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Coffee Shop Margins: Cut Waste, Boost Profits

Coffee Shop Margins: Cut Waste, Boost Profits

Looking to increase your coffee shop margins? Reducing waste and boosting profits go hand in hand in the world of coffee. Here’s the deal: Food waste is a MAJOR expense. When added together, it’s estimated that the amount of food wasted each year in the US alone can be valued at $218 billion. In the coffee business world, addressing this challenge becomes crucial, urging owners and managers to pinpoint methods that trim down waste and improve margins. Here are a few strategies to do just that.

Key Strategies for Boosting Coffee Shop Margins

While we can’t maximize your profit margins to the tune of hundreds of billions of dollars, Dilworth Coffee got its start as “just” a coffee shop. We learned quite a bit about maximizing coffee shop margins during that time, and now that we supply coffee to shops and stores all over, part of our mission is to share that knowledge with our community. Because you make what we do possible. And when you thrive, we thrive.

Examine Your Coffee Shop Business Plan

Before getting too far into strategies that can help limit waste, it’s time to think about your business plan.

Your business plan is a lot like a map in that if you start with the right one and stick with it, it’s designed to get you exactly where you want to go. Sure, it’s beneficial for securing a business loan when you’re just starting out, but it also connects all of your shop’s investments to your unique goals. It identifies your target market and sales strategy and can shine a light on potential weak spots to make improvements and maximize your profit margins, even after your business is up and running.

Your business plan provides you with a clear vision; it’s the driving force behind your day-to-day operations, and it can also help establish a real connection with your customers who are drawn to your dedication. Most importantly though, your business plan can help you uncover all the hidden details and all the essential tools you need to make smart financial decisions. It compels you to really think about what it is you’re selling and what you absolutely need to bring it to life the way you imagined as part of your vision:

  • How to choose the right coffee for your customers
  • How you acquire food items, cups, napkins, and all other necessities
  • What it takes to make a spectacular cup of coffee
  • What equipment you need to achieve your vision as imagined
  • What essentials you need to run a successful coffee shop
  • What competition you have in the area, and what sets you apart
  • What health codes and compliance regulations you must adhere to in your area
  • What resources you can use to help grow your business

The more informed you are about your industry, your market, and your business, the more insight you will have into how to run it–and how to make wise decisions to reduce waste and maximize profit margins.

Make Smart Buying Decisions, Limit Waste, and Lower Expenses with Dilworth Coffee

Limiting waste to improve coffee shop margins

Choosing the right bean supplier is an essential part of your business plan. Call us biased, but we think Dilworth Coffee is a great supplier. By doing your research about how you source your coffee, how it’s shipped, and what discounts and supports are available, you may find that you can increase your coffee shop profit margin considerably.

Not only does Dilworth Coffee provide you with a wide selection of today's most popular coffees, but we’ll actively help you minimize waste and lower your expenses with programs like our Mix & Match Savings program.

Whether you’re a low-volume or high-volume coffee shop, you can choose from our whole collection of coffees to get the blends and flavors your customers want, at less than wholesale costs. You get exactly the products and roasts you want, and the volumes you need to keep waste to a minimum, all while getting the best deal around. And similar deals exist for some of our allied products like syrups and sauces. What could be better?

(Psst. Actually, we can make it better. In fact, all orders over $1,000 qualify for our Free Freight Program and get free shipping. But no matter how much coffee you need, we’re here to make sure you have all the resources you need to offer up a great blend at a great profit. Smaller orders can still take advantage of fast, free shipping as part of a cost-saving business plan by joining our Freight & More Program.)

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Hone In On Inventory Management to Reduce Waste

Don’t pour money down the drain. One significant way to cut down on waste? Inventory management. By tracking your shop’s coffee and ingredients usage, you can get a better idea of how much you’re actually wasting–and how you can make improvements to your operations to reduce this waste.

Through inventory management, you’ll also discover how to always have just enough on hand so that you don't end up with bagfuls of expired coffee beans or fridgefuls of food items that go unused with no profits to show for them–or have to turn customers away because you don’t have what you need for their daily cup. Inventory management helps you predict what you will need with far greater accuracy and far less waste.

And while you may be old-school when it comes to a classic cup of coffee, sometimes it can pay to be new-school, too. Today’s smart POS systems can track your inventory for you, making the whole inventory management thing way less mysterious.

Examples of waste tracking can include:

  • Bags of expired coffee, cartons of old milk, or other out-of-date, unused food items
  • Wasted coffee grounds after dialing espresso
  • Unsold drip coffee left over after closing

You can also track:

  • Total orders each day
  • Number of drinks sold every day
  • Type of drinks sold every day (and how much of each food item needed for these drinks)

With this kind of information, you can follow your shop’s short-term and long-term trends, limit waste, make data-driven ordering decisions to get the coffee and ingredients you need, and be sure you’ve always got exactly what you need on hand, without quite so much profit-shrinking waste. It’s a smart way to increase your coffee shop profit margin and make the most of your inventory.

Don’t Cry Over Spilled (Oat) Milk

Poll customers to improve coffee shop margins

Two percent. Skim. Whole. Half and half. Heavy cream. Oat milk, Almond milk. Hemp milk. Cashew milk. Pea milk. Microbe milk. There’s a whole menu of milk today that goes way past the stuff we used to pour into our colorful, fruity cereals and enjoy with Saturday morning cartoons as kids.

There are so many options today, and it can be tempting to offer them all to please a wide variety of customers, but this can increase waste and cut into your coffee shop margins. Poll your customers about what kind of milk alternatives they prefer so you can stock only the most popular milk alternatives based on this input as a way to limit waste and boost margins.

Color (Code) Your World to Use Items Before They Expire

You’ve got enough on your plate as it is. We’re in favor of any system that makes your life easier and helps eliminate unnecessary waste. That’s why we love color coding. When you color code your products based on their expiration dates, you–and your whole team–can see which products to use first and which have more time on the shelf or in the fridge.

This color-coding method is especially helpful for all those products you have on hand that have a longer shelf life including:

  • Syrups and sweeteners
  • Milk alternatives
  • Chocolate

Go Green to Minimize Waste

Going green isn’t just good for the planet, it’s good for your bottom line, too. By preventing waste with each order and each cup of coffee, you can maximize profit margins and delight eco-minded consumers as well–which encourages customer loyalty.

A few ideas to cut down on waste and build up profit margins?

  • Pre-weigh coffee for drip brews (which also speeds up operations!)
  • Train your staff on best practices to limit waste
  • Cut down on milk wastage by limiting overfilling steaming containers, and consider an automated milk dispensing system that measures the perfect amount for each order
  • Install a dedicated pitcher rinser to cut down on water and time needed for each order, reducing your overall water bill
  • Get creative with recipes and seasonal menu offerings to see if you can utilize spare ingredients that otherwise might go to waste

Dilworth Coffee: Maximizing Coffee Shop Margins Everywhere Like It’s Our Job (...because well, it is!)

One of the best parts of our job is helping the coffee shops that are part of our community excel. We’ve got over 30 years of experience in specialty coffee, and we’ve taken that knowledge to thousands of coffee shops to grow their businesses.

That’s why consulting is such a big part of what we do. We take a comprehensive look at your whole business, looking at more than just the coffees and the menu but your entire operation, to help you achieve your vision for your coffee shop. Not only can we help you find ways to cut down on waste and boost your coffee shop margins, but we can also:

From our collections of products at great prices to our list of services to better your brand, we’re always here for you. Connect with our coffee professionals today to learn more.

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