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Coffeehouses and Donut Shops - US

Published by: Mintel International Group Ltd.

Published: May. 1, 2009 - 82 Pages


Table of Contents


SCOPE AND THEMES

What you need to know

Definition

Data sources

Consumer survey data

Abbreviations and terms

Abbreviations

Terms

EXECUTIVE SUMMARY

The challenge of a recession

Starbucks drags down overall sales, but broader picture not bright either

Value pricing will dictate the near future

Competition growing for the coffee and snack or meal

18-34 year olds are an essential demographic

Social Networking (SN): A free brand propulsion tool

Innovation driven by value and variety

Advertising and promotional activity

Coffee and coffee drinks usage

Coffeehouse and donut shop usage

Coffee and coffee drink spending trends and rationales

Coffeehouse and donut shop drinks drunk most often

How coffeehouses are used

What coffeehouse patrons would like to see more of

COMPETITIVE CONTEXT

Key points

Consumers walk out on coffeehouses

Takeaway

The bottom line

Figure 1: Coffeehouse and donut shop coffee-spending rationales, February 2009

Figure 2: Coffeehouse and donut shop coffee-spending trends, February 2009

The economic challenge

Value-driven solutions

QSR specter looms large; McDonald’s McCafé a game changer

No one wants to deal with an 800-pound gorilla

Broader value proposition

Breakfast pressure

Extended hours

Variety

Fast casual restaurants compete on healthfulness and brand cachet

For healthier options…

For sampling…

Work and office: A blending of the “second” and “third” spaces

Takeaway

Workers rely more on office coffee service

MARKET SIZE AND FORECAST

Key points

An unfortunate truth: negative sales estimated for 2009

Starbucks drags down overall sales

But broader picture not bright either

Value pricing will dictate the near future

Figure 3: U.S. systemwide sales of coffeehouses and donut shops, 2006 and 2008

Figure 4: U.S. systemwide sales of top coffeehouses and donut shops, at current prices, 2005-11

Coffeehouses and Donut Shops

Figure 5: U.S. systemwide sales of top coffeehouses and donut shops, at inflation-adjusted prices, 2005-11

SEGMENT PERFORMANCE

Key points

Coffeehouses

Figure 6: U.S. retail coffeehouse sales at top three chains, 2006 and 2008

Figure 7: U.S. retail coffeehouse units at top three chains, 2006 and 2008

Figure 8: U.S. retail coffeehouse sales per unit, top three chains, 2006 and 2008

Donut shops

Figure 9: U.S. retail donut shop sales at top three chains, 2006 and 2008

Figure 10: U.S. retail donut shop units at top three chains, 2006 and 2008

Figure 11: U.S. retail donut shop sales per unit, top three chains, 2006 and 2008

MARKET DRIVERS

Key points

RECESSION HITS RESTAURANT INDUSTRY

Figure 12: Restaurant Performance Index, current situation, and expectations, November 2007-February 2009

Figure 13: Coffeehouse and donut shop coffee-spending trends, February 2009

Consumer confidence undermines willingness to spend at restaurants

Figure 14: Consumer sentiment index, 2001-08

Is that light at the end of the tunnel?

18-34 year olds: A force to be reckoned with

Figure 15: Population aged 18 or older, 2004-14

RESTAURANT ANALYSIS

Key points

Starbucks navigates a (very) rough patch

Current struggles

Plan for the future

Breathing life into the brand

What’s on the menu

Core demographic profile remains steady

Figure 16: Starbucks demographic profile, 2007 and 2008

Dunkin’ Donuts

Store format innovation

Going retro

What’s on the menu

The demographic connection

Figure 17: Dunkin’ Donuts demographic profile, 2007 and 2008

Tim Hortons

The basics

Growth through expansion

On the menu

Tully’s

ANALYSIS: THE INDEPENDENT COFFEEHOUSE

Intelligentsia continues to ride the “Third Wave”

Bridgeport Coffee Company: A true neighborhood independent

RESTAURANT BRAND QUALITIES

Key points

Social networking as a brand propulsion tool

Figure 18: Viral marketing on social networking sites, October 2008

Dunkin’ Donuts

Starbucks

INNOVATION AND INNOVATORS

Key points

Spinning value

Rewarding the regulars

Cross-pollinating beverages

Starbucks works to shed its “evil of excess” image

Healthy menu choices arrive

ADVERTISING AND PROMOTION

Key points

Everybody loves to pick on Starbucks

PJs: Starbucks isn’t local

Figure 19: PJs local positioning, 2009

Figure 20: PJs: roasted locally, 2009

Dunkin’ Donuts: Highlighting bargains

Figure 21: Dunkin’ Donuts value breakfast, 2009

Figure 22: Dunkin’ Donuts: Dunkin’ Deals, 2009

Figure 23: Dunkin’ Donuts LTO, 2009

Starbucks: “Do-gooders”

Figure 24: Starbucks: “What if?,” 2008

Figure 25: Starbucks: “What if?” Africa, 2009

Figure 26: Starbucks, volunteering, 2009

COFFEE AND COFFEE DRINKS USAGE

Key points

Bring more than coffee to the table to target 18-34 year olds

Figure 27: Coffee and coffee drink usage, by selected demographics, February 2009

COFFEEHOUSE AND DONUT SHOP USAGE

Key points

Purchased drinks

Figure 28: Purchased drinks at coffeehouses and donut shops in past month, by age, February 2009

Figure 29: Mean purchases of drinks at coffeehouses and donut shops in past month, by age, February 2009

Figure 30: Purchased drinks at coffeehouses and donut shops in past month, by household income, February

2009

Figure 31: Mean purchase of drinks at coffeehouses and donut shops in past month, by household income,

February 2009

Purchased food

Figure 32: Purchased food at coffeehouses and donut shops in past month, by age, February 2009

Figure 33: Mean purchase of food at coffeehouses and donut shops in past month, by age, February 2009

Figure 34: Purchased food at coffeehouses and donut shops in past month, by household income, February

2008

Figure 35: Mean purchases of food at coffeehouses and donut shops in past month, by household income,

February 2008

COFFEE & COFFEE DRINK SPENDING TRENDS AND RATIONALES

Key points

Spending trends point downward

Figure 36: Coffeehouse and donut shop coffee-spending trends, February 2009

Figure 37: Coffeehouse and donut shop coffee-spending trends, by age, February 2009

Figure 38: Coffeehouse and donut shop coffee-spending trends, by household income, February 2009

Spending rationales show lure of home

Figure 39: Coffeehouse and donut shop coffee-spending rationales, February 2009

Figure 40: Coffeehouse and donut shop coffee-spending rationales, by age, February 2009

Figure 41: Coffeehouse and donut shop coffee-spending rationales, by region, February 2009

COFFEEHOUSE AND DONUT SHOP DRINKS DRUNK MOST OFTEN

Key points

Coffeehouses and Donut Shops

Hot coffee the most popular drink

Figure 42: Coffeehouse and donut shop drinks drunk most often, February 2009

Figure 43: Coffeehouse and donut shop drinks drunk most often, by age, February 2009

Figure 44: Coffeehouse and donut shop drinks drunk most often, by region, February 2009

HOW COFFEEHOUSES ARE USED

Key points

“Grab and go” remains the leading choice

Figure 45: How coffeehouses are used, April 2008 and February 2009

Figure 46: How coffeehouses are used, by age, February 2009

Figure 47: How coffeehouses are used, by HH income, February 2009

Figure 48: How coffeehouses are used, by region, February 2009

WHAT COFFEEHOUSE PATRONS WOULD LIKE TO SEE MORE OF

Key points

Food enhancements and coffee variety top the most wanted list

Figure 49: What coffeehouse patrons would like to see more of, February 2009

Figure 50: What coffeehouse patrons would like to see more of, by gender, February 2009

Figure 51: What coffeehouse patrons would like to see more of, by age, February 2009

Figure 52: What coffeehouse patrons would like to see more of, by region, February 2009

APPENDIX: TRADE ASSOCIATIONS

Abstract

18-24 year olds hold keys to coffeehouse culture; cost incentives are needed to keep them engaged.

Leverage social networking sites as free ways to connect with patrons and to make them a part of the brand community.

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