Coffee Shop Market
Research and Analysis
Food Masters International
Top 10 Coffee Shop Companies in
the United States
1. Starbucks
2. Caribou Coffee
3. Tim Horton’s
4. Coffee Bean & Tea Leaf
5. Coffee Beanery
6. Seattle’s Best
7. Peet’s Coffee
8. Tully’s
9. Dunn Bros. Coffee
10. Port City Java
U.S. Market Statistics &
Information
 Currently about 20,000 coffee shop businesses in the
U.S., combined revenues of $10 billion in 2011
 70% of sales derives from the primary top 50 coffee shop
operators such as Starbucks, Caribous, and Peet’s
Coffee; with small local family owned coffee shops in
competition
 Gross Margin for a coffee shop is about 85%, operating
income averaging 2.5% of net sales
U.S. Market Statistics &
Information
 Important to have friendly, high energy teams of
employees due to the required labor intensive nature of
coffee brewing; annual revenue per worker generates
about $50,000
 65% coffee consumption takes place during breakfast
hours
 Average number of cups of coffee (9 ounces) a coffee
drinker consumes daily is 3.1
 Average percentage of people who go to premium
places like Starbucks or Coffee bean when they go out is
34%
U.S. Market Statistics &
Information
 Total percentage of coffee consumed between meals is 30%
 60% people claim that they need coffee to start their day
 54% people claim that their morning coffee makes them feel
more like their self
 68% people consume their morning coffee within the first
hour of getting up in the morning
 Total amount of yearly money spent on specialty coffee in the
U.S. is 18 billion
Popular Products Consumed with
Coffee
 The favored pastry product with coffee depends on
region, and demographics
 Most popular include…
 Coffee Cake – northeastern region of United States
 Muffins – most popular type being blueberry with bran,
apple, and banana as second; people really enjoy the
texture and flavor with the hot coffee; considered dense,
sweet breads
 Donuts or Doughnuts – small ring shaped cakes, light, sweet
dough fried in oil; most popular types are plain, glazed,
jelly filled, French donuts and crullers
Popular Products Consumed with
Coffee, Continued…
 Shortbread – buttery, crumbly texture and is a natural foil
for coffee’s rich flavor; shortbread cookies are ideal for
dunking purposes as the bread absorbs the coffee without
breaking off
 Danish Pastry – coffee & Danish pastries are the most
common components of a regular Continental breakfast;
buttery and rich, yeast-raised egg dough base with fruit or
cheese filling, drizzled with sugar icing glaze
 Italian Pastry – vary widely from cannolis to rum cake, all
go well with all kinds of coffee
Popular Products Consumed with
Coffee, Continued…
 Chocolate Cake – (coffee is popular after dinner as well)
sweetness of chocolate pairs well with coffee; devil’s food
cake, fudge cake, or chocolate cream pie are some of the
most popular dessert choices around the country
 Biscotti – (originally the Italian word for cookies) made
with sweet dough cooked till it is dry and hard; perfect for
dunking due to texture and traditional rounded wedge
shape
Consumer Statistics &
Preferences of 2012
 Information provided by National Coffee Association,
National Coffee Drinking Study
 40% of 18-24 year olds drink coffee daily (up from 31% in
2010)
 Why? 29% People felt better about their financial situation…
 No other group shared the financial concern
 54% of adults age 25-39 drink coffee daily (up from 44%
in 2010)
 Overall, 46% of total surveyed coffee drinkers said that
they felt that their financial situation to be the same as
the past
Consumer Statistics &
Preferences of 2012
 Generally, over 75% of U.S. adults drink coffee, and
58% drink coffee daily
 Coffee drinkers still outnumber tea drinkers…183
million coffee drinkers to 173.5 million
 2012, combined sales of coffee and tea at restaurant and
beverage places is estimated to total $18.7 billion
 Strong increase in demand for specialty coffees (ex.
Cappuccinos, lattes, Americanos and Macchiatos having
highest popularity)
Consumer Statistics &
Preferences of 2012
 Most adult coffee drinkers believe their coffee
consumption habits initiated during their teenage
years
 54% said they began drinking coffee between 13 and 19 years old
 22% believe their coffee fondness began between the ages of 20
and 24
 Marketing to young age groups is important, but a focus on
older age groups would be more profitable as they are the
customers with the larger purchasing power
Consumer Statistics &
Preferences of 2012
 Coffee shop owners say that they usually find regular (weekly or
more) customers in the younger age groups, particularly high
school and college students, as well as newly employed and/or
first job
 Parents also very important demographic to market to,
especially ones with older children where they would have more
time to go out for coffee rather than stay at home with young
children
 The feelings associated with coffee are generally comforting and
warm, thus it is logical that a customer will be more inclined to
purchase a comforting food item such as pastry or baked goods.
Product Trends of 2012
 Of general hot beverage sales, coffee is the highest
(83.3%)
 U.S. coffee consumption is expected to increase through
2015, average annual rate of 2.7%, and tea consumption
to increase with average annual rate of 3.1%
 Most likely causes for positive expectations of growth are due
to increasing innovations in premium gourmet coffee products
(ex. Pods, single serving instants, etc.)
 Instant serving packs have increased in popularity, 2%
surveyed said they use them regularly as 10% say they
buy them infrequently
Product Trends of 2012
 General price of coffee has increase by about 25% since 2007,
largely due to the greater burden of commodity price
increases being passed onto the consumers, but this trends is
slowing
 According to Starbucks, their retail sales breaks down as
follows…
 Beverages 75%
 Food 19%
 Whole bean and soluble coffees 4%
 Coffee making equipment and other merchandise 2%
Product Trends of 2012
 Blondies are becoming a popular replacement of
the Brownie
 Blondie – generally are paler brownies
 Additions such as peanut butter, toffee, etc. help make this
item stand apart from the average brownie in addition to the
refreshing color of the baked good
 Breads with more whole grains, and have the
physical appearance of being less processed create
the image that the product holds more healthier
value than the average bread
 Appealing to the growing trend in health foods
Product Trends of 2012
 Greek Yogurt is becoming much more prefer over
the average yogurt due higher protein content, is
delicious served like a parfait
 Appealing to the growing trend in health foods
 Dark Chocolate over milk chocolate is perceived to
have greater health benefits, therefore can attract
the health conscious consumers
 Hot Food Options are always a popular item
customers purchase, especially during the winter
Product Trends of 2012
 Although declines in disposable income and
healthier eating trends due to the recession,
spending habits are on the rise and healthier eating
trends are dulling down. But the motivation to lose
weight is always an attractive sales point to any
consumer apart of any demographic
Sales & Marketing Strategies
 Most customers are looking for that special
something, that creates an edge over competitors,
as there are many competitors (thus the profitable
coffee at Starbucks, despite the high prices)
 Use of technology for marketing and customer
attraction help set apart coffee shops, and aid in
competing with large chain coffee shops; the goal
is to increase visibility in the local market
 FourSquare
 Yelp
 Google Places
Sales & Marketing Strategies
 Vital to have well trained baristas, thus investment in
staff training and online education services are smart
 Customer Loyalty programs that establish more
potential for the customer to benefit from their
provided business and in return continue buying from
that particular coffee shop
 Have a good variety of coffee-related products, and put
focus on co-marketing opportunities with surrounding
institutions such as colleges or other similar places in
the area
Sales & Marketing Strategies
 Main coffee shop competitors are convenience
stores, gas stations, quick service and fast food
chains, gourmet food shops, and donut shops
 Prime locations such as near corporate business,
schools, busy areas is vital to having a heavy traffic
of customers as convenience is many times one of
the highest priorities…
 That said, it is important to carry not only beverages, but a
variety of food items since many customers might be
buying for their lunch of snack they intent to consume later
in the day
Global Bakery & Pastry Industry
Statistics & Analysis
 Overall global baked goods industry is expected to
exceed $310 billion in 2015, according to Global
Industry Analysts
 Higher demand for baked and pastry goods is
perpetuated by changing lifestyles, where people
have less time to prepare their own meals and
bake
 Research shows that busy consumers are much more likely
to purchase convenient baked snack food such as pastries,
wraps, and sandwiches (they are more focused on their
hunger, therefore are more likely to be impulsive regarding
their food choices)
Global Bakery & Pastry Industry
Statistics & Analysis
 Factors related to industry growth include
convenience, affordability, and health benefits of
the baked products
 Baked goods industry primarily includes products
like bread, cereals, cakes, biscuits, pastries, and
scones; all of which are well established in
industrialized regions such as Western Europe and
North America
Age & Gender Research,
Breakfast Food Preferences
 By understanding your different markets that your products
need to appeal to, a business is much better equipped to
offer products that will meet consumer needs and in return
generate more revenue for the business at large
 Social Media is an increasingly popular trend among all
demographics, primarily with younger individuals; marketing
through social media is an essential tool to all businesses with
long-term goals and in order to effectively brand the products
 Customers are overall looking for convenience, great taste,
and value all in one stop
Individual Coffee Company
Profile
Starbucks, Caribou Coffee, Coffee Bean & Tea Leaf
Starbucks
 Social Media & Internet
Involvement: Twitter,
Facebook, YouTube, My
Starbucks Idea
 Total Net revenue at end of
fiscal 2012, had increased
by 14% to $13.3 billion
 16% of Revenue in Food was
about $2,092.8 million
Starbucks
 Considered 24th of the 50 most innovative
companies in the world
 They read their consumer preferences well and integrate them
into a long-term strategy for growth and profit
 They are able to introduce a lot of new and different products
quickly, keeping the customers interested and motivating them to
come back to try something different
 Ex. Seasonal flavors
 They have also increased their healthier options
 The App they have makes it fun for customers to use their
phone to pay, as well as making it easier for them to offer
free songs, games, and eBooks through a link to iTunes
Starbucks
 Total of 17,651 stores (as of July 1st, 2012), in 60
countries
 More than 30 blends and single-origin premium coffees
 Sells baked pastries, sandwiches, salads, oatmeal,
yogurt parfaits and fruit cups
 Brand Portfolio includes: Starbucks Coffee, Seattle’s
Best Coffee, Tazo Tea, Evolution Fresh, La Boulange and
Torrefazione Italia Coffee
 Branding & Responsibilities: Ethical Sourcing,
Environmental Stewardship, Community Involvement
Food Products
Majority of the products Starbucks and other coffee shops offers
are popular and the amount and varieties carried varies from
store to stores and market to market.
The Coffee Bean & Tea Leaf
 Owned and operated by International
Coffee & Tea, LLC
 Over 900 locations, 23 countries
 About 6,400 employees (since 2010)
 Revenue of about $23.1 million (est. in
2010)
 Kosher coffee
 It is the oldest and largest privately
held specialty coffee and tea retailer in
the United States
 Twitter, Pinterest, Facebook, YouTube
 Mostly located in California
Caribou Coffee
 2nd Largest specialty coffee
and espresso retailer in the
United States, after
Starbucks
 Almost 500 Company-Owned
Locations, as well as 126
franchise locations
 Located in 16 States, District
of Columbia, several
countries apart from the
U.S.
 $292 Million Revenue in 2009
 Moto: “Life is short. Stay
awake for it.”
 Partners with Kemp, Keurig,
Rainforest Alliance
 6,000+ Employees