New Coffee Indulgence

Product Description
Eiskaffee is a very popular coffee drink in Germany. It essentially is an ice cream, coffee float where ice cream is placed on top of a steaming cup of coffee for dessert. What I wish to do is take that concept and commercialize it with a few added tweaks. My product will be a bite-sized ice cream pop, kept at a certain temperature, that can be stirred into any hot beverage as a flavored sweetener. Ideally, this small piece of ice cream melts off of the stick and into the coffee, thus slightly cooling the coffee and giving it the perfect flavor. It replaces the need to find sugar, milk, flavored syrup, and/or a stirrer for your coffee customization because this product provides all of that in “one scoop.”

Market Analysis
Germany was the first to sell this concept called Eiskaffee in local restaurants and dessert bars, where they put a large scoop of ice cream on top of coffee for dessert. The market for this treat has experienced more growth over the past decade than any other coffee beverage in Germany. In addition to the market for Germany’s Eiskafee, there are many other markets around the world for coffees that use flavored syrups, sugars, honey, and flavored milk to create sweet, tasty coffee. Starbucks has been a major component in the growth in popularity for fast-serve, sweet coffee. However, no one has commercialized the use of ice cream as a sweetener yet in the hot coffee market.

Niche and Product Benefits
As a single-serve, ice cream pop for coffee, this product would have an exclusive niche in the market for sugars and sweeteners. As the tiny piece of ice cream melts off of the stick, the consumer can also use the stick as a stirrer and, without any additional steps, take a sip of a hot, perfectly flavored cup of coffee without burning themselves.

Moreover, this product has immense flexibility in its appeal to a wide range of market segments. For instance, to appeal to health fanatics, this bite-sized piece of ice cream can have a line of tasty 0-Calorie pops with added health benefits that competing sweeteners lack. To meet the variety of desired flavors consumers want in their coffee, this ice cream can also come in a plethora of flavors from chocolate to raspberry to anything the target market demands. For those consumers who want to bring this product home with them, it can be sold in retail stores across the nation in packs of 10 – 20.

Financials
As this industry is highly price-sensitive, my product will be sold at $0.95/pop. Since it replaces the need for additional milk, creamer, sugar, and/or syrup, this price is untouched by any latte retailer. For example, Starbucks charges on average an additional $1.80 to add milk and sweetener to their coffees, however, at $0.95, my coffee sweetener costs the consumer $0.85 less to do the same thing.

As far as expenses are concerned, according to the IBISWorld reports on the cost of ice cream production, the cost of producing this ice cream product will be approximately 57% of revenue. The key production inputs such as milk, sugar, and glucose represent the biggest expenses. Startup costs will be well over half a million as we will need to purchase large-scale equipment and assets such as industrial mixers and factory buildings. Revenue will come from bulk sales to retailers such as Target and Starbucks and from ice cream retailers like Ben & Jerry’s that will want to sell their ice cream through us using our patented technology. According to the average profit models for ice cream retailers and coffee creamer and sweetener companies, our expected profit will be approximately 16.5% of revenue.