Assessing the livability of the city something that is quite vague, and there are many different opinions and that everyone thinks to be reasonable. Perhaps what the Chinese think as livable city would not be acceptable to the Americans; what the Japanese government identified as a livable city would equally be unacceptable by the common Japanese people; and the Europeans have different opinions about their livable cities, so the concept of "livability" is the most favored word in policies. It is so easy to be falsified and can be used almost at will.
Many people know that Starbucks is from the United States, but there are not many people who know how many cafés are there in the United States. According to a recent research report by Mintel, a market research company in the United States, the number of cafés in the U.S. market in 2017 was close to 33,000. In the United States today, the main places where fine coffee is popular have been concentrated in some areas where urbanization is still active in the past two years, such as New York, San Francisco and Portland in Oregon. These large American cities are densely populated. The city has boosted the emergence of cafés, and the number of coffee shops driving the U.S. market has increased by 16% from five years ago.
In urban thought and industry research activities, cafés are always a very good observation and research object. In 2014, Dunkin' Donuts decided to supply deep roast coffee drinks in the store, this was the time when the U.S. market began to take a serious look at this competitor of Starbucks. In 2016, it opened 297 new stores across the United States, selling coffee for $2.89, which is another option for the new consumers who are used to posher cafés. As for Starbucks's traditional competitors the independent cafés, not only they did not increase in numbers in 2016, their numbers dwindled. There are also coffee shop owners, company executives and industry insiders who have begun warning the coffee industry that there might be huge liquidations.
Dave Burwick, CEO of Peet's Coffee once remarked that the retail industry is crowded and not everyone will be able to survive for a few years. This brand often referred to as the "leader of the second wave coffee", opened its first Chinese store in Shanghai in October this year, with the support of Hillhouse Capital, which is also its first store in the overseas market. About two months ago, the famous boutique coffee brand Blue Bottle accepted Nestlé's US$500 million capital injection, which accounted for 68% of the shares, and plans to double the number of stores in the next few years, from 29 to 55; at the same time the company will also develop ready-to-drink coffee products. These small regional chain coffee brands have now accepted capital investment and began to expand,and giants like JAB Holding have been buying coffee brands in recent years, and this reflects the increase of the number of coffee shops. The annual growth rate of the total number of coffee shops in the United States is expected to be 2%, which is actually the slowest in the past 6 years. Mintel also expects that the annual growth rate will further decline in the next few years.
The biggest problem is urbanization and the hopeless urban planning. Some boutique coffee shops are often open in densely populated areas, and the rental would be rather high. New York has more than 1,600 coffee shops. According to RentHop, SoHo is the area most concentrated with coffee shops and has the monthly rent of $4,300. Once the cost price has raised to this point, no matter how high the enthusiasm and demand for coffee in American cities, the coffee industry has all to lose.
The impact of cities on business is the same in Europe, and whether such impact is good or bad is closely related to the city's development model. Italy is the birthplace of the espresso coffee, and it is the country with the largest number of cafés per capita in Europe. The country with a population of 60 million has 100,000 cafés, a large part of them are independent cafés, and the Italians drink coffee all day long. In Europe, Italy's efforts in conserving of cities, especially the old cities, are quite strict, which means urbanization has not damaged the original structures of the cities. The commercial cost of the street is relatively stable; this is an important guarantee for the stable development of Italian cafés. It is also an important advantage of urban livability in Italy.
The situation in China is actually similar, and the livability of the city is clearly related to the number of cafés. China's per capita coffee consumption is generally lower than the world average, but the coffee consumption market is developing rapidly. According to a 2017 report, the number of Chinese cafés has exceeded 100,000, and the coffee consumption market has grown at an annual rate of 16%, much higher than the world average. Moreover, in China's coffee market, the number of cafés in the four largest cities with high population density in China, namely Beijing, Shanghai, Guangzhou, and Shenzhen accounted for 15.7% of the national total. Among these four first-tier cities, Shanghai, with a relatively high population density and street structure has the most cafés and the highest standard of operations.
Looking at the café industry from the perspective of the POD (pedestrian-oriented development) principle, to enjoy good café businesses, there should be an increase of the density of the city and supported by the population size. However, the density of a city cannot be achieved if the city relies on vehicle transportation, as vehicles would occupy a lot of land resources. Therefore, the establishment of the pedestrian system is a way to increase the density of the city, at the same time is also a powerful way to increase the commercialization of urban streets; Hong Kong is such an urbanization model.
The Italian café industry is doing rather well, and it has a lot to do with the development model of the Italian cities without destroying the street structures. Italian cities have a good pedestrian system; the livability of the actual cities is closely linked with such a system. The pedestrian system continuously sends tourists, pedestrians, and customers to the street commercial facilities, which is convenient for consumers and enhances the establishments' business value. The kind of cities that exist because of vehicles would have wider roads and bigger squares, and cafés would be harder to survive in such an environment. Many emerging cities in China like Shandong, Inner Mongolia and Hebei would fall into the latter category; the livability of the cities merely fulfills the residential function.
Final analysis conclusion:
The café industry is a microcosm of urban street business; the implementation of the POD principle determines the sustainability of urban prosperity and the real city livability. In the future, Chinese cities need to be reorganized and transformed according to the POD principle to enhance livability and generate greater commercial prosperity.
