Foodservice Equipment & Supplies

AUG 2018

Foodservice Equipment & Supplies magazines is an industry resource connecting foodservice operators, equipment and supplies manufacturers and dealers, and facility design consultants.

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74 • FOODSERVICE EQUIPMENT & SUPPLIES • AUGUST 2018 By Lisa White S tarbucks continues to soar up the sales charts with reported net sales growth of $1.2 billion and net unit growth of 758 units in 2017. It took a little time since Starbucks first entered the coffee market in 1971, but few would now disagree that the Seattle-based behemoth has forever changed the landscape of the coffee cafe market. Starbucks' dominance, however, does not mean there isn't room for other players to percolate in the coffee segment. "Starbucks is still the category killer; otherwise the most success we're seeing is with the independents," says Darren Tristano, CEO of Chicago-based market research firm CHD-Expert Americas. "In terms of the overall market, the coffee category continues to grow and expand, and it's one of the few quick- service categories that continues to find market share." As of September 2017, there are more than 36,950 coffee shops and teahouses in the United States, according to CHD Expert's foodservice database. The coffee and tea menu type accounts for 5 percent of the total U.S. restaurant landscape. Consumers spend more than $25 billion at coffee houses and tea shops each year according to CHD Expert data. The average coffee and tea restaurant brings in revenue of more than $680,000 each year and these beverage operators spend approximately $6 billion on purchasing food, beverages and other disposable products. The data also shows that 40 percent of coffee and tea restaurants are independent while the other 60 percent are chain operators. Within the chain landscape, 89 percent of coffee and tea chain restaurants have 501 units in operation. The most prevalent coffee and tea chain restaurants in terms of number of units in the U.S. include Starbucks, Dunkin' Donuts, Tim Hortons, Caribou Coffee, and The Coffee Bean & Tea Leaf, according to CHD Expert. Star- bucks has a year-over-year growth of 5.2 percent while Dunkin' Donuts has a year-over-year growth of 4.7 percent. Market Snapshot A number of trends continue to make waves in specialty coffee shops. "Nitro and cold brew are big, and more coffee cafes are offering these in liquid form versus brewing it," says Tristano. "Starbucks also is upscaling their roasting concept to better compete with higher-end hipster concepts. In taking the next step to polish up its brand, the chain is raising its price point for those willing to spend $10 or more for a cup of coffee; aficionados will pay for it." "The quality of home brews is allowing consumers to make high-quality coffee at home and not go out for it as often," says Tristano. "This will be in the shadows and put pressure on coffee cafes." Despite strong competition, the coffee cafe segment continues to expand its market share. JAVA GROWTH CONTINUES Photo by Laura Rockett

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