Seasonality is a series of recurring patterns of demand for a product. It is usually measured in terms of quantity of interests’ time intervals, such a week, days, and months. The seasonal demand patterns change according to seasonal factors (Cho & Lee, 2013) . Coffee drinking is an important part of the American lifestyle. It has resulted in the rise of many cafes and micro-roasters that leads to success in the coffee sector. Like any other food and beverage, the coffee business can also be affected price fluctuations in the market. Some factors, such as seasonality, holidays, and weather conditions, greatly affect coffee and sales consumption.
The seasonal coffee factors, such as changes in the weather conditions, have a vital role in the production of coffee, and affect coffee prices. The consumption of coffee reduces during the summer seasons and picking back in the autumn and winter seasons. There are hot temperatures in the summer seasons when most people drink a lot of water instead of coffee. This shift decreases the demand for coffee due to less consumption. In the winter and autumn, the demand of coffee rises. The cold weather conditions force people to drink coffee to heat their bodies, protect their bodies from UV damages, and giving their skin a rich glow. As a result of this, the demand of coffee increase during these seasons. Therefore, it is evident that a shift in seasons affects the demand for coffee. It is very important always to have market data relevant for an individual to run that business.
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The unforeseen seasonal changes in the coffee sector may lead to an overstock in a company. Although coffee is a perishable product, there are various techniques that a company can use to dispose of the excess coffee products in case they have a surplus. First, the company can liquidate excess coffee products. The company can agree to sell the products to the liquidator at a negotiable price. Secondly, the company can sell the excess coffee products at a discounted price to its consumers. This discounted price will attract many end-consumers, distributors, and businesses, reducing the company excess products. Also, the company can conduct a give way a campaign. It can excite its customers by giving them the discounted coffee product from its excess inventory trash. This discounting will help it put the product in the customers' hands and make some money. The company can also give out the products as promotions as a way of rewarding their customers. The company should have accurate forecasting regarding seasonal changes in coffee production to avoid excess inventory.
Constrained forecasting is the act of speculating the delivery volume or sales realistic related to the business capacity of supply and its operational abilities. Demand forecasting is important in enabling a company to decide and plan its supply chain (Adhikari et al., 2017) . A coffee product is affected by two main production constraints: production and supply constraints. On production constraints, the institutional and biological factors affect coffee production greatly. The presence of insects, diseases, poor market information, and a low-quality coffee variety are among the main constraints of coffee production. The presence of humid conditions allows pest and disease proliferation, which lowers coffee yields (ClimateCare, n.d.) . Also, the change in rainfall can affect coffee production: the presence of much rainfall interferes with harvesting, and on the other hand, little rainfall leads to substandard coffee fruits—additionally, low soil nutrients and low pricing also major constraints on coffee production. On supply constraints, these are the limitation that affects the suppliers' ability to market their products or stock. The unpredictable world market prices shift coffee prices. The commodity and specialty grade producers are affected by regular price fluctuations in the coffee market. These price changes make the coffee producers lack the capacity to predict the coffee prices trend in the market.
References
Adhikari, N. C., Damakonda, N., Chandan, C., Gupta, G., Garg, R., Teja, S., . . . Misra, A. (2017). An Intelligent Approach to Demand Forecasting. Proceedings at the 2nd International Conference on Invention on Inventive Computation Technologies (ICICT 2017). Coimbatore: Enterprise Information Management.
Cho, D. W., & Lee, Y. H. (2013). Seasonal supply chain and the bullwhip effect. The International Journal of Industrial Engineering: Theory, Applications, and Practice, 20 (1), 188-210.
ClimateCare. (n.d.). The effect of climate change on coffee production . Retrieved from ClimateCare: https://climatecare.org/the-effect-of-climate-change-on-coffee-production/
