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
Recent Developments
Jan 14, 2025 - Rising Payrolls and Visits
- Employment by coffee shops and snack bars grew 1.7% in October compared to a year ago, while average industry wages increased 5.2% over the same period to a new high of $17.82 per hour, according to the latest US Bureau of Labor Statistics data. Rising payrolls at coffee shops and snack bars are being supported by loyal customers who consider coffee drinks an affordable luxury and increased their visits to coffee shops last year. Sales for food services and drinking places rose 2.3% year over year in July and consumer spending was up 2.9% YoY in August, according to the Bureau of Economic Analysis.
- 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.
- Krispy Kreme is the latest restaurant operator to be hit with a cyberattack, Nation’s Restaurant News (NRN) reports. The donut chain said it was notified of “unauthorized activity” within its IT systems on November 29 and has since been experiencing “certain operational disruptions,” particularly with its online ordering system. In a filing with the Securities and Exchange Commission, it said the attack will likely have an impact on the company’s operations and that the “expected losses” from the incident, as well as the financial cost of the investigation into the attack, will directly impact the company’s financial condition. NRN noted the attack was the third in the foodservice industry this year. Earlier in November Starbuck’s suffered a third-party ransomware attack on its back-end processes and in March Panera Bread experienced a data breach that led to the leak of personal information of many employees, including social security numbers.
- Away-from-home coffee consumption has returned to pre-pandemic levels, rebounding to its highest level since January 2020, according to a recent consumer poll from the National Coffee Association. The NCA poll found that US consumers feel coffee offers physical and psychological benefits, including that coffee is good for their health (51%), improves their mental focus (55%), and improves physical endurance (46%). Pandemic-era interest in the craft of coffee has also endured, with specialty coffee maintaining its 13-year high, with 45% of Americans saying they’ve had a specialty brew within the past day. The poll’s findings bode well for coffee shops challenged by rising input prices, including coffee beans and labor, and competition from heavyweights Starbucks and Dunkin. According to a recent report from data insights platform Tracksuit, 55% of coffee buyers bought their morning or afternoon fix from Starbucks compared to 42% who opted for Dunkin’.
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