Coffee shop industry overview and trends

Coffee Shop Industry Overview

A coffee shop is an establishment which primarily serves prepared coffee or other hot beverages (Coffeehouse, Wikipedia). This source summarizes the history of coffee shops. In the United States, coffee shops first appeared in the Italian-American immigrant communities in large cities such as New York, Boston and San Francisco. However, coffee shops caught the attention of the youth culture in the 1960s, especially in Seattle and other parts of the Pacific Northwest. Then, the Starbucks chain standardized and mainstreamed coffee shops in the 1990s. Coffee shops now commonly serve as centers of social interaction, offering visitors a place to congregate, talk, write, read, entertain one another, or pass the time.

According to Hoover's Industry overview: Coffee shops, the U.S. coffee shop industry includes about 20,000 stores with combined annual revenue of about $11 billion. Major competitors include Starbucks, Caribou, Coffee Bean and Tea Leaf, and Diedrich (Gloria Jean's). The top 50 companies generate more than 70% of industry sales. Starbucks is the only national chain. There are various regional chains, franchises, licensed stores, and independent stores. While large companies have competitive advantages in purchasing, finance and marketing, small companies can still compete by offering specialized products for local markets and by providing better customer service.

Also, according to Hoover's, major coffee shop products include beverages as well as food. Beverages include brewed coffee and tea; espresso drinks (cappuccinos, cafe lattes); cold blended beverages; bottled water; soft drinks; and juices. Most coffee shops serve high-quality, premium coffee known as specialty coffee. Food includes pastries, bakery items, desserts, sandwiches, and candy. Many coffee shops sell whole or ground coffee beans and some coffee shops sell coffee or espresso-making equipment, grinders, mugs, and other accessories.

Dunkin' Donuts (https://www.dunkindonuts.com)

In 1950, Dunkin' Donuts' founder Bill Rosenberg opened the first shop in Quincy, Massachusetts. Dunkin' Donuts licensed the first of many franchises in 1955. Today, the company in headquartered in Canton, Massachusetts and claim to be the world's largest coffee and baked goods chain, serving more than 3 million customers per day. Dunkin' Donuts reveals that it sells 52 kinds of donuts, more than a dozen coffee beverages, bagels, breakfast sandwiches and other baked goods.

Will Kussell was appointed President & Chief Brand Officer of Dunkin' Donuts in 2008. He oversees all domestic and international operations, marketing, franchising and new store growth for the Dunkin' Donuts brand. He was promoted internally after serving as a Senior Vice President of Marketing and Purchasing for Dunkin' Donuts, President of Dunkin Donuts and Chief Operating Office for Dunkin' Brands. Kussell had previous retail management experience at Reebok International and Polaroid.

Dunkin' Donuts is a subsidiary of Dunkin' Brands, Inc. And this Web site (http://www.dunkinbrands.com/) contains information about mission and vision, "At Dunkin' Brands, Inc., we like to say that our "soul" purpose is to lead and build great brands." As such. It claims leadership in the "Quick Quality" segment of the food and beverage industry which the company defines as quick service along with best-in-class menu items.

Panera Bread (http://www.panerabread.com)

Founded by Louis Kane and Ron Shaich, Panera Bread began in 1981 as Au Bon Pain Co., Inc., a leader in the bakery-cafe category. In 1993, Au Bon Pain purchased Saint Louis Bread Company, a chain of 20 bakery-cafes located in the St. Louis area. Saint Louis Bread Company was later renamed Panera Bread as part of a "re-staging" effort. Then, in May1999, all of Au Bon Pain Co., Inc.'s business units were sold, with the exception of Panera Bread, and the company was renamed Panera Bread. Today, the company makes it clear that it is a baker of bread. Founder Ron Shaich has served at Panera's Chief Executive Officer for more than 25 years.

Panera currently has 1,264 bakery-cafes in 40 states and Canada, delivering what the company refers to as fresh, authentic artisan bread and cafe foods. The company's mission, "a loaf of bread in every arm" sounds more like a tagline. However, the company has succeeded in making its bread broadly available and claims that it freshly bakes more bread each day than any bakery-cafe concept in the country.

Caribou Coffee (http://www.cariboucoffee.com/)

Headquartered in Minneapolis, MN, Caribou Coffee was founded in 1992. It now has up to 500 company-owned locations in 16 states, the District of Columbia and several international locations. Like most coffee shops, it offers bakery items in addition to beverages, but its emphasis is squarely on its quality coffee.

The company spends most of its efforts developing the brand image of its coffee as being the very best and uses its mission, vision and core values to reinforce the brand image. Caribou Coffee states that, "Our mission at Caribou Coffee is to provide a total experience that makes the day better." Carribou Coffee describes the breathtaking panoramic view of Sables Mountain in Alaska as being both the inspiration for its founding as well as its entrepreneurial vision which states, "Excellence is a product of hard work, and that life is too short for anything else." The company has also established a set of core values that map well to its mission and vision: a) blaze new trails; b) be excellent, not average; c) enjoy what you do; d) respect diversity; e) teamwork builds diversity; f) success and profit create opportunities g) success and profit create opportunities; and h) make a difference in our community.

McDonald's (http://www.mcdonalds.com/)