Please Review : Coffee Consumption

Studies suggest that an average coffee drinker’s consumption of coffee increases with age, from age 10 through age 60. Even after age 60, coffee consumption remains high. The average cola drinker’s consumption of cola, however, declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider transferring our investments from Cola Loca to Early Bird Coffee.”




The business plan suggests that the firm considering transferring investments from Cola Loca to Early Bird Coffee based on the findings on consumption trends. The firm's conclusions is based solely on this piece of information and fails to consider other sources and logic. Before a transfer of investments should be made, there needs to be more consideration of other population changes, consumer trends and alternate investments.
The plan factors in the prediction that older demographic will increase over the next 20 years. However, it fails to factor the possibility of other demographic growth. If for instance, we see a large growth in under 18 demographic, then there a case to increase investments in Cola Loca.
Additionally given the recent discoveries in health and medicine we might see a change in consumer behavior. Given the access to stronger medicine, there may be groups who might not be as concerned about their health or vice versa and change their consumption behaviors accordingly.
Lastly it would be beneficial to consider other investments beyond Early bird coffee and Cola Loca. Perhaps consumers wants healthier versions of soda or coffee. Perhaps they have an aversion to caffiene and are looking for caffiene-free options. The age trend is simply not enough to make such a decision.
Given there exists multiple alternatives and factors that play into consumption, it would be best for the firm to explore additional studies before making a decisions. Additionally, it would be in their best interest to widen their scope if feasible to explore how they can best add or optimize their portfolio.