UNIVERSITY OF CALOOCAN CITY
Biglang Awa St., Corner Catleya St., EDSA, Caloocan City
COLLEGE OF BUSINESS AND ACCOUNTANCY
A Pricing Plan Presented
to the College of Business
and Accountancy
Pawfee Bean Corporation
In Partial Fulfillment of
the Requirements for
Pricing and Costing
By
Solis, Jasmine Reign S.
May 2023
UNIVERSITY OF CALOOCAN CITY
Biglang Awa St., Corner Catleya St., EDSA, Caloocan City
COLLEGE OF BUSINESS AND ACCOUNTANCY
INTRODUCTION
Coffee Bean and Tea Leaf was established for the first time in 1963. They have been selling premium
coffee and tea in the US and Asia for 50 years. This year is their 50th anniversary. Coffee Bean and Tea
Leaf handcrafts their beverages according to the preferences of their clients in an effort to give them the
greatest possible level of satisfaction. Their renowned customer service has contributed significantly to
their success. Their mission is to "create a spirit within our Company that inspires our Team Members to
provide our Customers with a Total Quality Experience: Quality of Product, Service, and Environment".
Their vision is to be "simply the best roaster and global retailer of coffee and tea." There are currently
more than 900 Coffee Bean and Tea Leaf locations in the US and Asia. With company-owned outlets in
California, Singapore, and Malaysia, it is the largest and oldest privately held specialty coffee and tea
retailer in the United States. With additional locations in Australia, Egypt, India, and Mexico, their
franchises are dispersed throughout the US and Asia. Every year, Coffee Bean and Tea Leaf serves more
than 100 million coffee and tea beverages throughout the world.
The roasted and ground seeds of tropical evergreen African coffee plants are used to make the
beverage known as coffee. One of the top three drinks consumed worldwide and one of the most
lucrative global commodities is coffee. Although coffee serves as the foundation for countless different
beverages, its popularity is primarily due to caffeine, an alkaloid found in coffee. Starbucks is routinely
praised in the industry for being a pioneer in paying top dollar for their coffee beans. However, these
increased prices are frequently paid to a broker and may or may not translate into better profits for the
farmers. More than 99 percent of the company's beans, it claims, are obtained ethically, and it is
determined to getting there. In addition, it wants all of its tea and cocoa to originate from ethical
sources. It does this by employing methods known as Coffee and Farmer Equity (C.A.F.E.) practices,
which are a unique combination of agricultural and economic standards. It cooperates with Conservation
International to advance environmental sustainability. It is one of the largest purchasers of coffee that
has received Fair Trade certification worldwide and several of the company's blends are organically
certified.
Market Analysis
All the stores of The Coffee Bean & Tea Leaf were located at high traffic, high visibility
locations in each market. The market entry strategies use by the coffee shop in managing
their foreign franchisees when expanding into Asia including master franchising and
company owned-stores. A master franchise is a person or entity that provides services to
franchisees in a specified territory, typically a major market, geographical region or even
UNIVERSITY OF CALOOCAN CITY
Biglang Awa St., Corner Catleya St., EDSA, Caloocan City
COLLEGE OF BUSINESS AND ACCOUNTANCY
one or more countries. The marketing approach is essential to gain a
competitive
advantage in the foreign market. The construct included market entry, site location, and
market positioning. The reason is to choose master franchise as its form of franchising is
because of that the master franchising was the most popular mode of entry into distant
band cultural dissimilar market such as Asia. The Coffee Bean & Tea Leaf found that the
sale of a master franchise as a quick method of establishing a franchise operation.
Instead of sub-franchising the units, the master franchisees prefer to own and run the
entire unit. The reason also is too attributed largely to be limited size of the marketplace
as the products are targeted at specific niche rather than the general public.
Market Growth
Coffee Beans Market was valued at USD 29.90 Billion in 2021, and it is expected to
reach USD 50.62 Billion by 2029, exhibiting a CAGR of 6.8 % during the forecast
period (2022-2029) Coffee is becoming one of the most popular beverages in the
world. Hot and cold coffee beverages can be made from a variety of beans and
served in a range of styles, including espresso, cappuccino, and americano. A coffee
bean is a seed of the Coffea plant that is used to make coffee. It is the pip found
within the red or purple fruit known as a coffee cherry. The coffee fruit, like regular
cherries, is classified as a stone fruit. Despite the fact that coffee beans are not
actually beans, they are referred to as such due to their similarity to genuine beans.
Coffee is commonly used to provide an energy boost due to its caffeine content;
however, it is also thought to have health advantages such as decreasing the risk of
liver cancer, protection against Parkinson's disease, and an overall healthier heart.
Arabica and Robusta are the two most commercially important coffee plant kinds;
Arabica accounts for around 60% of global coffee production, while Robusta
accounts for approximately 40%. Arabica beans have 0.8-1.4% caffeine while
Robusta beans have 1.7-4.0% caffeine. Because coffee is one of the world's most
popular drinks, coffee beans are a key cash crop and an important export product,
accounting for more than half of certain developing countries' foreign exchange
revenues. In 2017, 70% of total coffee production was exported, with a total value of
USD 19.9 billion. Over 170 million coffee bags, each containing 60 kg of coffee, were
manufactured worldwide during the 2018/19 marketing year, making it the marketing
year with the largest production levels to date. Following then, worldwide coffee
consumption fell to around 165 million bags. South America produces about half of
the world's coffee: in 2020, around 88 million 60-kilogram bags were packed in this
region. Brazil, in particular, was the country that produced the most coffee bags in
South America and the rest of the globe that year.
UNIVERSITY OF CALOOCAN CITY
Biglang Awa St., Corner Catleya St., EDSA, Caloocan City
COLLEGE OF BUSINESS AND ACCOUNTANCY
Market Share
The global coffee beans market size was valued at USD 27.0 billion and is expected to expand at a
CAGR of 6.7% from 2019 to 2025. Increasing penetration of franchise outlets such as CCD and
Starbucks in India, China, and other countries is the main factor anticipated to drive the market over
the forecast period. Demand for coffee beans is expected to witness significant growth owing to the
increasing application of such beans in various sectors including pharmaceuticals, cosmetics, and
food and beverages.
Coffee is gaining popularity among the young population, especially in India and China. Owing to
growing popularity, various franchise retailers are entering these markets to meet consumer demand.
India has more than 1,400 registered cafés. In China, Starbucks alone has more than 1,500 outlets.
The number of cafes is expected to increase in the coming years, which is expected to fuel demand
for robusta and arabica beans over the forecast period.
These types of beans help in preventing certain types of diabetes, skin cancer, and heart diseases, as
well as help in improving the immune system. Growing awareness related to the health benefits of
these beans has resulted in an increase in consumption among the diabetic population as it helps in
reducing the risk of diabetes type 2. This, in turn, is expected to fuel demand for coffee beans over
the forecast period.
Arabica and robusta beans are widely used owing to their caffeine content. Robusta contains 2.7%
caffeine, which is almost double of 1.5% of arabica. Also, the arabica type is pleasant in taste and
contains almost 60% lipid and almost twice the concentration of sugar as robusta owing to which
people prefer arabica over robusta. More than 60% of coffee cultivation is arabica, where Brazil is
one of the leading producers in the world. Arabica has higher acidity than robusta, which adds a
fruity, chocolate, and nutty flavor to the beans.
Chapter II
Competitor Analysis
US and Asia. Coffee Bean and
Tea Leaf strive to deliver the
maximum satisfaction
UNIVERSITY OF CALOOCAN CITY
Biglang Awa St., Corner Catleya St., EDSA, Caloocan City
COLLEGE OF BUSINESS AND ACCOUNTANCY
to their customers, and do
so by handcrafting their
beverages to the customer’s
preference [ CITATION Fra10 \
l 1033 ]. Much of their success
is due to their well-
known customer service. Their
company vision and mission
revolve around this
fact. Their vision is to be
“simply the best roaster and
global retailer of coffee
and tea”, and their mission is
“to create a spirit within our
Company that
UNIVERSITY OF CALOOCAN CITY
Biglang Awa St., Corner Catleya St., EDSA, Caloocan City
COLLEGE OF BUSINESS AND ACCOUNTANCY
inspires our Team
Members to provide our
customers with a Total Quality
Experience: Quality of Product,
Service and Environment”
[ CITATION Fra10 \l
1033 ].
Coffee Bean and Tea Leaf
currently have over 900 stores
around the US and Asia.
It is the largest and oldest
privately held specialty coffee
and tea retailer in the US
UNIVERSITY OF CALOOCAN CITY
Biglang Awa St., Corner Catleya St., EDSA, Caloocan City
COLLEGE OF BUSINESS AND ACCOUNTANCY
with company owned
stores in California, Arizona,
Singapore and Malaysia. Their
franchises are spread across the
US and Asia, with new stores in
Australia, Egypt,
India and Mexico. Coffee Bean
and Tea Leaf serve over 100
million coffee and tea
beverages every year worldwide
[ CITAT
