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Brewing Up Business
You are working for a boutique beverage chain based in New York City. Your client, the owner, currently specializes in selling high-end teas and is now exploring an expansion into the drip coffee market. To guide this potential move, they’ve asked you to estimate the size of the New York City coffee market. Note: we are focusing specifically on drip coffee sold only in New York City. Please provide your estimate in revenue ($).
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📋 Solution:
Brewing Up Business
Step 1: Segment the Market
We’ll segment by consumer lifestyle, which correlates well with coffee-buying frequency:
- Students & Part-Time Workers (ages 18–30, lower income/flex schedule)
- Commuting Professionals (ages 22–55, full-time workers)
- Retirees & Other Adults (ages 55+, fewer work-related purchases)
Step 2: Estimate the Population in Each Segment
Start with NYC’s total population (~8.5 million), assume 80% are adults → ~6.8 million adults.
- Commuting Professionals: 45% of adults → ~3.06 million
- Students/Part-Time Workers: 25% of adults → ~1.7 million
- Retirees/Other Adults: 30% of adults → ~2.04 million
Step 3: Estimate % Who Drink Drip Coffee
- Professionals: 70% drink drip → ~2.14 million
- Students: 50% drink drip → ~850,000
- Retirees: 40% drink drip → ~820,000
Step 4: Estimate Consumption Frequency
- Professionals: 5 cups/week → ~260 cups/year
- Students: 3 cups/week → ~156 cups/year
- Retirees: 2 cups/week → ~104 cups/year
Step 5: Calculate Annual Revenue by Segment (Using $3/Cup)
- Professionals: 2.14M × 260 × $3 = $1.67 billion
- Students: 850K × 156 × $3 = $398 million
- Retirees: 820K × 104 × $3 = $256 million
Step 6: Add It All Up
Total NYC Drip Coffee Market (on-premise, at $3/cup):
≈ $2.32 billion per year