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 over 73,000 locations, employ about 931,000 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
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Jun 14, 2024 - Employment Shrinks in April
                              • Sales for food services and drinking places, which include coffee shops and snack bars, rose 6.2% in April compared to a year ago and were up almost 10% versus March, according to the latest data from the Census Bureau. Rising consumer spending – up 3.1% in March year over year – is helping to support growth in away-from-home food and beverage sales. Employment by coffee shops and snack bars shrank 2.4% in April compared to a year ago, while average wages extended their steady climb, rising 6.5% over the same period to $17.58 per hour, a new high for the industry, according to the latest data from the US Bureau of Labor Statistics.
                              • Cold is on the menu this summer at coffee shops, QSR reports. Frozen treats, iced coffees, and cold brews have eclipsed traditional hot drinks to become the fastest-growing product category, with menus evolving to attract younger consumers at different times of the day. “The afternoon pick-me-up is becoming cold, the weekend treat is becoming cold, and even the morning routine coffee is being consumed cold,” says Sanjiv Razdan of The Coffee Bean & Tea Leaf, widely credited with sparking the frozen coffee craze. Razdan says younger consumers are driving the shift toward cold and frozen offerings that boast a broader range of flavors and toppings and have a strong visual appeal that is perfect for sharing on social media. New Orleans-based PJ’s Coffee combines trending flavors like rose and lavender with more familiar flavors like strawberry and white chocolate to spark consumer interest. Indulgent and eye-catching drinks are a key traffic driver, according to QSR.
                              • Global prices for coffee are surging as severe weather hampers production in key growing regions, The Wall Street Journal reports. Heat waves, heavy rainfalls, and droughts are increasing in frequency, damaging harvests and crippling supplies amid growing demand from consumers worldwide, according to WSJ. “Adverse weather conditions, mostly in the Southern Hemisphere, have played an important role in sending several food commodities sharply higher,” Ole Hansen, head of commodity strategy at Saxo Bank, told WSJ. The global coffee benchmark prices, London Robusta futures, were up 56% in April compared to a year ago, according to data from FactSet. Soaring coffee bean prices and rising costs for other inputs like labor and transportation are pinching coffee manufacturers' margins. Climate change is central to the rising price of coffee and other commodities and threatens to send them even higher, per WSJ.
                              • With outlet growth in its home country stalled, Canadian coffeehouse chain Tim Hortons is pushing deeper into the US with plans for 1,000 stores south of the US-Canada border by 2028, Weekly Coffee Dose reports. That’s up from 631 outlets across 11 US states – mostly in New York, Ohio, and Michigan – and 5,833 Tim Hortons stores worldwide as of the end of 2023, including 3,894 in Canada. The coffee chain’s parent company, Restaurant Brands International, revealed on an investors’ call that it also has ambitious expansion plans in China, where it currently operates more than 900 stores. Named after a Canadian hockey player, Tim Hortons (or “Timmies” to its Canadian fans) is Canada’s largest quick-service restaurant chain. It competes with Starbucks and Dunkin’, among many other smaller US operators.
                              Get A Demo

                              Vertical IQ’s Industry Intelligence Platform

                              See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                              Build valuable, lasting relationships by having smarter conversations -
                              check out Vertical IQ today.

                              Request A Demo