Figure 1: Elasticities of demand for premium artisanal coffee bean subscriptions

Extract A

The expansion of direct-to-consumer gourmet subscription services

RoastMaster Select currently has 400,000 UK subscribers, who typically pay £16.50 a month to the specialty roasting firm. At this price, subscribers receive two bags of single-origin beans monthly. The demand for curated subscription boxes boomed during the expansion of remote working, but growth has slowed recently as local artisan shops reopened and rivals like BeanVoyage entered the digital market.

To maintain its market share, RoastMaster Select launched 'OriginSelect' at the end of 2022, securing exclusive micro-lot coffees such as the Geisha variety from high-altitude farms, which cost over £80,000 to secure in exclusive contracts.

However, global supply chain pressures and climate factors have driven up the costs of sourcing high-grade arabica. Consumers expect sustainably sourced, compostable packaging, and certifying direct-trade channels is expensive.

In 2023, RoastMaster Select raised the monthly price of its premium subscription package by £2.50 to £19.00. Fortunately for the firm, subscriber demand has shown itself to be highly price inelastic. Just 3% of active members in a focus group stated they would cancel their subscription following the price increase.

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