With demand for traditional coffee flatlining and iced beverages spiking, the team at The Alchemy Cordial Company share their tips for boosting café sales beyond the morning rush.
Traditionally, cafés have been an early bird’s game. With many coffee venues opening at dawn to catch the morning commuters and then closing after lunch when cravings for caffeine diminish, Australian café workers have often had late afternoons at their leisure.
However, the dynamics of running a café are changing. Now, with rising costs across the board and shifting consumer habits, many business owners can’t rely solely on the morning coffee rush. To overcome increasing rents, they need a steady stream of income throughout the day.
It’s a challenge Alchemy Cordial Founder Michael Bishop is witnessing more frequently in the Australian hospitality scene, but one he also believes he has a solution to. Observing the unrelenting rise of iced and signature drinks in the international café space, Michael is confident the chilled movement can be used as a vehicle to increase sales, especially in the afternoon and evening.
“Over the past couple of years, iced strawberry matcha has taken the world by storm. It’s part of a wider trend for iced drinks that’s been driven by Gen Z, the 13- to 28-year-olds who haven’t grown up as part of the coffee landscape,” says Michael.
“They want drinks that are visually spectacular, like the layers of the iced flavoured matcha, so they can share them on social media and be validated by their friends. Coffee is literally too beige for them. They want colour, excitement, and newness.”
Gen Z’s spending power
Michael believes the café industry is experiencing something of an aging out process, in which the latest wave of under 30s aren’t drinking coffee in the same way as the generation before them. While Gen Z is the age group with the highest spending power, it’s estimated only about 40 to 50 per cent of those born between 1997 and 2012 drink coffee, compared to Millennials which sits at about 70 per cent.
“Coffee isn’t going anywhere – it’s a low price, legal drug that does fantastic things for the people who enjoy it. However, there is a growing demographic who aren’t drinking it, therefore we need something to attract them into the café space,” he says.
“Iced and signature drinks are hugely popular on social media and young people are looking to experience what they’ve seen online in real life. These beverages have great potential, not only to attract new customers but also to increase profitability.”
He uses iced coffee as an example. A regular eight-ounce hot latte might be priced at $5.50, whereas a 12-ounce iced latte often comes in at around $8 – the only difference in ingredients being the addition of four ounces of ice.
“There’s a reason that 75 per cent of Starbucks drinks now are cold. Iced drinks unlock more revenue at a lower cost of goods,” says Michael.
“The creative iced beverages younger consumers are looking for don’t require expensive ingredients. Many simply call for a premium syrup or smoothie blend alongside core ingredients already integral to the café’s operation.”
The post-lunch slump
While many cafés have traditionally closed after lunch, Michael sees opportunity to increase revenue by keeping the doors open longer.
“Any café owner will tell you coffee sales tank after 1pm. Your ability to pay rent as a café ends at this time unless you’ve got a reason for people to come back or make their first visit of the day,” he says.
“A great iced drink menu will attract the after school and university crowd who’ve got pocket money coming out of their ears. They want to outdo their friends by sharing images on social of their blueberry iced matcha or cold brew with tiramisu foam.
“This generation is also drinking less alcohol, so they need social spaces to hang out after university or work. Many aren’t spending $16 on a pint of beer or a cocktail, so they’re happy to spend $12 on an amazing-looking signature drink.”
Social media might be a key to attracting this new group of customers, yet Michael says strong signage – both outside the venue to entice people in and at the point of sale – is also essential.
“You need to shout about the incredible concoctions your baristas have created. Post them on social media, have an A-frame sign outside with the seasonal specials, and have another sign at your point of sale so they can be gently upsold when ordering,” he says.
Sourcing inspiration
While Michael thinks the matcha hype hasn’t reached its peak, he does believe one of the secrets to success with signature and chilled drinks menus is offering concoctions that are new, exciting, and in line with industry trends.
“Source inspiration online and then give the drinks your own unique twist,” he says.
“From our research, we see that colours and layers are still very popular. Think cloud coffees with coconut milk and foams, and layered matcha drinks. In terms of flavours, people are interested in health aligned ingredients such as matcha, so I think we’ll see more of ube, turmeric, and hibiscus which all have a striking signature colour like matcha does.”
For businesses unsure of how to step up their chilled beverage menu, Michael reassures it is easy to establish and doesn’t require large investment in equipment.
“You really only need a small amount of bar space and an ice machine. This isn’t like investing in a new grinder or coffee machine,” he says.
“The most important element is training your staff to recreate the drink consistently. I suggest creating a set of step-by-step instructions, or even a video they can watch. Creating delicious drinks that look the same will create customer loyalty and brand recognition when shared on social media.”
Those with limited time to create new drinks can benefit from Alchemy’s recipe kits, which include all the essentials needed to craft on-trend chilled drinks. As well as the core ingredients such as syrups and smoothie bases, the kits include detailed instructions and QR codes linking to step-by-step videos. The Flavoured Iced Matcha Kit, for example, comes with matcha, strawberry syrup, blueberry syrup, and white chocolate sauce. All the café needs to add is the milk or alternative plus ice and they instantly have three new drink options to rotate as limited-time offers.
“We’ve put in the work to make it simple for café owners to create the chilled drinks that will appeal to Gen Z. We’ve got some really exciting new signature drinks creations such as a Banana Bread Chai Smoothie and a Pistachio Iced Latte in the recipe kit format,” says Michael.
“Signature drinks can engage all the senses. Going forward, I believe they’re going to be the key to unlocking café profitability.”
For more information, visit alchemycordial.com.au/wholesale
This article appears in the October 2025 edition of BeanScene. Subscribe HERE.
