Planning
    – Branding & Marketing
    Turnkey business processes
    – Customer service manuals
    – Refined products and services
    – Brand equity
    – Support

    However if you are a cafe or any other business in a highly competitive market place being a franchise may mean your hands are tied:

  • You can’t change the price of your coffee
  • You can’t change coffee providers
  • You may not be able to change suppliers
  • You cannot change any of the marketing – even adding a sign or a black board to your counter!
  • In these times of extreme competition and the remnant of a global financial crisis be aware of the benefits and the limitations of becoming a franchisee.

    Consider the benefits however please do your research.

    If you are in trouble please visit


    Focus Versus Cost Paradigm of Cafe Living


    Many cafes focus overly on cost cutting to the point where it Is a distraction to core business offerings. The classic example in hospitality is using an inferior soy product such as Vitasoy Soy because is cheaper. This year I convinced one of my clients to switch to Bonsoy and we immediately went from 1-2 litres of soy per day to over 10-15 litres a day.

    Would you prefer to save $0.15 cents on 10 soy coffees a day ($1.50 savings) or sell 150 soy products ($4.50 x 150 = $675.00 a day!)

    Part of this challenge is to focus on enlargement. Do not focus on small things. Have a big personality and a big expectation. I always expect to be busy so I am always stoked and ready for maximum thrashing.
    The attempt to save money on soy was costing us over $4000 per week. . This is only the beginning!

    Listen to me if you want to optimise your business and stop ruining it for the sake of cost-saving:

    Come on this journey with me…

    First ask:

    What is my core competency:

    Core competency is defined as “is fundamental knowledge ability or expertise in a specific subject area or skill set”. These are examples of what your competency might be:

    – Excellent customer service
    – Speedy Delivery
    – Quality specialty coffee
    – Food: International head chef

    Then ask :

    What are the values I adhere to:

    – paying my bills on time
    – Keeping costs down
    – loyalty with my suppliers
    – Paying staff well and above award
    – No tolerance on tardiness

    Now there will be a conflict between your core competencies and your values at some stage. I’ve seen this happen. For example you stick with a long term supplier who’s product is inferior because of loyalty. This negatively affects your competency in food.

    The answer is: Focus focus. Focus. Do not compromise what you are good at for the sake of cost savings.