Coffee Shops & Snack Bars NAICS 722515

May 14, 2026 - Rising At-Home Consumption

• Coffee shops face mounting challenges as consumer habits shift from away-from-home consumption, according to new data from the National Coffee Association. High retail prices are pushing customers to brew at home, with 85% of coffee drinkers now doing so, the highest rate since 2012 and up 5% since January 2020. The rise of remote and hybrid work arrangements has further reduced foot traffic at coffee shops, as fewer people commute past cafes daily. Compounding these pressures, improvements in home coffee technology now allow consumers to produce near cafe-quality beverages without leaving the house, making the premium price of away-from-home coffee harder to justify. Together, these forces - rising prices, changing work patterns, and better home machines - are driving a sustained decline in out-of-home coffee consumption, posing serious long-term challenges for coffee shops competing for a shrinking pool of customers willing to pay for the cafe experience.
• Tariffs, crop failures, higher rents, and rising labor costs are driving up the cost of doing business for coffee shops, The Wall Street Journal reports. Cafes are facing sustained cost inflation and margin pressure as coffee prices continue to rise, with little relief expected in the near term. Key drivers include higher green coffee costs from crop failures, tariffs on imports, rising labor and rent expenses, and increased freight costs linked to the Middle East conflict, according to WSJ. Moreover, commodity price volatility, fueled by speculative trading and supply uncertainty, is making costs unpredictable. Smaller coffee shops are especially vulnerable because they lack the scale and purchasing power to hedge prices or secure long-term contracts. For operators, this creates a difficult choice between raising menu prices and risk losing customers or absorbing costs and straining cash flow and profitability.

• Dutch Bros’ success shows how shifting beverage preferences, especially among Gen Z, are reshaping competitive pressures and strategic priorities for coffee shops, The Wall Street Journal reports. The third‑largest US coffee brand focuses not on hot coffee but on customizable cold energy drinks, which make up about 90% of its beverage mix and 25% of sales, according to WSJ. Its success reflects a major demand shift toward cold, customizable, social‑media‑friendly drinks, with younger consumers preferring iced, flavored, and energy‑based beverages over traditional hot coffee. Dutch Bros is adding bakery items and hot breakfast sliders to encourage morning visits. Convenience and loyalty matter to consumers who expect order‑ahead, predictable drive‑thru experiences and loyalty‑based perks. Coffee shops that lean into cold beverages, customization, convenience, and youth‑oriented branding will be better positioned as the market shifts away from traditional hot coffee.
• Rising consumer spending is fueling restaurant sales growth, with sales for food services and drinking places rising 4.9% in January compared to a year ago but easing 5.1% versus the holiday month of December, according to the latest data from the Census Bureau. Employment by snack and nonalcoholic beverage bars grew 4.7% in February compared to a year ago, while the average industry wage at restaurants and other eating places increased by 4.2% over the same period to a new high of $19.68 per hour, according to the latest US Bureau of Labor Statistics data. Employment growth and wage inflation, fueled by rising minimum wages in 19 states that began in January, are driving up industry payrolls.