Maven Coffee Challenge

Introduction

This report provides a data-driven strategy to a group of investors looking to break into the US coffee market. The insights leverage the data from "The Great American Coffee Taste Test", conducted by YouTube coffee expert James Hoffmann and Cometeer. In this test experiment, participants were shipped four different coffees (in the form of frozen coffee extracts), asked to rate the coffees, and answer some additional questions.

Objective

The goal of this report is to:

(i) Identify the target audience and understand their coffee preferences (ii) Suggest a tailored product offering (iii) Develop an effective pricing strategy

Methodology

Data from around 4000 respondent from "The Great American Coffee Taste Test" was analyzed using Excel and Power BI to identify trends and patterns in customer preferences. Exploratory data analysis was conducted to focus on the relevant questions for this analysis, leading to exclusion of all experiment related questions. The data did not require further cleaning, but multiple choice questions were unpivoted and some answers were grouped into "Other" buckets.

To understand the target audience, I focused on breaking down respondents by the key demographics: gender, age, employment status and number of children. I also dived into some of their preferences, such as daily coffee cups consumed and the preferred strength of their coffee.

For product offering analysis, I looked further into the target audience preferences to determine the optimal mix of coffee options. Key factors considered included caffeine content, roast level and coffee addition preferences, along with a list of favorite coffee drinks.

Pricing strategy was developed based on coffee equipment spending and average monthly coffee spending. In addition, price sensitivity was addressed by analyzing actual payment versus the willingness to pay.

Key findings & recommendations

Target audience: Based on the data analysis, the target audience appears to be young, male professionals aged between 25 and 44. This demographic segment typically does not have children, indicating that they may prioritize their professional careers at this stage of life. With the current increase of hybrid working models, the product offerings should focus on providing high-quality coffee to appeal to this audience. They can be incentivized to visit the coffee shop either during their lunch breaks or for informal meetings by offering takeaway options and creating a welcoming atmosphere. Additionally, implementing a corporate discount or loyalty program could encourage repeat purchases and enhance engagement with the brand.

Product Offering: Based on the analysis, it's recommended to prioritize quality over quantity in the product offerings of the coffee shop. The menu should feature a limited range of coffee drinks, focusing on full-caffeine options and key additions such as milk, dairy alternatives, sugar, and other sweeteners. By offering a curated selection of coffee drinks, including options like pourover, latte, regular drip coffee, cappuccino, and espresso, the preferences of over half of the respondents can be accommodated.

Pricing Strategy: The target audience has strong preference for good, quality coffee and they are willing to pay a premium to get this. Therefore, the coffee shop can justify slightly higher prices than the competitors. However, the prices should also ensure that the competitiveness within the local market is maintained.

The recommendations are based on the data collected from the survey respondents and it is important to recognize that they may not necessarily reflect the preferences of the entire US population. Since the participants voluntarily signed up for the survey, they likely have a higher interest in coffee compared to the average American. Therefore, it's advisable to supplement these findings with additional market research and customer surveys to gain a more comprehensive understanding of the current coffee industry landscape and the preferences of a broader audience. This will help ensure that the coffee shop's strategies are well-informed and tailored to meet the needs and expectations of the wider market.