Impact of Changing Seasons on Coffee Demand
Along with the change of seasons, consumer behavior and market trends change. During the cold period, as a rule, there is an increase in the frequency of consumption of hot drinks, including coffee (Samoggia et al., 2021). In contrast, the consumption of cold iced drinks, such as iced lattes or orange coffee, increases in the summer. The marketing field works accordingly, providing consumers with suitable visuals and associations according to the season. In this case, coffee retailers must also adapt, that is, adjust their inventory levels in such a way as to meet the needs of the consumer.
Strategies for Managing Excess Coffee Inventory from Forecasting Errors
Usually, a product like coffee is not too affected by seasonal demand. Despite this, companies can still make forecasting mistakes that result in excess inventory. In addition, irresponsible suppliers or transport providers can cause significant damage (Rushton et al., 2022). Thus, the supply chain must have no restraining practices (Supply Chain Sustainability School, 2012).
In any case, when excess inventory occurs, companies must look for ways to dispose of it. One of the options can be the sale of coffee in discount stores. In addition, a company can take part in charity by providing its product to those in need, thus improving its image. Finally, another option is to create promotional offers with an item as a gift.
Key Demand Forecasting Constraints in the Coffee Supply Chain
Speaking about forecasting constraints within the coffee supply chain, it is worth noting the instability in coffee prices. It can happen due to sudden changes in the weather in the harvesting areas or a lack of grain due to disease. Fluctuations in price complicate the process of forecasting demand for coffee. In addition, changing consumer behavior trends can serve as a forecasting constraint, as it becomes a challenge for demand forecasting. Thus, forecasting errors can occur and become an obstacle to satisfying the consumer’s needs.
References
Rushton, A., Croucher, P., & Baker, P. (2022). The Handbook of logistics and Distribution Management [eBook edition]. Kogan Page.
Samoggia, A., Landuzzi, P., & Vicién, C. E. (2021). Market expansion of caffeine-containing products: Italian and Argentinian yerba mate consumer behavior and health perception. International Journal of Environmental Research and Public Health, 18(15), 1-27. Web.
Supply Chain Sustainability School (2012). Ethical business: Issues in the supply chain [Video]. YouTube. Web.