Portola Coffee Essay

1625 Words 7 Pages
Portola Coffee Lab is about specialty coffee. The term ‘specialty coffee was first used by Erna Knutsen, of Knutsen Coffee Ltd. In 1978, Erna used the term ‘specialty coffee’ while giving a speech to the delegates of an international coffee conference in Montreuil, France. The main idea behind specialty coffee is that the coffee beans are well prepared, freshly roasted and properly brewed. Unlike the wine where only one company is responsible for planting, husbandry, harvesting, initial processing and packaging and finally delivering the beverage, coffee on the other hand is delivered to the final consumer after it has exchanged many hands right from the farmers to the millers to the roasters and brewers. According to Specialty
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Also the United States spends $40 billion on coffee each year (http://www.hsph.harvard.edu/news/multimedia-article/facts/). Therefore there is a huge incentive for Portola Coffee Labs to expand its business. There has been a recent trend for specialty coffee. It is known as the third wave coffee. Third wave coffee is about unique coffees that were once blended together and are kept separate, in order to explore potential and possibilities right from seed to cup. The exploration and resulting product is what the third wave is all about. This trend has captured a lot of people’s attention and a lot of awareness is created for specialty coffee which is a good sign for Portola Coffee Labs. Along with the Third wave coffee trend, there has been a trend parallel to it known as the Nano Roaster trend. People want to brew and prepare their own coffee. They are passionate behind the science and quality of the coffee seeds. This is made possible with Nano Roasters available in the market. Portola Coffee Labs share a similar passion which is reflected in their wholesale coffee bean business. Portola has huge potential in capturing this segment of the market and they are already way ahead of competition. Like they say”To be on top, do it first”. The quality of their seeds has already been recognized and appreciated by the Roast magazine by awarding Portola …show more content…
In these three years it has opened only three new locations in Southern California. Therefore it does not cover large geographic areas unlike Starbucks, which has a coffee shop almost at each block. Moreover the three locations are not conveniently located. Also the Portola coffee locations are hard to find, as they are located in the interiors and they do not have drive thru. According to an online survey conducted by the National Coffee Association (NCA) from January 9 to January 26, 2015, 57% of coffee drinkers prefer to buy their drink at a drive thru. When it comes to financials, Portola has a long way to go. As the company is not public it cannot raise capital through the equity market. Therefore business expansion will be difficult. Even if capital is raised through long term loans, it would be difficult to procure highly skilled baristas to prepare specialty coffee. This can result into lack of standardization for Portola products and services. Also specialty coffee requires sophisticated roasting and brewing technology which in turn requires heavy investment. Therefore Portola Coffee Labs need to quickly figure out a way to raise capital to sustain and grow in the long

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