1. Coffee Shop Market Research and Analysis
Food Masters International

2. Top 10 Coffee Shop Companies in the United States
Starbucks
Caribou Coffee
Tim Horton’s
Coffee Bean & Tea Leaf
Coffee Beanery
Seattle’s Best
Peet’s Coffee
Tully’s
Dunn Bros. Coffee
Port City Java

3. 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

4. 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%

5. 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

6. 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

7. 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

8. 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

9. Consumer Statistics & Preferences of 2012
Information provided by National Coffee Association, National Coffee Drinking Study
40% of 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 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

10. 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 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)

11. 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

12. 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.

13. 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

14. 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%

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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)

22. 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

23. 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

24. Individual Coffee Company Profile
Starbucks, Caribou Coffee, Coffee Bean & Tea Leaf

25. 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

26. 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

27. 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

28. 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.

35. 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

36. 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