Coffee Shops & Snack Bars
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 56,000 coffee shops and snack bars in the US sell non-alcoholic beverages, snacks, and related items for consumption on or near premises. Companies may specialize in bagels, beverages, confectionaries, cookies, donuts, frozen custard, ice cream, yogurt or pretzels. They may prepare food and beverages on site or resell goods purchased from third-parties. Formats include national and regional chains, franchises or licensed shops, and independent operators.
Sensitivity to Food Trends
The food and beverage industry is subject to fads and trends that affect demand.
Competition from Alternative Sources
Coffee shops and snack bars compete with various alternative sources, including fast food restaurants, grocery and convenience stores.
Industry size & Structure
The average coffee shop or snack bar operates out of a single location, employs fewer than 20 workers, and generates about $1 million annually.
- The coffee shop and snack bar industry comprises about 56,000 companies that operate nearly 73,000 locations, employ about 813,500 workers and generate about $64 billion annually.
- The industry is concentrated at the top and fragmented at the bottom. The top four firms account for 31% of industry sales; the top 50 firms account for 37% of sales.
- Large companies include Starbucks, Dunkin' Brands (Dunkin' Donuts, Baskin Robbins), Restaurant Brands International’s Tim Hortons, and Krispy Kreme Doughnuts. Some large chains have significant international operations.
Industry Forecast
Coffee Shops & Snack Bars Industry Growth
Recent Developments
Mar 14, 2025 - Disappearing Nondairy Milk Fees
- As oak, almond, and soy milks surge in popularity, coffee shops are eliminating nondairy milk surcharges. In March, Dunkin’ became the latest chain to stop charging for alternative milks, following Starbucks, which removed its fee in November, Axios reports. Smaller, independent chains have also followed suit. While eliminating the fees is popular with customers, a gallon of oat milk can be twice the cost of a gallon of cow’s milk, a cost coffee shops must absorb. Fortunately, the cost of milk is small in comparison to other inputs, notably coffee beans and labor. “The cost of milk to make coffee is so small,” says Miguel Gomez, a professor of food marketing at Cornell, adding “I think the companies will absorb this cost, and they are not going to increase prices.” As more coffee shops eliminate surcharges others will follow or risk losing customers to competitors.
- Driving on-premise traffic will be a higher priority for restaurant operators than capturing off-premise visits this year, according to the National Restaurant Association’s State of the Industry Report 2025. During the pandemic and its aftermath, restaurants, by necessity, focused on their take-out and delivery services. Now, according to the report, 81% of consumers say they would eat at full-service restaurants more frequently if they had more money to spend. Across segments, restaurants are prioritizing on-premise service with 60% of quick-service restaurant (QSR) operators saying on-premise visits would be more important in 2025 than off-premise, while 90% of fine dining operators said the same, per NRA’s report. Notably, Starbucks is focusing its effort on improving the dine-in experience and making its cafes more appealing places to linger. QSR customers identified store cleanliness as one of the most important factors determining their visit, per the NRA survey.
- For the first time in its history, the price of coffee futures on the commodities market topped $4 per pound in February, according to Business Insider. Year-to-date, coffee futures prices are up almost 35% and have more than doubled from the same time last year. Climate change, dwindling global stockpiles, and President Trump’s threat to impose a 25% tariff on all goods from Colombia, including coffee, are driving up coffee prices. Although the tariff threat to Columbia was ultimately removed, Trump’s threats of sweeping tariffs and the possibility of a resultant trade war have added instability to commodity markets, including the coffee market. Volatile prices for coffee beans can affect coffee shops’ gross margins and shops must regularly monitor their cost of goods sold and adjust prices to maintain or improve their margins. But that can be hard to do amid growing competition among coffee shops.
- Sustainability and ethical sourcing are among the trends coming to coffee shops in 2025, according to franchiser Scooter’s Coffee. Promoting the ethical sourcing of coffee beans and environmentally-friendly practices will help brands build customer loyalty and sales. Paradoxically, the growing interest in at-home brewing is an opportunity for shops offering at-home brewing products to capitalize on the trend. Offering ready-to-drink options, like cold brews or bottled coffees in addition to fresh-brewed drinks will attract time-pressed customers, while plant-based alternatives, including soy, oat, and almond milks, will draw customers with allergies and dietary concerns. Mobile ordering platforms are a must for attracting younger customers, says Scooter’s. Sales for the US coffee shops and snack bars industry are forecast to grow at a 5.6% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to the Interindustry Economic Research Fund.
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