Nestle certainly does. They are set to pay $7 billion to add Starbucks’ products to its portfolio. And this is at a time when Starbucks growth rate has been on a decline since 2015. But that decline may have more to do with Starbucks than the industry overall.
There’s still a whole lot of coffee drinkin’ goin’on.
In the US, the NCA (National Coffee Association obviously) estimates that 64% of the population drink coffee every day. This is up from about 50% at the start of the millennium and is now back to the previous peak of 2012. That rate may well be peaking around these levels, but within this, the percentage who consume espresso based coffees has gone from 4% in 2003 to 24% today. Starts to explain a lot…….
Afternoon drinking is a problem. Apparently we are not doing enough of it! Starbucks has mentioned it at practically every quarterly conference call over the past two years. Some coffee experts feel that the baristas are more focused on cleaning up and restocking than enhancing the customer experience in the afternoons.
Starbucks are also facing a bit more competition now. Though I suspect that statement has been true for a number of years. The advent of McDonalds and McCafe is changing that competitive landscape. And not all coffee drinkers are the same! A recent research report from Bernstein outlines the key differences (psychographic distinctions they call them) between those who take their caffeine at Starbucks and those who head for the Golden Arches.. The survey results suggest that compared to the coffee drinkers at McDonalds, the Starbucks folks are somewhat younger, with higher income, watch less television, are more tech savvy, more environmentally conscious and tend to eat out more. If there was a box for “can linger 4-6 hours with a MacBook Pro and half a cold latte”, Starbucks would have won that too I suspect.
Any business built on passion and enthusiasm as Starbucks is, is to be regarded but on the ground in the US today, in terms of same store sales, McCafe is making headway.. Starbucks are taking action on this (closing some underperforming stores), but a snippet in the Sunday Times this morning also points to potential elsewhere. Starbucks plan to open a new outlet in China every 15 hours and have more than 5000 up and running by 2021. That’s a lot of coffee.
Now a really interesting survey would be the psychographic distinctions between Lyons Tea drinkers and Barrys!
Tradewinds 