Coffee Shops Industry Profile

Companies in this industry sell coffee drinks and other food and beverages for consumption on the premises or for takeout. Major companies include International Coffee & Tea (The Coffee Bean & Tea Leaf), Peet's Coffee, and Starbucks, (all based in the US), as well as Caffè Nero and Costa Coffee (both based in the UK).

The US coffee shop industry includes about 20,000 stores with combined annual revenue of about $10 billion. Moderate growth is forecast for the industry over the next two years, driven by consumer spending and preferences.

Coffee shops are part of the specialty eatery industry, which also includes outlets specializing in products such as bagels, donuts, frozen yogurt, and ice cream.

COMPETITIVE LANDSCAPE

Consumer taste and personal income drive demand. The profitability of individual companies depends on the ability to secure prime locations, drive store traffic, and deliver high-quality products. Large companies have advantages in purchasing, finance, and marketing. Small companies can compete effectively by offering specialized products, serving a local market, or providing superior customer service. The US industry is concentrated: the top 50 companies generate more than 70 percent of sales.

Coffee shops compete with businesses such as convenience stores, gas stations, quick service and fast food restaurants, gourmet food shops, and donut shops.

PRODUCTS, OPERATIONS & TECHNOLOGY

Beverages typically sold by coffee shops include brewed coffee and tea; espresso drinks (cappuccinos, café lattes); cold blended beverages; bottled water; soft ...