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Sell your business in the food sector

Food for thought for sellers in the food and catering industries

Recent research from has revealed that the food and catering sectors are most appealing to Australian business buyers.

Over a third (34%) of prospective buyers were interested in purchasing a café or restaurant, whilst 30% were looking to buy a food-related business.

Recent developments within the food and catering industries should be leveraged by owners looking to sell.

Home grown sells

Australia is renowned for its ready access to high quality, fresh ingredients. A nation of foodies surrounded by glorious ocean means that there is plenty of competition in the food sector. 

Food businesses for sale range from grocery stores on the Gold Coast through butchers in Sydney and organic farms in Queensland.

Consumers are becoming increasingly fussy about what they want to eat, and are looking for the freshest and most desirable produce, at the right price.

And many foods are flown in from overseas, so they can never be quite as fresh as home-grown produce.

Home-produced products are popular with customers who want to buy local, but many consumers are unaware of the 'Australian Made' labelling system, which can be applied to all sorts of foodstuffs.

Queensland-based horticultural group Growcom conducted an Aussie-wide consumer survey finding that 95% of consumers were not aware of the labelling system. However, 84% of Australian shoppers would rather purchase locally sourced produce because they believe it tastes better, according to craft beer specialist James Squire.

So food-business owners who want to boost the attractiveness of their asset to prospective business buyers may want to take advantage Australian-Made labels in their stores or restaurants wherever possible.

A business for sale whose products bear the hallmarks 'Australia Made' or Australia Grown' labels is one that can tap into a great well of patriotic demand.

A resilient café culture

One of the reasons why coffee shops are so appealing to Australian business buyers is that customers love their 'cup of Joe' on a daily basis... and then some.

The Antipodean love of the flat-white has now grown globally. The recipe made from one part espresso to two parts milk can now be found in every Starbucks and Costa. 

'Australia, unlike other Asian countries, boasts a traditionally strong coffee culture started by European immigrants,' says Datamonitor senior consumer analyst Niraj Lalka.

'Today, coffee drinking has become such an integral part of the Australian lifestyle that it has led to the explosion of many specialised coffee shops further fuelling the growth of the coffee sector.'

So when you're selling a coffee shop, you certainly hold out the promise of strong demand. 

Speaking to the Sydney Morning Herald, Dan Gallo, CEO of Melbourne coffee chain Degani Café, said that the next few years will see Australia face a shortage of quality coffee beans which will mean price increases until supply meets demand:

 ‘A lot of the growing regions at the moment are focused on pushing out the volume which is driven by the cafe market and the cafe market's desire to reduce their operating costs. So a lot of the growers are growing faster and they're growing at lower altitudes to meet that market.’

Coffee shop buyers will be mindful of rising costs. If coffee lovers are already paying more for their daily caffeine hit, then cafe owners must ensure that the bring the best coffee-drinking experience to customers to remain competitive.

However, one of the main reasons for buying a café is that coffee continues to be a recession-proof product that consumers can't get enough of. The big chains are doing well but the industry is evolving. 

There are now speciality coffee houses all over the country with many owners roasting their own beans - again, as customers demand a 'home-grown' experience. This is something you might wish to consider adopting to boost the value of your business.

The true cost of a cup of coffee also makes interesting reading.

In today's prices, the coffee itself costs cafes around 20 to 25 cents with 100mls of milk costing 10 cents - making 30-35 cents the very low total cost of the ingredients. Adding in overheads such as wages, the price of $3.50 to $4.00 represents a huge mark-up of around 300%.

Small wonder that many coffee shops for sale can attract large premiums!

Australia looks set to maintain it’s thriving and unique café culture and as industry revenue is expected to grow by an annualised rate of 7.4% over the next five years, coffee shop owners looking to sell have a lot to smile about.

Take a look at our businesses for sale in the food and catering industries here.

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