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Mystic Monk Case Essay

1120 words - 5 pages

Mystic Monk Coffee

Executive Summary
More funds are needed to establish the new Carmelite Order than exist. Thus, a summary of revenue sources, expense statements, and the business model of Mystic Monk Coffee is presented. The coffee industry is also analyzed. Characteristics of Mystic Monk’s Coffee and how that affects its revenue generation is discussed. An analysis on increasing production capacity and subsequently reaping increased revenues is discussed. Finally, recommendations for converging to full production capacity and revving up marketing are given.
Problem Statement
Father Daniel Mary aimed to establish a new Carmelite Order of the Monks in the Rocky Mountains. The ...view middle of the document...

Production capacity is now limited to 540 lb/day, but a new roaster can be purchased for $35,000 which yields 130 lb/hr.
There are 150 million coffee consumers in America and 89% of those brew coffee at home. 30 million Americans prefer premium quality coffee, which retails for $7 to $10 per 12 oz. Mystic Monk is a premium coffee produced using high quality fair trade Arabica and fair trade / organic Arabica beans which retail for $9.95 per 12oz. Mystic Monk Coffee’s target market is American Catholic coffee drinkers who want to support the monastery. There are currently 69 million American members of the Catholic Church. Mystic Monk Coffee sales are made primarily through its website. A secular website operator can earn 18% on sales to customers directed to the Mystic Monk Coffee website through their websites. An affiliate program also exists where partners can earn 56% of the new affiliate’s commission.
Analysis of Facts
As the Carmelite Order has a $250,000 donation, it could purchase the new roaster, costing $35,000, in cash. The purchase of the new roaster would increase capacity to 23,400 lb/month (assuming a 6 hour workday). This means that 31,200 bags/month retailing at $9.95/bag can be produced. This is an increase of 9,600 more bags/month and an additional revenue of $95,520/month. This represents an opportunity cost to the coffee business if they do not reap the benefits of the additional revenue.
Of course, to reap the benefits of additional revenue, there has to be increased demand for Mystic Monk Coffee. There are 133.5 million people in America who brew their own coffee at home. Of those people, 30 million prefer premium quality coffee. There are also 69 million American members of the Catholic Church. While it is possible that there is some overlap in American Catholic consumers who prefer premium quality coffee, by focusing on only American Catholic consumers, Mystic Monk Coffee is missing out on an entire group to which they could market their product. If they only focus on Catholic coffee drinkers, Mystic Monk Coffee is ignoring 64.5 million potential customers.
Mystic Monk Coffee uses high quality fair trade Arabic and fair trade / organic Arabica beans. The World Fair Trade Organization Cooperative (WFTO) pays growers above market prices to best support the cost of operating their farms. It is possible that Mystic Monk’s Coffee supplier in Seattle...

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