As a non-coffee drinker, I continue to be perplexed by the market and the lure of the product. It seems bewildering that individuals are willing to pay such a high price for what seems to be just hot water and some coffee granules. However, the success of the industry and the remarkable mark-ups and profits that are on offer would make anyone interested. A cup of instant coffee made at home costs around 10p. Step into a coffee shop on the high street and you are likely to be paying closer to £4.00. That suggests some considerable added value on behalf of the businesses.
Starbucks started in 1971 in Seattle and over the last 45 years has grown from its original store in Pike Place Market to nearly 24,000 locations worldwide. While it took the firm the first 10 years of operating to become profitable, in the two decades from 1987 to 2007 it opened on average two stores a day worldwide.
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