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Assignment Task:

Task:

Listened actively

  • Confirmed relevant policy and procedure requirements, including data storing
  • Clarified the content of the final report
  • Feedback in Comments. ???Demonstrated ability to:
  • Establish task requirements
  • This is evidenced by:
  • Briefing session Summary in Task 2.1A ???Demonstrated ability to:
  • Access source of reliable data according to task requirements and organisational policies and procedures
  • Evaluate reliability of data
  • Store data according to organisational policies and procedures
  • This is evidenced by:
  • List of sources of data in Task 2.1B
  • Evaluation of reliability of data in Task 2.1B
  • Screenshots of stored data in Task 2.1B ???Demonstrated ability to:
  • Select methods of data analysis according to task requirements and industry best practice
  • Categorise data for analysis
  • Analyse and synthesise data according to task requirements, organisational policies and procedures and industry best practice
  • This is evidenced by:
  • Data analysis methods with rationale for choosing those methods in Task 2.2.1
  • Data categorisation in Task 2.2.2
  • Analysis and synthesis of data collected in Task 2.2.3 ???Demonstrated ability to:
  • Conduct statistical analysis to confirm accuracy of data analysis
  • Identify and remove incorrect results
  • This is evidenced by:
  • Confirmation of accuracy of data analysis in Task 2.3.1 ???Demonstrated ability to:
  • Select outcomes that are relevant to purpose of analysis
  • Report on key outcomes
  • This is evidenced by:
  • Report in Task 2.3.2
  • Email to CEO in Task 2.3.3 ???Demonstrated ability to:
  • Store analytics results and report according to organisational policies and procedures
  • This is evidenced by:
  • Screenshots of stored analytic results and report in Task 2.3.4 ???Task Outcome: Satisfactory ? Not Yet Satisfactory ?



Task 2 – Prepare for and analyse dataTask summary and instructions

  • What is this assessment task about? You have been hired as a business consultant by ZHEEM Pty Ltd, (refer to Appendix 1), to provide recommendations on strategic business changes and improvements to respond of the challenges posed by Covid 19 on the industry.
  • The CEO asked you to prepare a report with your recommendations based on the analysis of three different datasets related to:
  • Data from the information provided about Zeemh (Appendix 1)
  • Data you will research about the industry outlook (some data are provided in Appendix 1; however, you may perform additional independent research).
  • Data you will research about current trends in coffee consumption in Australia (some data are provided in Appendix 1; however, you may perform additional independent research).
  • Please note that although some links to assist with your data search and collection are suggested in Appendix 1, you may consider additional sources.
  • Please read Appendix 1 and 2 to support the completion of your assessment.
  • This task comprises of the following assessment methods:
  • Product-based ?Direct observation of Role-Play ?Case Study ?Other (specify) ?It has been designed to evaluate your ability to/competency in:
  • Establish task requirements
  • Access source of reliable data according to task requirements and organisational policies and procedures
  • Evaluate reliability of data
  • Store data according to organisational policies and procedures
  • Select methods of data analysis according to task requirements and industry best practice
  • Categorise data for analysis
  • Analyse and synthesise data according to task requirements, organisational policies and procedures and industry best practice
  • Conduct statistical analysis to confirm accuracy of data analysis
  • Identify and remove incorrect results
  • Select outcomes that are relevant to purpose of analysis
  • Report on key outcomes
  • Store analytics results and report according to organisational policies and procedures
  • Your assessor will be looking for demonstrated evidence of your competency in the above.
  • You are required to address the following:
  • Task 2.1 Prepare for data analysis
  • Attend a briefing session to clarify task requirements
  • Access data
  • Task 2.2 Analyse dataset
  • Select methods of data analysis
  • Categorise the data for analysis
  • Analyse and synthesise data
  • Task 2.3 Finalise data analysis process
  • Confirm accuracy of data analysis
  • Develop a report about the outcomes of the data analysis
  • Submit the report
  • Store analytic results and the report
  • What do I need to do to complete this task satisfactorily? submit the completed assessment tasks, according to instructions,
  • complete the tasks with sufficient detail and present them in a professional manner,
  • use your own words and reference sources appropriately,
  • meet the word count where required,
  • use the scenario provided,
  • use the templates provided where required,
  • for your performance to be deemed satisfactory in this assessment task you must satisfactorily address all of the assessment criteria,
  • if part of this task is not satisfactorily completed you will be asked to complete further assessment to demonstrate satisfactory performance.


Displays integrity in the way we do business.
Shows care and respect for our customers.
3031473128584OwnershipZEEMH is a Proprietary Limited company, 100% Australian owned and operated.  The majority of the company is owned by founders John Cluber (40%) and Marla Bennet (40%). Steven Yun, an investor, owns 20% of the company, and he is also part of the Board of Directors as an executive director.   They have recruited experienced and highly skilled board members.
The coffee-making process

Coffee beans are sourced from selected producers around the world, and they must meet these characteristics:
4107773660Organics and Fair Trade
Be produced in small to medium farms.
Pass the quality control from ZEEMH coffee roaster experts.
The product
Is roasted daily – an efficient inventory process is key to allow for the product to be shipped and re-stocked fast.
Has been awarded several quality prices from Australian coffee associations.
Delivered free of charge for orders over $ 80.00.
It is packaged using earthbags products ( https://www.thepackagingpeople.com.au/product/earth-bags/?gclid=EAIaIQobChMI5K3_zNai3QIViGkqCh2mgQX2EAQYBCABEgIjhvD_BwE )
Sales B2C and B2B
Sales numbers for 2019 and 2020 are reported below-average sale/kg.
B2C 2019 Data 2020 Data
Total Single Customer 620 15% Inactive18% shopped only once29% shopped twice32% shopped more than twice6% shopped more than 5 timesAverage single transaction 2 kg of coffee 902 26% Inactive16% shopped only once22% shopped twice30% shopped more than twice6% shopped more than 5 timesAverage single transaction 2 kg of coffeeIncrease of 5% on prices since 2018
Revenue $ (total-all blends production) $ 252,669.55 $ 366,975.00 B2B 2019 Data 2020 Data
Total Single Business Accounts 320 35% of cafés used Zeemh to work on own customised unique blend.
2% of inactive accounts 380 48% of cafés used Zeemh to work on own customised unique blend.
4% of inactive accounts
Revenue $ (total-all blends production) $ 38,944,471.82 $ 51,214,398.30
B2C
Product Packaging Description
250 gr 500 gr 1 kg Feature blend – premium line with a limited release $ 19.00 $ 36.50   This product changes every three months, and it is a limited seasonal offer.
Espresso – standard line $ 13.00 $ 25.00 $ 46.00 Full-bodied, Italian style coffee with a rich and warm flavours.(This product is made with less prestigious quality beans to meet the price point.)
Espresso – premium line $ 16.00 $ 31.00 $ 56.00 Full-bodied, Italian style coffee with a rich and balanced flavour.
Decaf – standard line only $ 15.00 $ 28.00 $ 52.00 Decaffeinated but just as good as your regular espresso.
Horizon – premium line $ 17.00 $ 33.00 $ 65.00 Rich in flavours, balanced and heavy bodied.
Daylight – standard line $ 14.00 $ 26.00 $ 48.00 Aromatic with a complex finish.
Awake – premium line $ 17.00 $ 33.00 $ 65.00 Complex flavours, intense and full bodied
Intensity – premium line $ 17.00 $ 33.00 $ 65.00 Intense creamy body with a hint of almonds and caramel.
Domain – premium line $ 17.00 $ 33.00 $ 65.00 Delicate flavour with hint of honey and blossom fragrance.
Summer Dream – premium line $ 17.00 $ 33.00 $ 65.00 All round coffee with a smooth and velvety body.
Renascence – standard line $ 14.00 $26.00 $ 48.00 Rich balanced and lively.
Customised blend   $ 55.00 $ 105.00 The customer calls a coffee specialist at ZEEMH, completes a personality test (optional) and discuss its preference to have a special blend designed for him/her.Customised packaging options are also available with this product.
The purchasing cycle for B2C customers is provided below:
B2C Sales 2019-2020
Sales 2019Sales in Kg 2019Sales in $ 2020Sales in Kg 2020Sales in $ Additional Info
Feature blend – premium line with limited release 492 $ 35,915.95 692 $ 50,516.00  
Espresso – standard line 421 $ 23,575.95 280 $ 12,880.00  
Espresso – premium line 0   401 $ 22,456.00 NA in 2019
Decaf – standard line only 320 $ 16,639.95 280 $ 14,560.00  
Horizon – premium line 752 $ 48,879.95 854 $ 55,510.00  
Daylight – standard line 459 $ 22,031.95 421 $ 20,208.00  
Awake – premium line 0   692 $ 44,980.00 NA in 2019
Intensity – premium line 381 $ 24,764.95 491 $ 31,915.00  
Domain – premium line 512 $ 33,279.95 486 $ 31,590.00  
Summer Dream - premium line 221 $ 14,364.95 142 $ 9,230.00  
Renascence – standard line 692 $ 33,215.95 903 $ 43,344.00  
Customised blend 0   183 $ 19,215.00 NA in 2019
Total $   $ 252,669.55   $ 356,404.00  

B2BA strategic alliance has been established with NFB Coffee Equipment Company. A coffee equipment company that produces and distributes coffee equipment for Cafés around Australia. NFB currently serves 22% of Australian cafés.
NFB is awarded a perpetual 3% of the revenue from coffee sales for each café they signed up with ZEEMH.
An industry-standard dose for a coffee is 7 grams per serve. For a 1kg bag, you could expect to get in the range of 60-90 cups depending on strength, double shots and wastage.
Product 500 gr 1 kg Discount Description
Espresso – premium line   $ 45.00 11-15 kg 5%
16-20 kg 8%
21-25 kg 10%
26-30 kg 15%
Full-bodied, Italian style coffee with a rich and warm flavour.
Decaf – standard line only $ 15.00   Decaffeinated.
Horizon – premium line   $ 65.00 Rich in flavours, balanced and heavy-bodied.
Street – premium line   $ 65.00 A slight bitter flavour, decisive and balanced.
Customised blend   $ 95.00 The café' can order a customised blend of coffee.
B2B purchasing decisions by the client base are made considering:
Pricing point
Quality of the coffee
Opportunity to differentiate own café using Zeemh products.
Most businesses would have a manager in charge of purchasing services (in small cafés, this is usually the owner)
Cafés prefer a personal touch in the sales process and value face to face relationships with sales personnel.
Most businesses would look at the terms of payment (the most popular term of payment within Zeemh customers is 30 days from receiving an invoice from Zeemh; few clients pay within 60 days, but they may be charged an extra 5% of the invoice for this arrangements). 78% of clients choose 30 days payment terms, 21% 60 days, and only 1% pays upfront.
B2B clients are very rational in their decision-making process, and they would consider a range of factors such as testimonials from other businesses; recommendations; pricing; quality of service; quality of coffee; how Zeemh meets their business needs; cost savings on own business operations; quality of business relationships with Zeemh personnel.
The purchasing cycle for B2B customers is provided below:

B2B Sales 2019-2020
Sales 2019Sales in Kg 2019Sales in $ 2020Sales in Kg 2020Sales in $ Additional Info
Espresso – premium line 110,000 $ 4,949,999.95 95,000 $ 4,275,000.00  
Decaf – standard line only 26,000 $ 779,999.95 25,800 $ 774,000.00  
Horizon – premium line 0   112,000 $ 7,280,000.00 NA in 2019
Street – premium line 285,000 $ 18,524,999.95 261,000 $ 16,965,000.00  
Customised blend 208,000 $ 19,759,999.95 301,000 $ 28,595,000.00  
Total $ 44,014,999.80   $ 57,889,000.00  
Discount applied % On Total orders Total $ of discount % On Total orders Total $ of discount  
None 2 $ 880,300.00 3 $ 1,736,670.00  
11-15 kg 5% 6 $ 2,508,854.99 4 $ 2,199,782.00  
16-20 kg 8% 9 $ 3,644,441.98 11 $ 5,858,366.80  
21-25 kg 10% 39 $ 15,449,264.93 37 $ 19,277,037.00  
26-30 kg 15% 44 $ 16,461,609.93 45 $ 22,142,542.50  
Total Revenue including discount $ 38,944,471.82   $ 51,214,398.30  

On average, a café would consume 2 kg of coffee/ day. Busy cafés would consume an average of 40-50 kg of coffee/week.
Pricing considerations
ZEEMH premium price structure is justified by:
331667197542Organic and Fair-Trade coffee only
Superior quality coffee beans used for roasting.
Quality of customer service
ZEEMH mark-up on coffee price is on average 100% with the base cost to consider: green coffee cost, transportation, the cost for roasting (equipment, utilities and labour), cost to market and cost to deliver to a customer.
The cost structure is shown below:

Positioning Map
High perceived quality and status
Limited service
Less personal service 22034524066500
Extensive personalised service
Low perceived quality and status
317528511500The typical B2C customer profile for quality coffee
Zeemh positioned itself in the coffee speciality end, focusing on the experience of great coffee. Customers are no longer satisfied with just a quick caffeine fix. They have become more discerning in their preferences, they want to expand their coffee knowledge and with this, comes greater expectations on baristas and café owners to deliver coffee with more complex flavours.
Coffee drinkers tend to be older, with 74% of adults aged 55 and older consuming it daily, versus 50% of those aged 18 to 34. Among coffee drinkers, those younger than 35 tend to drink fewer cups per day on average (1.8) than those aged 35 and older, who consume roughly three cups per day.
Men drink as much coffee as women; each consuming an average of 1.6 cups per day. Women seem to be more concerned about the price than men.
Key B2B segments supplied to:

Independent cafés tend to be small boutique cafés that try to differentiate themselves with a speciality coffee offering, Moreover, 48% of them uses customised coffee blends (and packaging) that Zeemh creates for them.
Strategic DirectionZeemh's strategy is about capturing the higher end of the coffee lovers' market.
ZEEM aims to create a premier brand, so that they can eventually capture market share across broad geographic lines.
Zeemh's competitive edge is:
Quality Coffee
Easy-to-use website
Superior customer service
Coffee blends customisation for clients
The strategic objectives identified by the board of directors are:
Increase brand awareness among B2C and B2B customers
Increase market share among B2C clients by 20% in the next five years.
Expand to international markets.
Increase market share among B2B clients by 5% in the next three years.
Expand the product line to coffee equipment and Zeemh merchandise.
Identify strategic alliances to expand the company's footprint nationally and internationally.
Consider an HR strategic plan to attract and retain talent in the company.
Improve quality management practices to decrease production and logistic costs and establish the brand as synonymous with quality first.
Improve customer retention and loyalty.
An integrated digital marketing campaign is recommended by the board. However, the board has highlighted how the more traditional form of marketing, such as direct marketing, should be integrated into an overall strategy.
Zeemh's clients like a personal approach to sales and interaction with the company.
The board has committed to:
$ 210,000 in marketing expenditure for the next financial year
$ 450,000 in recruitment and improvement of HR practices (including professional development for staff)
$ 190,000 to quality improvement (including enhancements to the roasting facilities in Port Melbourne)
Market Information Excerpt
Source: Ibisworld – Research data further by gathering free access to IbisWorld from the State Library of Victoria https://www.slv.vic.gov.au/
Tea, Coffee and Other Food Manufacturing in Australia
The industry includes cafes and coffee shops that serve food and beverages to customers on-premises. Customers generally order and are served while seated and pay after eating. The industry excludes operators mainly engaged in takeaway food services, restaurant and catering services, the operation of theatre restaurants and selling alcohol for consumption on and off-premises.
Key Trends
Australia's strong cafe culture has helped generate sustained growth for the coffee segment.
Niche players have entered the industry to satisfy consumers looking for high-quality products.
Exports to China have been highly volatile, even before the COVID-19 pandemic.
Tea consumption is projected to decline as younger consumers shift towards other beverages.
Private-label brands are anticipated to place increasing price pressure on the industry.
Increasing consumer demand for premium industry products is projected to support revenue growth.
Consumer preferences have changed over the past five years due to growing health concerns.
Executive Summary
Mixed brew: Revenue has grown despite volatile input prices and international trade.
37365006Operators in the Tea, Coffee and Other Food Manufacturing industry produce a range of food products. Industry products include tea, coffee, prepared meals, salt, yeast, and herbs and spices. Rising health consciousness, consumer incomes, volatile input prices and international trade have all influenced industry revenue over the past five years. These factors have supported demand for some products at the expense of others.
A line chart that shows the annual percentage change in revenue over the past five years and a forecast for the next five years.
View as data table, Chart
The chart has 1 X axis displaying values. Range: 2015.9 to 2026.1.
The chart has 1 Y axis displaying values. Range: -5.5335 to 15.2235.
2026: 3.0%
Overall, industry revenue is expected to increase at an annualised 1.9% over the five years through 2020-21, to $8.2 billion. However, this trend includes an expected revenue decline of 4.6% in the current year, due to the COVID-19 pandemic negatively affecting exports and demand for premium food products. In addition, downstream demand from food-service establishments has been volatile during the COVID-19 pandemic. However, players have benefited from rising demand from the major retailers, such as Coles and Woolworths.

Consumer preferences have changed over the past five years due to growing health concerns, rising demand for foreign foods and increasing demand for premium product lines. These trends have allowed many small-scale niche manufacturers to enter the industry over the period, boosting the number of industry enterprises. However, growing interest in foreign foods has contributed to moderate import pressures on industry operators, limiting industry performance. Exports have declined as a share of revenue over the past five years, despite strong demand for premium Australian food products abroad, particularly in the Asia-Pacific region. The COVID-19 pandemic has disrupted supply chains and reduced demand from overseas markets, further constraining industry performance.
Industry revenue is forecast to grow over the next five years. Demand for premium products is likely to rise as the economy recovers from the downturn caused by the COVID-19 pandemic. In addition, exports are likely to grow as a share of revenue as demand from Asian markets recovers. However, operators are anticipated to face continued pressure from supermarket private-label brands and imported foods over the period. Overall, industry revenue is forecast to increase at an annualised 2.6% over the five years through 2025-26, to $9.3 billion.

Industry products are extremely diverse and include tea, coffee, salt, mayonnaise, condiments and prepared meals. Industry operators have contended with volatile input prices, fluctuations in international trade and private-label brands rapidly developing over the period. However, rising demand has mostly benefited industry manufacturers. Overall, industry revenue is expected to increase at an annualised 1.9% over the five years through 2020-21, to $8.2 billion.
366077579838400The COVID-19 pandemic has caused further volatility in the industry. Exports are expected to decline over the two years through 2020-21, due to decreased demand from many Asian nations, including China, and disrupted supply chains. Supply chain disruption is also expected to constrain import volumes during the pandemic. The pandemic has also had a mixed effect on domestic demand. As many industry products are non-perishable, demand soared during periods of consumer stockpiling during 2020. However, the decline in consumer disposable income in 2020-21 is likely to constrain industry performance, contributing to an expected revenue decline of 4.6% in the current year.
Health consciousness has grown over the period, with consumers increasingly concerned about the amount of fat, sodium and sugar in their diets. This has reduced demand for products perceived as unhealthy, such as salt and certain prepared meals. However, the rising number of busy consumers has helped limit declines in the prepared foods segment.
Consumers are increasingly opting for premium food products, including coffee beans and grounds, and loose-leaf tea. In addition, changing consumer preferences have boosted interest in more exotic meals, driving demand for herbs, spices, flavourings and sauces. Growing interest in specialty foods, premium products and international food products has provided scope for new, smaller players to enter the industry. This trend has boosted enterprise numbers and supported employment growth over the period.
Tea and coffee
Coffee is one of the largest product segments in the industry.
Australia's cafe culture and love of quality coffee have generated sustained growth for the coffee segment over the past five years. Coffee's popularity has encouraged dynamic product innovation through new blends and coffee-related products. Furthermore, consumer tastes have shifted to premium coffee varieties, contributing to revenue growth. However, volatile downstream demand from cafes and coffee shops during the COVID-19 pandemic has reduced the margins of coffee producers, despite a decline in the world price of coffee over the period.
Niche players have entered the industry to satisfy coffee consumers looking for high-quality products over the past five years. These niche markets are generally not catered for by the product ranges of the industry's larger players. The number of coffee machines owned by consumers has grown over the past five years, reflecting increasing demand for premium coffee. Conversely, demand for instant coffee has declined over the period. However, instant coffee continues to make up a large proportion of the industry's coffee segment.
Industry operators also generate a significant amount of revenue through tea manufacturing. Tea producers, particularly loose-leaf and specialty tea makers, have benefited from rising health consciousness over the past five years. For example, the demand for green tea has grown because consumers perceive it as having strong health benefits. Fruit teas and herbal teas have also risen in popularity.
Revenue for the Tea, Coffee and Other Food Manufacturing industry is forecast to grow over the next five years.
A projected recovery in export demand after the COVID-19 pandemic and increasing consumer demand for premium varieties of industry products, such as coffee capsules, are anticipated to support revenue growth over the period. However, ongoing pressure from imports and supermarket private-label brands is likely to limit the overall growth in industry revenue. Overall, industry revenue is forecast to increase at an annualised 2.6% over the five years through 2025-26, to $9.3 billion.

Source: Ibisworld – Research data further by gathering free access to IbisWorld from the State Library of Victoria https://www.slv.vic.gov.au/
Coffee Bean Distributors in Australia
Industry operators primarily supply roasted coffee beans to cafes and coffee shops in Australia. The industry excludes instant and percolated coffee.
Key Trends
Australia's rising coffee culture has supported industry demand.
The popularity of coffee capsules has been constraining demand for roasted coffee beans.
Weaker downstream demand, stemming from the COVID-19 restrictions, has squeezed profit margins.
6286515938500While demand for coffee will grow, industry firms will have to adapt to increasing competition.
Higher expenditure on recreation and culture is anticipated to drive industry expansion.
The instant coffee market will remain the most significant challenge to the industry.
COVID-19 has disrupted Australia's coffee culture and demand from primary downstream markets.
A rise in coffee culture has supported the Coffee Bean Distributors industry over the past five years. However, lockdown and movement restrictions brought on by the COVID-19 pandemic, has disrupted downstream demand over the past two years. Demand from cafes and coffee shops fell significantly over the lockdown periods, with many of these establishments temporarily shutting down due to subdued consumer demand and limited operating capacity. These factors have outstripped any growth over the past five years. As a result, industry revenue is expected to decline at an annualised 0.2% over the five years through 2020-21, to $2.5 billion.
3376295143827500The outbreak of COVID-19 has disrupted Australia's coffee culture and deteriorated demand from primary downstream markets. In March 2020, the Federal Government imposed trading restrictions on all non-essential businesses, limiting cafes, coffee shops and restaurants to takeaway services only. In response, many of these downstream establishments temporarily closed or ceased operations over the lockdown periods, due to difficult trading conditions. Although a shift to homemade coffee among consumers boosted demand from supermarkets and grocery stores, it has exposed the industry to stronger external competition from instant coffee and coffee pods. Nevertheless, easing movement restrictions and the reopening of cafes and coffee shops for dine-in services are anticipated to bolster industry demand in the current year. Industry revenue is expected to grow by 2.6% over 2020-21.
Downstream demand is anticipated to recover over the next five years, driven by rising discretionary incomes and the continued popularity of coffee culture. Industry revenue is forecast to increase at an annualised 1.8% over the five years through 2025-26, to $2.7 billion. Increases in demand from cafes and coffee shops, and expenditure on recreation and culture will likely be key drivers of industry revenue growth. Profit margins are projected to increase over the period, in line with stronger demand for premium coffee beans. However, price competition in the industry is anticipated to remain intense over the period, limiting growth in profitability.

The COVID-19 pandemic has had a significant effect on the industry's performance.
In March 2020, to contain the spread of the virus, the Federal Government imposed restrictions on downstream cafe, coffee shop and restaurant markets, limiting these businesses to takeaway only. Many of these establishments temporarily closed or ceased operations over the lockdown periods, due to subdued demand and limited operation ability. As a result, demand for roasted coffee beans fell sharply over 2019-20, putting downward pressure on industry revenue.
Meanwhile, many households shifted to making coffee at home during the lockdown periods, supporting sales to supermarkets and grocery stores. However, this shift also boosted demand for substitute products, such as coffee pods and instant coffee, hindering demand growth from supermarkets. Nevertheless, the easing of movement restrictions, and the reopening of cafes, coffee shops and restaurants for dine-in services are anticipated to bolster demand for industry products in the current year.

Key drivers
The amount of coffee purchased by consumers influences industry revenue.
Consumers are often more likely to drink instant coffee at home, instead of grinding their own coffee beans. Consequently, most demand for coffee beans comes from cafes and coffee shops. The number of small, independent coffee shops has increased over the past five years, driven by Australia's growing coffee culture. Changes in the world price of coffee also affect industry revenue. However, given that prices of arabica and robusta coffee beans do not always move together, price fluctuations can have a muted effect on industry firms.
As coffee is generally considered a non-staple product, discretionary income influences the industry's performance. Rising expenditure on recreation and culture over the three years through 2018-19 has supported industry revenue, with demand for coffee beans from both restaurants and coffee shops increasing before the imposition of COVID-19 restrictions and the negative economic consequences, such as consumer pessimism.
Industry operators face intensifying competition from coffee capsule distributors due to the popularity of Nestle's Nespresso and other coffee pod machines. These capsules offer some consumers a cheaper and more convenient alternative to freshly roasted coffee. This trend has hindered the industry's performance over the past five years.
Coffee culture in Australia
Australia's coffee culture has been the main factor driving industry revenue growth over the three years through 2018-19.
-825593535500Rising popularity of brunch culture among younger consumers has led consumer to opted for establishments where they can enjoy their coffee with a meal. This trend has prompted many food service establishments to offer coffee in their menus, benefiting industry players. Over the past five years, busy lifestyles have caused many Australians to spend less time at home preparing their own meals, which has driven revenue for coffee shops and cafes. Furthermore, premium coffee presents an affordable luxury that many consumers can indulge in. Demand for premium blends and fair-trade varieties has supported the industry's performance over the period.

  • Industry structure
  • Most coffee consumed in Australia is imported from overseas.
  • Coffee roasters purchase imported green beans from various suppliers, which they then roast and use to formulate their own blends. Once the beans are roasted, they are distributed to restaurants, cafes and coffee shops. Arabica beans account for the largest portion of industry revenue. Roasters commonly distribute their own coffee. As a result, the industry has a limited number of wholesalers. Even smaller roasters, such as Seven Seeds and Industry Beans, tend to enter into contracts with wholesale customers to sell their coffee beans directly. A key success factor for industry operators is establishing good relationships with the end supplier. Larger industry participants, such as Vittoria Coffee, often provide training courses for baristas to ensure that the taste and quality of their products remains consistent across different cafes and coffee shops.
  • 381537782207800Enterprise numbers have risen over the past five years. This growth has been mainly driven by the premiumisation of coffee products, which has opened up many niche markets and encouraged new businesses to enter the industry. A growing number of coffee shops specialising in particular blends of coffee has further supported this trend. Employment numbers have increased in line with growth in industry enterprises over the period.
  • Industry profitability has declined over the past five years, partly due to the outbreak of COVID-19. Weaker downstream demand, stemming from the COVID-19 restrictions, has squeezed profit margins. Furthermore, price competition has intensified over the past five years, as new industry players have entered the market. Industry players have lowered prices to retain market share, which has eroded profitability over the period. However, demand for premium coffee has partially offset the decline in profit, as premium coffee beans generally attract higher margins.
  • The Coffee Bean Distributors industry is projected to recover over the next five years.
  • Rising demand from cafes and coffee shops, on the back of continued growth in Australia's coffee culture and premiumisation trends, is anticipated to be a key drive of industry expansion. Expenditure on recreation and culture is forecast to rise over the period, benefiting the industry as visiting cafes and coffee shops is considered a recreational activity. Rising discretionary incomes and consumer optimism are also anticipated to support demand growth over the next five years. However, rising pressure from coffee pods distributors and increasing internal competition will likely threaten the industry's growth over the period. Overall, industry revenue is projected to grow at an annualised 1.8% over the five years through 2025-26, to $2.7 billion.
  • Demand drivers
  • Demand from cafes and coffee shops is projected to increase over the next five years.
  • This demand is anticipated to be driven by consumers' higher expenditure on recreation and culture, combined with greater discretionary incomes. Furthermore, consumers are anticipated to continue to live busier lifestyles, resulting in less time available to make coffee at home and bolstering demand for coffee at cafes, coffee shops and restaurants. Australia's coffee culture will continue to develop over the next five years, as consumers consistently demand premium and boutique coffee blends and beans.
  • Downstream changes
  • The industry heavily relies on downstream markets, primarily cafes and coffee shops.
  • Consequently, trends affecting the future performance of cafes and coffee shops also affect the industry's outlook. The number of coffee shops is projected to rise over the next five years. An increased range of quality coffee is anticipated to underpin growth in the number of independent cafes and coffee shops over the period. The rising number of independent cafes and coffee shops benefits coffee distributors, as larger chains tend to establish their own roasting houses and distribution networks. However, while demand for coffee is projected to grow over the next five years, industry participants will have to adapt to increasing competition. Industry operators will likely need to invest more in establishing relationships with customers, providing after-sales support and training coffee shop staff. The industry's average wage is projected to grow over the next five years, as experienced roasters and baristas are hired to provide these additional services.
  • Profitability
  • Industry profit margins are projected to expand over the next five years, supported by rising demand for high-margin premium coffee beans.
  • Fluctuations in the world price of coffee will likely affect industry purchases over the period. However, many local distributors will likely enter into fixed supply contracts with upstream suppliers, allowing them to mitigate the effects on input costs. Growing demand for premium coffee blends and fair-trade coffee, which generally attract higher prices, is anticipated to support industry profitability growth. However, price competition is forecast to increase over the period, as the entry of new players forces some existing distributors to lower prices to maintain supply contracts with downstream markets. Subsequently, this price-based competition will likely constrain industry profit margins.
  •  
  • Growing competition
  • Competition in the industry is anticipated to remain high over the next five years.
  • Although coffee shops are growing, instant coffee still maintains a dominant share of the domestic coffee market. Instant coffee is the most common substitute for coffee brewed from roasted beans. Other beverages, such as tea and energy drinks, pose less of a threat to industry demand. The COVID-19 lockdown restrictions have caused a shift to homemade coffee, with many consumers opting for instant coffee due to easier preparation. This trend will likely remain even in a post-COVID-19 environment, hindering industry sales. Industry operators could offset this threat by investing more in marketing to create strong brand awareness among coffee shops and consumers. However, this strategy would require large capital investment and scale of operation, which is difficult to achieve in the industry due to intense internal competition. In addition, coffee pods and Nespresso machines will continue to present a growing challenge for coffee bean distributors over the next five years. Coffee pod machines are restricting demand from supermarkets and grocery stores, with an expanding range of coffee pods reducing shelf space for industry products.
  • Source: Ibisworld – Research data further by gathering free access to IbisWorld from the State Library of Victoria https://www.slv.vic.gov.au/
  • Coffee consumption in Australia
  • 1104908404300Australian coffee culture developed from cafés owned by Greek and Italian migrants, slowly brewing from the post-war immigration boom in the 1950s and 1960s, to becoming a nationwide obsession that is now part of Australia's cultural identity. Over the last decade Australia's coffee imports have more than doubled, likely fuelled by the booming café industry and an ever-increasing appetite for coffee and coffee beverages.
  • In terms of coffee production, Australia is not a major coffee bean producing country. Nonetheless, the Australian coffee market is among the largest in the world. In terms of exports alone, Australia exported nearly 70 million Australian dollars' worth of coffee and coffee substitutes in 2020 and the annual domestic coffee consumption totalled more than 1.9 million 60-kilogram bags. On average, Australians consumed around two kilograms of coffee per person in 2021, out of which 0.7 kilograms were roast coffee and around 1.4 kilograms were instant coffee. However, considering the per capita consumption, Australians are far behind Finland, Scandinavian countries and other European countries, but still among the leading 30 coffee consuming countries.
  • Cafés, restaurants and takeaway services contribute more than 4.5 billion Australian dollars in gross value added to the Australian economy. An estimated 96,000 people will be employed in cafés and coffee shops in Australia in that same year. Regarding coffee consumption and preferences, Australians like their coffee on the go. Around 23 percent of all coffee orders are coffee-to-go orders, ranking Australia fourth behind Japan, the United States and Canada in terms of coffee-to-go. The most popular cup sold in cafés and coffee shops in Australia was the latte, followed by the flat white and the cappuccino. In 2019, the average price for a latte ranged from almost four Australian dollars in Queensland, Victoria and the Australian capital territory to over 3.6 Australian dollars in the Northern Territory and New South Wales.
  • (Source: https://www.statista.com/topics/4615/coffee-market-in-australia/#dossierSummary__chapter1 )
  • Useful Links for additional research
  • IBIS World free access to IbisWorld from the State Library of Victoria https://www.slv.vic.gov.au/
  • Australian Bureau of Statistics https://www.abs.gov.au/
  • AUSTRALIA COFFEE MARKET - GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2021 - 2026) https://www.mordorintelligence.com/industry-reports/australia-coffee-market
  • Australian attitudes towards coffee https://mccrindle.com.au/insights/blogarchive/australian-attitudes-towards-coffee/
  • 10 Key Coffee Statistics Australia Needs to Know https://whatasleep.com.au/blog/coffee-statistics-australia/
  • Pandemic Habits: Coffee drinking has changed in Australia https://www.adnews.com.au/news/pandemic-habits-coffee-drinking-has-changed-in-australia
  • Distribution of coffee consumption at home during the coronavirus (COVID-19) outbreak in Australia as of March 22, 2020 by type https://www.statista.com/statistics/1118657/australia-distribution-coffee-consumption-at-home-during-covid-19-by-type/
  • Coping with COVID-19 https://www.beanscenemag.com.au/coping-with-covid-19/
  • Appendix 2 – Data Management Policy and ProceduresDefinitions
  • Corporate data: Data is the representation of facts as text, numbers, graphics, images, sound or video. Corporate data is data that is captured through the operation of ZHEEM Pty Ltd (ZHEEM). It can include, but is not restricted to staff data, customer data, financial data, facilities data, curriculum data, etc.
  • Personal data: Personal data is data where a person’s identity is apparent or can reasonably be ascertained. Note that a person’s name is not necessary for data to be personal.
  • Master data: Master data is data about the business entities that provide context for business transactions. It is the authoritative and most accurate data available and is used to establish the context for corporate data.
  • Reference data: Reference data is used to classify or categorise other data. It can include, but is not restricted to, status codes, state abbreviations, demographic fields, etc.
  • 1. Purpose of procedures
  • These procedures provide guidance and direction on the management of corporate data throughout the information lifecycle.
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  • 2. Scope and application
  • These procedures apply to ZHEEM corporate data in all formats. These procedures are further supported by guidelines and other local documents as identified.
  • Research data procedures align with the Australian Code for the Responsible Conduct of Research.
  • 3. Data governance
  • ZHEEM corporate data management activities exist to manage the data assets of ZHEEM effectively and efficiently. With a focus on continuous improvement, the data management policy contributes to decisions on the collection and management of data, proactively defines data rules, resolves data issues, and fosters an organisational approach to data handling.
  • Data management reports about process improvements must be minuted during departmental meetings and added to the continuous improvement register for action.
  • 4. Data management
  • 4.1 Corporate data should be collected only when known and documented uses and value exist.
  • 4.2 Collection of accurate and complete data is expected.
  • 4.3 ZHEEM collects and uses personal data about its customers, staff and others in order to operate effectively. Personal data held by ZHEEM is collected and managed in a responsible, secure manner, in compliance with the Information Privacy Principles.
  • Guidance on Information Privacy is covered in the Information Management policy.
  • Access to personal data within ZHEEM is restricted to authorised staff with business process requirement.
  • 4.4 For accountability and stewardship, all data must have a defined Data Steward responsible for accuracy, integrity, and security of data. Data Stewards are responsible for ensuring that all legal, regulatory, and policy requirements are met in relation to specific data assets. Departmental Managers are the Data Stewards.
  • 4.5 Where practical, data should be recorded in an auditable and traceable manner using Shared Points and the Cloud according to the individual data management systems in use.
  • 4.6 Whilst data re-use is encouraged, data duplication is discouraged. For integrity, data should be entered only once, and any duplication of the collection or storage of data needs approval of the relevant Data Steward and reported to HR. Staff should collaborate to prevent the storage of duplicate data assets, wherever possible referring to an organisational single source of truth rather than saving a local copy.
  • 4.7 The timely destruction of data is essential for effective management. Corporate records are destroyed after fulfilling the minimum retention period prescribed by the relevant legislation and regulation. Retention periods in records authorities consider business, legal and government requirements and ZHEEM uses several general and agency-specific authorities to determine retention, destruction and transfer actions for its records.
  • 4.8 Processes for data capture, validation and processing should be automated wherever possible.
  • 4.9 Business processes must ensure the maintenance of reliable data. All corporate data management practices in ZHEEM are to be in accordance with these procedures and related policy.
  • 4.10 Data Stewards are responsible for identifying training requirements for their data domain/s and ensuring appropriate training is in place.
  • 5. Master data management
  • IT supports master data services for the organisation. Commonly used corporate data is held within the Data Hub based on rules provided by the Data Stewards to ensure consistency and integrity. The Data Hub data is distributed to various systems upon agreement with the Data Stewards regarding usage.
  • 6. Data domains
  • Information systems may operate across multiple data domains and, where necessary, multiple Data Stewards may be required to work collaboratively on data in a single system.
  • 7. Data quality
  • A collaborative approach for addressing enterprise data quality issues is critical to maintaining data integrity. Data quality issues relating to accuracy, completeness, duplication and/or currency of data, or changes to business processes impacting on data collection and recording, should be provided to HR and the issue recorded in the Data Quality Register under the Continuous Improvement Register. It will then be assigned to the appropriate Data Steward who will conduct preliminary/root cause investigation, evaluation of possible solutions, and a proposed solution. The Data Steward may call on Data Administrators and other members of ZHEEM to assist in this step. Outcomes will be presented at the next Management meeting and escalated, where required, to IT. The Data Steward is responsible for the implementation of a solution to resolve the data quality issue in collaboration with IT.
  • At times, an identified data quality issue will be outside the responsibilities of the assigned Data Steward. In these instances, it may take further resources to identify the root cause and propose a solution.
  • Data must be collected from reputable sources.
  • Conduct and manage data research with honesty and integrity.
  • Respect research participants.
  • Demonstrate good stewardship of resources used to conduct research.
  • Appropriately acknowledge the role of others in research.
  • Communicate research results responsibly.
  • When researching and analysing data and information, ZHEEM follows these principles:
  • Principle demonstrated by:
  • Honesty in the development, undertaking and reporting of research Presenting information truthfully and accurately in proposing, conducting and reporting research.
  • Rigour in the development, undertaking and reporting of research Underpinning research by attention to detail and robust methodology, avoiding or acknowledging biases.
  • Transparency in declaring interests and reporting research methodology, data and findings Share and communicate research methodology, data and findings openly, responsibly and accurately.
  • Disclosing and managing conflicts of interest.
  • Fairness in the treatment of others Treating others involved in the research fairly and with respect.
  • Appropriately referencing and citing the work of others.
  • Giving credit, including authorship where appropriate, to those who have contributed to the research.
  • Respect for research participants, the wider community, animals and the environment Treating others that are affected by the research with care and respect, giving appropriate consideration to the needs of minority groups or vulnerable people.
  • Ensuring that respect underpins all decisions and actions related to the care and use of animals in research.
  • Minimise adverse effects of the research on the environment.
  • Accountability for the development, undertaking and reporting of research Complying with relevant legislation, policies and guidelines.
  • Ensuring good stewardship of public resources used to conduct research.
  • Considering the consequences and outcomes of research prior to its communication.
  • Outcome of research and data analysis must be presented in a professional and ethical manner following the directives provided by the Data Steward.
  • 8. Data accessibility
  • ZHEEM, rather than any individual or department, owns corporate data. A culture of data sharing is encouraged, and data must be readily available to staff with a legitimate business need. Data is a corporate asset to which all staff should have access to do their jobs, except where the nature of the data requires restriction.
  • 9. Data security
  • Data must be protected from unauthorised access and modification.
  • Classify data as follows:
  • Public - data created with the intention of being in the public domain, that is publicly available and unlikely to impact on the reputation of ZHEEM, another organisation or individuals
  • General Internal - that is not generally made publicly available, and release of such information may cause minor impact on the reputation of ZHEEM
  • Protected - confidential ZHEEM data with limited access with unauthorised disclosure, modification; data that includes personally identifiable information, is commercially sensitive e.g. salary information, contracts, medical/health records etc and if released could cause reputational harm or embarrassment to ZHEEM e.g. budget data, customer records, planning or purchasing documents
  • Restricted - strictly confidential or sensitive ZHEEM information e.g. budget data, customer records, planning or purchasing documents, restricted to individuals who are explicitly granted access with unauthorised disclosure, modification or destruction and if released is most likely to cause reputational harm or embarrassment to ZHEEM, other organisation or individual, compromise Australia’s national security, national interests, economy, stability, integrity or damage international relations or defence
  • 10. Roles and responsibilities
  • Assigning responsibilities to data management ensures data is appropriately identified and managed throughout its lifecycle and is accessible to appropriate stakeholders. ZHEEM adopts a collaborative model for data accountability, with a focus on data stewardship, and not data ownership.
  •  
  •   Role Responsibilities Appointed by
  • Data Governance HR Providing leadership, direction and strategic advice on the planning and delivery of information management best practice in alignment with ZHEEM Strategic Plan. Board of Directors
  • Data Management Management Group Convene to make decisions about the treatment of data assets. CEO
  • Data Steward For accountability and stewardship, all data must have a defined Data Steward responsible for accuracy, integrity, and security of data. Data management, authority and accountability for data assets within their allocated data domain. This includes ensuring: Data value to the organisation is fully realised. Data is shared to the maximum extent possible in accordance with security requirements. Data quality is actively maintained to a high standard. Business process for the data is established. Concerns of others relating to data assets under their care are addressed. Management Group
  • Data Administrator Administration of data assets, as directed by the relevant Data Steward. This includes Understanding the business process, value, security level, and risks of the data set. Monitoring data quality. Data Steward
  • Data User Adherence to policies, procedures and guidelines to ensure data quality and security is maintained.  

 

 

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