Table of Contents COFFEE MARKET OVERVIEW ​4 Coffee: World Markets and Trade ​4 Brazil Dominates the Exports ​5 Brazil dominates global production ​6 USA Coffee Consumption ​7 How many cups of coffee are consumed daily in the US? ​7 What percentage of people drink coffee? ​7 How much coffee does the average person drink? ​8 Miscellaneous ​8 Market Scope ​8 Key Players ​9 Segmentation Analysis ​9 Industry Innovation ​9 Regional Analysis ​9 U.S. COFFEE MARKET – STATISTICS & FACTS ​10 Market Overview ​11 US Coffee Market Grew to US$87-88 Billion in 2018 ​11 US coffee shop market grows to $45.4bn in 2018 ​12 Premium demand drives innovation ​12 Americans Are Drinking More Coffee Than Ever ​13 How Many People Drink Coffee? ​13 So, How Many People Do Drink Coffee in the U.S? So, How Many People Do Drink Coffee in the U.S? ​14 The Most Amazing Coffee Statistics ​15 US Coffee Consumption Statistics ​15 Coffee Drinker Demographics ​16 Consumer Behaviour ​16 The Coffee Market ​17 Coffee Shops ​18 COFFEE SHOP INDUSTRY – A STRATEGIC ANALYSIS ​19 Outlook for Coffee in US ​20 How is the Industry Trending in the US? ​21 Market Share in the US ​21 Industry SWOT Analysis ​22 Coffee & Snack Shops in the US Market Size 2010– 2020 ​23 Questions Clients Ask About This Industry ​23 Coffee & Snack Shops Number of Businesses 2010– 2020 ​24 Questions Clients Ask About This Industry ​25 Coffee & Snack Shops Employment Statistics 2010 – 2020 ​25 Coffee & Snack Shops Wage Statistics 2010 – 2020 ​26 Questions Clients Ask About This Industry ​26 Competitive Landscape ​27 Customer Overview ​27 U.S. coffee shops: market share ​28 Competitive Forces that impact competition (Porter Model) ​28 Competition within the Coffee Shop Industry ​28 Substitute Products ​29 Barriers to Entry ​29 Power of Suppliers ​29 Power of Customers ​30 Driving Factors that are causing the industry’s structure to change ​30 Key factors that determine success in the future ​31 Coffee Shop Target Market ​32 Coffee Shop Target Market: Coffee Shop Lovers ​33 Coffee Shop Target Market: Specialty Coffee Lovers ​34 Coffee Shop Target Market: Whole Bean Lovers ​34 Key Market Trends ​35 Green Coffee as a Weight Loss Beverage ​35 Increasing Usage of Single Serve Coffee in Households ​35 Growth ​35 Cold Brew ​36 Nitro Coffee ​36 Organic Coffee ​36 Trendy new coffee flavours ​36 Ready-to-drink coffee ​37 Technology to make your business more efficient ​37 Infographic: The Behaviors & Perceptions of US Coffee Drinkers ​38 The Average Profits for a Small Café ​41 COFFEE STORE FRANCHISES INDUSTRY IN USA ​42 Coffee Store Franchises in the US industry statistics ​43 Biggest companies in the Coffee Store Franchises industry in the US ​43 Coffee Store Franchises in the US Market Size 2010 – 2020 ​43 Coffee Store Franchises Businesses 2010 – 2020 ​45 Questions Clients Ask About This Industry ​45 Coffee Store Franchises Employment Statistics ​46 Coffee Store Franchises Wage Statistics 2010 –2020 ​47 Questions Clients Ask About This Industry ​47 COFFEE BEANS MARKET ​48 Key Findings of the Coffee Beans Market: ​50 Product Insights ​51 Application Insights ​51 Regional Insights ​52 Coffee Beans Market Share Insights ​52 BEST COFFEE CITIES IN AMERICA ​53 Infographics: Best Coffee Cities in America ​54 Coffee Shops Nationwide ​56 Ranking of USA states based of Coffee Shops ​60 These Cities Have the Most Coffee Shops Per Person ​65

COFFEE MARKET OVERVIEW

Coffee is the most popular beverage in the world, with more than 400 billion cups consumed each year. More than 450 million cups of coffee are consumed in the United States every day. • About half of the people in the United States over the age of 18 (that's 107 million) drink coffee every day. On average, each coffee drinker consumes three and a half cups each day. • As early as the ninth century, people in the Ethiopian highlands were making a stout drink from ground coffee beans boiled in water. • Coffee is grown in more than 50 countries in South America, Central America, Asia, Africa, and the Caribbean. • In 1971, a group of Seattle-based entrepreneurs opened a coffee shop called Starbucks. Today there are more than 6,000 Starbucks outlets in the United States. The chain also operates stores in 36 other countries. • Nearly 25 million farmers worldwide depend on coffee crops for their economic livelihood. • Coffee contains caffeine, the stimulant that gives you that "lift." Caffeine is the most popular drug in the world, and 90 percent of people in the United States consume it in some form every day. • Despite what you may believe, dark-roast coffee has less caffeine than coffee that's been lightly roasted. • Scandinavia boasts the highest per-capita coffee consumption in the world. On average, people in Finland drink more than four cups of coffee a day. • After oil, coffee is the world's second-most-valuable commodity exported by developing countries. The global coffee industry earns an estimated $60 billion annually.

Coffee: World Markets and Trade

World coffee production for 2019/20 is forecast 5.3 million bags (60 kilograms) lower than the previous year to 169.3 million, primarily due to Brazil’s Arabica trees entering the off-year of the biennial production cycle. World exports are expected down 4.7 million bags to 115.4 million primarily due to lower shipments from Brazil and Honduras. With global consumption forecast at a record 166.4 million bags, ending inventories are expected to slip 400,000 bags to 35.0 million. Coffee prices, as measured by the International Coffee Organization (ICO) monthly composite price index, dropped to $0.93 per pound in May 2019, the lowest since September 2006, but rebounded 15 percent to $1.07 by November 2019 as supplies tighten

Source: USDA Brazil Dominates the Exports

Brazil accounts for 26% of global raw coffee beans exports. The four types of coffee beans are arabica, robusta, Liberia, and excels. Arabica coffee beans are produced more in Brazil and robusta in Vietnam. There has been an escalation in demand for coffee beans market, as the existence of more number of coffee shop chains in many large populated countries has triggered the consumption of coffee. Export revenues mainly from coffee have declined over the years in Brazil, due to the expansion of other industrial sectors. However, Brazil still continues to be the major market for coffee beans due to already well-established production and export systems of coffee in the country.

Brazil

dominates global production

Brazil holds a share of 36% of the coffee production, worldwide, followed by Vietnam and Colombia. The crop first arrived in Brazil in the 18th century and had become the dominant producer of coffee beans. Coffee plantation in Brazil covers about 10,000 square miles. It monopolized the international coffee market and accounts for 80% of the market, it has exported between 32 million and 33 million bags in 2014. Brazil is the largest producer and exporter of coffee beans in the world. It has produced 3,090,000 metric ton and has exported 1,649,487 metric ton. The major countries that import raw coffee beans from Brazil in terms of values, as of 2017, are United States (USD 921,697), Germany (USD 879,183), Italy (USD 491,040), Japan (USD 323,977) among others. The share in the value of the United States in 2015 is 21.3% and it got reduced to 20% in 2017, Germany has 19% in 2015, and 19.1% in 2017. Brazil is also the second largest consumer of coffee.

Source: Mordor

Intellegence

USA Coffee Consumption

The United States imports the second-largest amount of coffee beans in the world, and is forecast to jump 2.4 million bags to 27.0 million. Ending stocks are forecast to gain 600,000 bags to 7.2 million. The top U.S. coffee supplying countries are: • Brazil – 23% • Colombia – 22% • Vietnam – 15% • Honduras – 6% Coffee Market Size to Reach USD 102,279.2 Million by 2023 at 4.32% CAGR Coffee Market is poised to touch USD 102,279.2 Mn by 2023 at an impressive 4.32% CAGR during the forecast period (2018-2023), reveals the latest report by Market Research Future (MRFR). Coffee is a beverage being largely consumed by the millennial populace. The popularity of the drink combined with its preparation in a variety of ways has led to its proliferation globally. Specialty coffee sales are increasing by 20% per year and account for nearly 8% of the 18 billion dollar U.S. coffee market. Coffee statistics show that among coffee drinkers the average consumption in the United States is 3.1 cups of coffee per day. How many cups of coffee are consumed daily in the US?

Coffee Statistics: 50% of the population, equivalent to 150 million Americans, drink espresso, cappuccino, latte, or iced/cold coffees. Coffee Shop Facts: Independent coffee shops equal $12 billion in annual sales. At the present time there are approximately 24,000 Coffee Shops across the country. Statistics show there will be approximately 50,000+ Coffee Shops within the years to follow. The average Espresso Drive-thru Business sells approximately 200-300 Cups of Espresso and Coffee Based Drinks per day. What percentage of people drink coffee?

Coffee Consumption: Over 50% of Americans over 18 years of age drink coffee every day. This represents over 150 million daily drinkers. 30 million American adults drink specialty coffee beverages daily; which include a mocha, latte, espresso, café mocha, cappuccino, frozen/iced coffee beverages, etc. Average Espresso Price: The average price for an espresso based drink is $3.45 Average Coffee Price: The average price for brewed coffee is $2.38. How much coffee does the average person drink?

Coffee Cup Consumption Per Day: Men drink as much coffee as women; each consuming an average of 1.6 cups per day. Women seem to be more concerned about the price than men. Among coffee drinkers, the average consumption in the United States is 3.2 cups of coffee per day. Average Cup Size: The average coffee cup size is 9 ounces. 30% of the population drinks coffee occasionally. Time of Day: 65% of all coffee is consumed during breakfast hours, 30% between meals, and the remaining 5% with other meals. Preferences: 35% of coffee drinkers prefer black coffee. 65% prefer to add sugar and/or cream. Miscellaneous

The United States imports in excess of $4 Billion worth of coffee per year. Americans consume 400 million cups of coffee per day making the United States the leading consumer of coffee in the world. On an average, 250 Cups of espresso and coffee drinks are sold per day at almost any espresso drive-thru business with a great visible location. (500 cups per day is extraordinary.) Independent coffee shops manage to sell 31% of espresso- based drinks, while the rest is brewed coffee. Source: e-Importz Market Scope

The global coffee market is predicted to expand at 4.32% CAGR from 2018 to 2023 (forecast period), as per the latest report by Market Research Future (MRFR). It is consumed in high volume thanks to its caffeine content, taste, and mouthfeel. MRFR projects its valuation to touch USD 102,279.2 million by 2023. Urbanization has led to the emergence of coffee shops which is likely to drive the sales in the coffee market. The rise of new retail outlets which act as a focal point for meetings and offer coffee in various styles to appeal to consumer tastes can augur well for the market. Launch of new brews, changing tastes of consumers, and rise in disposable incomes of consumers are other factors deemed to spur the market growth over the forecast period. The massive growth is indicated by the growing yields of coffee-producing nations such as India, China, Kenya, and Senegal. Fluctuating prices of coffee beans can act as a possible growth deterrent. But large beverage manufacturers are showing increasing interest in the hot beverages segment. This is instanced with the acquisition of the Costa retail chain by Coca-Cola in August 2018 to increase its share in the highly competitive market.

Key Players

Major producers in the coffee market include Nestlé SA (Switzerland), Tchibo Coffee International Ltd (U.K.), The Kraft Heinz Company (U.S.), Strauss Group Ltd (Israel), The Coca Cola Company (U.S.), Tata Global Beverages Ltd (India), Jacobs Douwe Egberts (The Netherlands), J.M. Smucker Company (U.S.), Unilever PLC (U.K.), and Starbucks Corporation (U.S.). Segmentation Analysis

The global coffee market is segmented by variety, form, and distribution channel. By variety, Robusta is expected to exhibit an exemplary growth on account of containing high amounts of asparagine, which is deemed to be vital in brain development. The need for instant coffee mixes is expected to propel the demand for Robusta in the forthcoming years. On the other hand, Arabica can display 4.07% CAGR over the assessment period. By form, ground held the largest share of the coffee market in 2017. It will continue to be the favored form till 2023. The segment can exhibit 4.45% CAGR over the review period to garner a value of USD 63,644.5 million. On the flip side, the whole form is projected to expand at 4.12% CAGR over the assessment period to touch a value of USD 38,634.7 million. By distribution channel, the non-store based channel is expected to exhibit 4.59% CAGR over the assessment period to touch a size of USD 30,592.9 million by 2023. This can be credited to the slew of ecommerce stores available which offer a plethora of coffee mixes at affordable rates. Moreover, this mode is likely to net in higher revenues and consumer mindshare thanks to consumers able to access them via smartphones. Industry Innovation

Coffee pods are containers which contain pre-packaged or grounded Coffee Market which can dole out portions for a single person. In addition, efforts by manufacturers for developing recyclable pods which can play a major role in sustainability initiatives of various countries is expected to spur the coffee market growth. For instance, Nespresso has partnered with Ag Choice for recycling aluminum pods. Ready-to-drink brews are another strategy by coffee manufacturers in gaining customer attention. The indulgence of customers in cold beverages coupled with their partnership with respected retail chains can ensure high bottom line margins. Regional Analysis

Regions taken under consideration with respect to the coffee market include North America, Europe, Asia Pacific, and Rest-of-the-World (RoW). The North American region is expected to display a stellar CAGR of 23.88% during the review period to generate USD 24,277.8 million for the coffee market. The consumption of Arabica blend of coffee and launch of new offerings by coffee manufacturers are factors expected to usher in massive demand for the market. Promotional activities via social media or print channels for enticing customers is likely to net in significant revenues. The APAC coffee market is envisioned to be highly lucrative due to the growth in middle-class and rapid urbanization. The region can exhibit 4.94% CAGR over the review period to attain a valuation of USD 28,031.9 million by 2023. In addition, the conferring of geographical indicator (GI) to local varieties of coffee for promoting the domestic flavors is expected to bode well for the market. The willingness of consumers to pay for premium blends is a good indicator for manufacturers to invest in R&D to capitalize on the trend. Source: Market Research Future U.S. COFFEE MARKET – STATISTICS & FACTS

Coffee is one of the most widely consumed beverages worldwide and in the United States. Millions of consumers all across the country cannot imagine starting their day without a hot cup of coffee. The plant naturally contains caffeine, which can vary sharply between individual plants. The market is segmented into growers, roasters and retailers. On the coffee- growing level, South America was ranked as the major coffee- producing region. Thereof, Brazil produced about 61.7 million 60 kg bags of coffee. Other major coffee producers were Vietnam and Columbia. On the U.S. retail level, the top selling coffee product was dry coffee, which generated 9.37 billion U.S. dollars in sales, while liquid coffee generated about 2.66 billion dollars in sales. Primary ground coffee brands for the at-home coffee segment included Folgers and Maxwell House, based on sales. Folgers is owned by The J.M. Smucker Co. and accounted for 1.09 billion U.S. dollars in 2018.

Although people have been drinking coffee for hundreds of years, there are still new trends entering the market every year, such as cold brew coffee and nitro coffee. Cold brew coffee is, as the name implies, brewed with cold or room temperature water over an entire day and has a higher caffeine concentration than regular coffee. Nitro coffee is infused with nitrogen and can be served like beer. In 2017, cold brew coffee experienced an 80 percent growth in sales compared to the previous year, while hot coffee saw a three percent decrease in sales.

Recent statistics show that American consumers drank on average about two cups of coffee per day. The majority of the coffee was consumed at home, followed by the work place. When asked why they usually drink coffee, the most U.S. consumers stated that they often drink the "black gold" simply because they like the taste. Source: Statista

Market Overview

US Coffee Market Grew to US$87-88 Billion in 2018

Overall: • The retail value of the US coffee market continues to grow, reaching US$87-88 billion in 2018 • Most retail sales of coffee in the US come from the “Away From Home” segment • “Away From Home” retail sales was almost US$74 billion, while sales of coffee purchased for At Home consumption was US$14 billion Away From Home: Coffeehouses continue to be a significant place of consumption out of the home, with sales at US$26.3 billion. Starbucks made up almost half of the total coffeehouse sales. Source: SCA News United States Coffee Market is forecasted to grow at a CAGR of 8.1% during the forecast period (2019-2024). • Coffee is among the most consumed beverages in the country. The average consumption of coffee is almost two cups per day. In the United States, ready-to-drink coffee products are booming, hence boosting the demand for instant coffee, as it is easy and convenient to prepare at home. • As per the survey conducted by the National Coffee Association in the United States, more than 70% of the consumers prefer at-home coffee preparation. There has been a gradual shift observed from soft drinks to coffee drinks among consumers

US coffee shop market grows to $45.4bn in 2018

The US coffee market has increased in volume by 3.8% over the last 12 months, with growth set to continue, according to Allegra World Coffee Portal’s 2019 Project Café USA report. After surveying more than 5,000 US consumers and 50 industry insiders, Allegra determined that the US coffee shop market grew to a $45.4bn valuation this year and that there are now 35,616 stores nationwide. The report revealed that industry leaders are positive on market conditions, anticipating 40,800 outlets by 2023 with a 5-year CAGR growth of 2.8%. But the industry also sees a high staff turnover rate, with labor costs and increased competition cited among main challenges for the coming year. Allegra predicts a ‘5th wave sector’​ will continue shaping the premium coffee market due to increasing consumer sophistication and larger multinational investments. It defines the 5th wave as the Business of Coffee driven by focus and excellence from smart boutique concepts. This recent era follows the 4th wave Science of Coffee, which Allegra says was driven by science and roasting obsession born from custom, in-house brews. "The 5th Wave is characterised by hyper-professionalism, operational excellence, investment in technology, and training and people development programmes – ultimately supporting valuable career paths for a new breed of hospitality professionals,"​ Allegra said. “An influx of international investment is pushing once niche artisan principles into the mainstream across the US coffee and food-focused sectors, with premiumization a key marketing strategy deployed to sustain growth.”​ Premium demand drives innovation

Nearly 60% of US consumers visited a branded coffee shop chain at least once a month in 2018, according to the report, though comparable sales among the top chains are flattening. The three largest coffee-focused chains are Starbucks, Dunkin’ Donuts and Tim Hortons, and they comprise 68.1% of the total branded market. Starbucks comes out on top with a 40.1% hold on the total branded coffee shop market, by far the largest. These top chains are being influenced by consumer demand for premium products and experiences, broadening their specialty coffee options and emphasizing quality. About a quarter of consumers said coffee quality is the biggest reason behind a repeat coffee shop visit. The industry insiders surveyed by Allegra believe this to be the biggest continuing trend in the coffee sector. It’s a competitive market that fights to maintain consumers who are becoming increasingly particular with how they spend their money. “Operators must successfully combine convenience, coffee quality and good location to maintain footfall, with loyalty apps, product diversity and a compelling brand USP all essential factors to success,”​ Allegra said. Source: Beverage Daily

Americans Are Drinking More Coffee Than Ever

The number of Americans who drink a cup of coffee daily is the highest it's been in six years. It probably seems as though everyone in your neighborhood and office building is in line for that cup of morning coffee just when you need it most. Well, it turns out that you're not imagining things. A recent survey finds that more Americans are drinking a daily cup of coffee today than they have been for the past six years. According to Reuters, a study commissioned by the National Coffee Association surveyed 3,000 Americans about their coffee drinking habits. The survey found that 64 percent of Americans drink a cup of coffee every day, up from 62 percent in 2017, and the highest percentage since 2012. What's more is that while it might seem like you can't walk a block without seeing another coffee shop, most people still enjoy making coffee at home despite the popularity of cafés like Starbucks; 79 percent of participants said that they had brewed a cup of coffee at home the previous day, while only 36 of people said they had bought a coffee from an outside location. Meanwhile, artisan coffee remains popular among a younger generation: 48 percent of millennials said they had a cup of coffee the previous day that could be considered gourmet, which might account for events like the recent Roasters Village at SXSW, where companies showcased innovations in the coffee realm (including one stall outfitted with a robot barista). Americans consume the most coffee in the world overall (although Finland consumes the most coffee per capita, or per person). Nonetheless, most of the world's coffee is harvested in the developing countries, like Guatemala and Indonesia. The majority of Americans drink coffee—around 83 percent —and it’s long been a booming industry in this country. For instance, the average American spends $1,110 on coffee annually, while coffee exporting is valued at $20 billion globally. Source: Food and Wine How Many People Drink Coffee?

In case you didn’t know, Americans love coffee. And while we still lag behind our European friends in coffee consumption (the U.S. ranks 25th in coffee consumption at 4.2 kg of coffee consumed per person per year, Finland ranks 1st at 12 kg per person per year – according to World Atlas), the U.S. consumption has increased by an entire kilogram in the last five years, and there is no sign of that trend stopping. The National Coffee Association produced a study this year and found that 64% of Americans drink coffee. Furthermore, 79% of people drinking coffee within the past day brewed coffee at home, compared to 75% in 2017 and 84% in 2012. It seems as though more people are starting to move towards making their coffee at home as opposed to going and purchasing it at a coffee shop (sorry Starbucks, but people are starting to opt for being their own baristas at home). In fact, past day consumption of coffee prepared outside the home dropped from 40% in 2017 to 36% in 2018, though it remains at higher levels than found in 2012-2017. Coffee in the home has become a morning tradition for many people, and we all know 1 or 2 people who we don’t dare talk to until they’ve had their first cup of the day. It’s part of just about everyone’s routine, and many Americans enjoy the process of making their cup of joe before they begin the day. With the rise of in-home coffee consumption and brewing, an increase in the need for mugs has also taken place. So, How Many People Do Drink Coffee in the U.S? So, How Many People Do Drink Coffee in the U.S?

To put a fixed number on just how many coffee drinkers there are is near impossible. That said, let’s go with an optimistic approach – according to USA Today as many as 83% of US adults drink coffee and according to Wikipedia in 2017 there were about 245,300,000 adults in the US. So that means we’re looking at roughly 20o million on the high end. Wow – that is a ton of cups per day and a huge opportunity. We’d love to help connect you with your favorite coffee drinkers! These coffee statistics are interesting to look at, and here are some other noteworthy statistics from the National Coffee Association: • Over the past six years, past-day soft drink consumption has dipped 15 points to 35% • 56% of people reported drinking unflavored bottled water within the past day, compared to 49% for tap water • Last year saw the highest one-year jump in past-day consumption of espresso-based beverages. The number held steady at 24% this year • Past-day consumption of traditional “gourmet” coffee (“regular coffee” brewed from “gourmet quality” beans) remained at 16% • Traditional “non-gourmet” past-day consumption also held steady at 31% • The numbers similarly held steady in each of these categories for past-week consumption • The only espresso-based beverage to see a statistically significant decline in past-week consumption this year was cafe mocha, from 14% to 12% • Only 19% of respondents age 18-24 drank traditional “non-gourmet” coffee within the past day • Within that same 18-24 range, 37% reported drinking a gourmet beverage within the past day • For respondents age 60+, past-day consumption of gourmet was 38%, while consumption of non-gourmet was 42% Source: Deneen Pottery

The Most Amazing Coffee Statistics

▪ Americans consume 75% of all their caffeine in the form of coffee. ▪ 66% of women drink coffee every day, compared to 62% of men. ▪ 79% of Americans prepare coffee at home. ▪ 48% of millennials consume gourmet coffee. ▪ About 29% of US coffee consumers drink coffee to relax. ▪ Robusta beans have a higher caffeine content than Arabica beans. ▪ A coffee plant can live up to 100 years. ▪ Brazil exports 5.7 billion pounds of coffee every year. • The second most sought after commodity in the world is coffee, Second only to crude oil. • 500 billion cups of coffee are drank every year worldwide. • 25 million people worldwide depend on farming for coffee for livelihood. • There are essentially only two type of coffee (Arabica & Robusta). • Over half of the population in America over the age of 18 drink coffee. • 75 percent of America’s caffeine intake source is coffee. • The fastest growing niche in the restaurant business are coffee shops. • Developing countries produce 90% of the worlds coffee. • Most coffee drunk per capita is in Finland. US Coffee Consumption Statistics

1. 64% of American adults currently consume coffee every day. 2. An average American drinks 3.1 cups of coffee per day. The FDA recommends that we keep our caffeine intake at 400 mg a day or less, which is equivalent to about 4 cups of coffee. Therefore, it looks like Americans stick to this recommendation, on average. 3. Americans drink about 400 million cups of coffee every day. According to recent coffee drinking statistics, the US is among the leading consumers of coffee in the world. 4. Americans drink about 146 billion cups of coffee per year. This statistic clearly shows just how obsessed Americans are with this tasty beverage. Still, when it comes to coffee consumption, they don’t even rank among the top ten countries in the world. 5. Americans consume 75% of all their caffeine in the form of coffee. Besides coffee, other common sources of caffeine are tea, energy drinks, soda, and chocolate. Interestingly enough, several health benefits of coffee aren’t related to its caffeine content, but to the fact that coffee is also a great source of antioxidants. 6. The average coffee cup measures 9 ounces. However, a typical cup of coffee in Japan is 200 milliliters (6.7 ounces), and in Canada, it’s 227 milliliters (7.6 ounces). 7. More than half of all coffee consumers would rather skip a shower in the morning than skip their coffee. Also, about 49% of them would rather do without their mobile phone for a whole month than give up coffee. Coffee Drinker Demographics

8. 66% of women drink coffee every day, compared to 62% of men. According to the statistics, there’s no big difference between men and women when it comes to consuming coffee. 9. The percentage of people who drink coffee is greater among workers with a higher income. In particular, 66% of people with an income greater than $30,000 consume coffee, compared to 58% of workers who earn less than that amount. 10. 74% of Americans aged 55+ drink at least one cup of coffee every day. If we look at coffee consumption by age, seniors are the greatest coffee consumers. Conversely, US adults aged 18–34 drink this beverage the least often. Consumer Behaviour

11. 65% of US adults drink coffee with their breakfast. 30% of them drink coffee between meals, and 5% drink it with meals other than breakfast. Some studies point out that the best times for this energy-boosting drink are between 10 a.m. and 12 p.m., and then 2 p.m. and 5 p.m. 12. 79% of Americans prepare coffee at home. According to a survey conducted by the National Coffee Association (NCA), Americans tend to drink coffee at home. Only 36% of respondents said that they’d had a cup of coffee away from home the previous day. 13. About 35% of coffee consumers usually drink black coffee. The remaining 65% prefer to sweeten this beverage or to add some cream. 14. 48% of millennials consume gourmet coffee. Data collected by the NCA shows that younger coffee drinkers consume more gourmet coffee than other age groups. According to the coffee statistics from 2018, 36% of people from this generation drink cappuccinos, lattes, and the like, and 22% of them like espresso. 15. Most women like drinking coffee because this ritual helps them relax. On the other hand, men say that coffee improves their efficiency. Apparently, there’s a big difference among genders when it comes to their reasons for drinking coffee. 16. About 29% of US coffee consumers drink coffee to relax. Why do most people drink coffee? According to the NCA’s survey results, almost a third of Americans who drink coffee enjoy this beverage because it helps them unwind. 17. 9% of US coffee drinkers order coffee through an app. The NCA’s survey shows that only a few Americans use apps to order coffee. 18. 45% of US coffee consumers brew their coffee by a drip coffee maker. A survey conducted by the NCA revealed that 45% of their respondents used a drip coffee maker the day before. This coffee preparation method is followed by single-cup brewing systems. 19. About 13% of coffee drinkers in the US use espresso machines. In the survey conducted by the NCA about coffee consumption in the US in 2019, about 12% of respondents said they’d used an espresso machine the previous day. The Coffee Market

20. The average price of a cup of coffee in the US is $3.28. Considering how much coffee Americans drink, we can conclude they spend a considerable amount of money on this beverage. 21. The annual coffee retail sales in the US are about $5.2 billion. This piece of coffee industry statistics depicts consumer spending habits as well as the coffee market’s potential. 22. South America produced 81.5 million bags of coffee in 2018. Considering that each bag weighs 60 kilograms, South America produced more than 5 million tons that year. This makes them the greatest coffee producer in the world. 23. Brazil exports 5.7 billion pounds of coffee every year. This country is the largest coffee exporter in the world. Interestingly, Brazil produced about 80% of all the coffee in the world in the 1920s. Nowadays, according to the coffee stats, it supplies around a third of the world’s coffee. 24. Colombian mild Arabicas were the most expensive coffee per pound in 2017. Arabica and Robusta are the most popular coffee varieties. Generally, Arabicas are more expensive than Robusta varieties.

Coffee Shops

25. There are about 24,000 coffee shops in the US. Considering this sector’s growth rate, this number is expected to double within the following years. Interestingly, Seattle has the largest number of coffee shops per 100,000 residents in the US. 26. On average, a coffee shop sells 230 cups of coffee per day. Therefore, based on coffee shop sales statistics, its annual sales amount to about 84,000 cups of coffee on average. 27. Coffee shops have a 7% annual growth rate. This growth rate makes coffee shops one of the fastest- growing segments of the restaurant industry. 28. Monaco has about 52 Starbucks branches per one million inhabitants. According to statistics, Monaco is the leading country when it comes to the number of Starbucks branches per capita. The US comes second in this list. Source: Disturbmenot

COFFEE SHOP INDUSTRY – A STRATEGIC ANALYSIS

Coffee Shops market worldwide is projected to grow by US$58.7 Billion, driven by a compounded growth of 4.1%. Coffee, one of the segments analyzed and sized in this study, displays the potential to grow at over 4.6%. The shifting dynamics supporting this growth makes it critical for businesses in this space to keep abreast of the changing pulse of the market. Poised to reach over US$143.4 Billion by the year 2025, Coffee will bring in healthy gains adding significant momentum to global growth. Representing the developed world, the United States will maintain a 4.2% growth momentum. Within Europe, which continues to remain an important element in the world economy, Germany will add over US$2.8 Billion to the region's size and clout in the next 5 to 6 years. Over US$10.8 Billion worth of projected demand in the region will come from Rest of Europe markets. In Japan, Coffee will reach a market size of US$10 Billion by the close of the analysis period. As the world's second largest economy and the new game changer in global markets, China exhibits the potential to grow at 7.8% over the next couple of years and add approximately US$5.6 Billion in terms of addressable opportunity for the picking by aspiring businesses and their astute leaders. Presented in visually rich graphics are these and many more need-to-know quantitative data important in ensuring quality of strategy decisions, be it entry into new markets or allocation of resources within a portfolio. Several macroeconomic factors and internal market forces will shape growth and development of demand patterns in emerging countries in Asia-Pacific, Latin America and the Middle East. Companies in this industry sell coffee drinks and other food and beverages for consumption on the premises or for takeout. Major companies include International Coffee & Tea (The Coffee Bean & Tea Leaf), Peet's Coffee, and Starbucks (all based in the US), as well as Costa Coffee and Caffè Nero (both based in the UK). The biggest US coffee chains operate stores abroad, primarily through licensing agreements. Starbucks owns and licenses about 30,000 locations in about 78 global markets. The world's largest coffee consumers include the US, Brazil, Germany, and Japan. The US coffee shop industry includes more than 35,500 stores with combined annual sales of about $45 billion, according to Allegra World Coffee Portal. Coffee shops are part of the specialty eatery industry, which also includes outlets specializing in products such as bagels, donuts, frozen yogurt, and ice cream. Coffee is one of the world’s largest commodities. The top green coffee producing countries are Brazil, Colombia, and Vietnam. Many grower countries are small, poor developing nations that depend on coffee to sustain local economies. The U.S. is the world’s largest importer of green coffee beans and the largest consumer of coffee. With the exception of Hawaii and Puerto Rico, the United States’ climate cannot support coffee trees. Major products sold by coffee shops include beverages as well as complimentary food items. Beverages include brewed coffee and tea; espresso drinks (cappuccinos, cafe lattes); cold blended beverages; bottled water; soft drinks; and juices. Food products include pastries, bakery items, desserts, sandwiches, and candy. Many coffee shops sell whole or ground coffee beans for home consumption. Some coffee shops sell coffee or espresso-making equipment, grinders, mugs, and other accessories. Most coffee shops serve high- quality, premium coffee known as specialty coffee. Source: Allegra Project

Outlook for Coffee in US

▪ Revenue in the Coffee segment amounts to US$85,135m in 2020. The market is expected to grow annually by 4.2% (CAGR 2020-2023). ▪ The market's largest segment is the segment Roast Coffee with a market volume of US$69,720m in 2020. ▪ In global comparison, most revenue is generated in the United States (US$85,135m in 2020). ▪ In relation to total population figures, per person revenues of US$257.20 are generated in 2020. ▪ The average per capita consumption stands at 3.8 kg in 2020. ▪ In terms of liquid beverage equivalents, coffee is among the most consumed beverages worldwide with roughly 42.6 liters per person and year (12.6 liters of roast coffee and 30 liters of instant coffee). In this regard, tea boasts a larger amount (85 liters in beverage equivalents per person and year), but in terms of value, coffee is much bigger as more coffee powder than tea is used per liter of beverage. Value sales of coffee have been propelled in recent years by the out-of-home sector, which is more relevant in this segment than in many other drinks categories. Another trend is the redefinition of coffee from a common means of caffeination to a sensual experience, which has driven premiumization. ▪ By 2023 89% of spending in the Coffee segment will be attributable to out of home consumption (e.g. in bars and restaurants). ▪ In the Coffee segment, volume is expected to amount to 1,309.7 mkg by 2023. ▪ The average volume per person in the Coffee segment amounts to 3.8 kg in 2020. ▪ The average price per unit in the Coffee segment amounts to US$68.49 in 2020. ▪ With a market volume of US$85,135m in 2020, most revenue is generated in the United States. Source: Statista Over the five years to 2019, the Coffee and Snack Shops industry has been bolstered by growth in the domestic economy. Increases in consumer spending, driven by higher disposable income and rising consumer confidence, have led to increased spending at industry locations when coupled with the falling unemployment rate. Demand for coffee and snack shops has increased at a faster rate than most segments of the food service sector as consumers are increasingly seeking convenience at an affordable price. The industry has experienced a boost from increases in consumer spending and per capita coffee consumption during the five-year period, which have grown at annualized rates of 2.9% and 1.1%, respectively. How is the Industry Trending in the US?

Market Share in the US

The companies holding the largest market share in the Coffee & Snack Shops in the US industry include Starbucks Corporation. What Products & Services Make Up This Industry in the US? The Coffee & Snack Shops in the US industry consists of Food consumed in-store, beverages consumed in-store, food taken to-go, beverages taken to-go, food ordered via drive- through, beverages ordered via drive-through and other.

Industry SWOT Analysis

The industry is exposed to the following threats and opportunities: • In the US, there has been an increase in awareness of health and nutrition over the past decade, which has led to growth in healthy eating. Consumers are more aware of health issues associated with fatty foods and are increasingly going out of their way to avoid them. The healthy eating index is expected to marginally decrease in 2019. However, as consumers' diets progressively improve, it poses a potential threat to industry operators. • Factors that influence consumer spending also affect the Coffee and Snack Shops industry. During periods of low economic growth, spikes in unemployment lead to consumption declines. However, when consumer spending is high, consumers are more likely to spend money at snack and coffee shops. Consumer spending is expected to increase in 2019, providing a potential opportunity for the industry. Source: IBIS

Coffee & Snack Shops in the US Market Size 2010–2020

$51.6bn - Coffee & Snack Shops in the US Market Size in 2020 1.8% - Coffee & Snack Shops in the US Market Size Growth in 2020 3.1% - Coffee & Snack Shops in the US Annualized Market Size Growth 2015–2020 Questions Clients Ask About This Industry

• What is the market size of the Coffee & Snack Shops industry in the US in 2020? - The market size, measured by revenue, of the Coffee & Snack Shops industry is $51.6bn in 2020.

• What is the growth rate of the Coffee & Snack Shops industry in the US in 2020? - The market size of the Coffee & Snack Shops industry is expected to increase 1.8% in 2020.

• Has the Coffee & Snack Shops industry in the US grown or declined over the past 5 years? - The market size of the Coffee & Snack Shops industry in the US has grown 3.1% per year on average between 2015 and 2020.

• How has the Coffee & Snack Shops industry in the US performed compared with the Accommodation and Food Services sector in the US? - The market size of the Coffee & Snack Shops industry in the US increased faster than the Accommodation and Food Services sector overall

• Where does the Coffee & Snack Shops industry in the US rank in terms of market size in 2020? - The Coffee & Snack Shops industry in the US is the 8th ranked Accommodation and Food Services industry by market size and the 204th largest in the US.

• What factors affect growth of the Coffee & Snack Shops industry in the US? - The primary negative factor affecting this industry is high competition, while the primary positive factor is a low revenue volatility.

• What is the biggest opportunity for growth in the Coffee & Snack Shops industry in the US? - Factors that influence consumer spending also affect the Coffee and Snack Shops industry. During periods of low economic growth, spikes in unemployment lead to consumption declines. However, when consumer spending is high, consumers are more likely to spend money at snack and coffee shops. Consumer spending is expected to increase in 2019, providing a potential opportunity for the industry.

• How has the Coffee & Snack Shops industry performed compared with other US industries over the past five years? - The market size of the Coffee & Snack Shops industry in the US increased faster than the economy overall. Source: IBIS Coffee & Snack Shops Number of Businesses 2010–2020

59,679 - Coffee & Snack Shops Businesses in the US in 2020 2.4% - Coffee & Snack Shops in the US Business Growth in 2020 2.8% - Coffee & Snack Shops in the US Annualized Business Growth 2015–2020

Questions Clients Ask About This Industry

• How many businesses are there in the Coffee & Snack Shops industry in the US in 2020? - There are 59,679 Coffee & Snack Shops businesses in the US as of 2020.

• What is the business growth in the Coffee & Snack Shops industry in the US in 2020? - The number of businesses in the Coffee & Snack Shops industry is expected to grow 2.4% in 2020.

• Has the number of Coffee & Snack Shops businesses in the US grown or declined over the past 5 years? - The number of businesses in the Coffee & Snack Shops industry has grown 2.8% per year on average over the five years between 2015 - 2020.

• Which States have the highest number of businesses in the Coffee & Snack Shops industry in the United States? - Alabama, Alaska and Arizona are the States with the most number of Coffee & Snack Shops businesses in the US.

• Does the Coffee & Snack Shops industry in the US require significant investment in equipment? - The Coffee & Snack Shops industry relies on both capital (plant, machinery and equipment) and labor to similar degrees.

• What companies have the highest market share in the Coffee & Snack Shops industry in the US? - The Coffee & Snack Shops industry has low market share concentration and the largest business is Starbucks.

• What region has the highest number of businesses in the Coffee & Snack Shops industry in the US? - The West region of the United States accounts for the largest share of Coffee & Snack Shops business locations. Source: IBIS Coffee & Snack Shops Employment Statistics 2010 – 2020

Source: IBIS Coffee & Snack Shops Wage Statistics 2010 – 2020

$13.1bn - Coffee & Snack Shops Wages in the US in 2020 2.4% - Coffee & Snack Shops in the US Wage Growth in 2020 3.7% - Coffee & Snack Shops in the US Annualized Wage Growth 2015–2020

Questions Clients Ask About This Industry

• What are total wages in the Coffee & Snack Shops industry in the US in 2020? - The Coffee & Snack Shops industry pays total wages of $13.1bn in 2020.

• What is the total wage growth in the Coffee & Snack Shops industry in the US in 2020? - Total wages paid by the Coffee & Snack Shops industry is expected to increase 2.4% in 2020, to $13.1bn.

• Have wages grown or declined in the Coffee & Snack Shops industry in the US over the past 5 years? - Total wages paid by the Coffee & Snack Shops industry increased 3.7% per year on average over the five years between 2015 and 2020.

• What is the average wage in the Coffee & Snack Shops industry in the US in 2020? - The average wage per employee in the Coffee & Snack Shops industry is $796k in 2020.

• Where does the Coffee & Snack Shops industry in the US rank in terms of average wage in 2020? - The Coffee & Snack Shops industry in the US is the 8th ranked Accommodation and Food Services industry by average wage and the 147th largest in the US. Source: IBIS Competitive Landscape

Consumer taste and personal income drive demand. The profitability of individual companies depends on the ability to secure prime locations, drive store traffic, and deliver high- quality products. Large companies have advantages in purchasing, finance, and marketing. Small companies can compete effectively by offering specialized products, serving a local market, or providing superior customer service. Coffee shops compete with businesses such as convenience stores, gas stations, quick-service and fast-food restaurants, gourmet food shops, and donut shops. The US industry is concentrated: the eight largest companies account for about 70% of revenue. Competitors identified in this market include, among others, Starbucks; Costa Coffee; McCafe; Doutor Coffee; Coffee Bean & Tea Leaf; Caffe Nero; Tullys Coffee; Ediya Espresso; Caribou Coffee; Gloria Jeans Coffees The reports says intense competition within the largest cities has encouraged major operators to focus expansion in second- tier locations and less densely populated urban areas

Starbucks is by far the largest coffee chain in the US, retaining a 40 per cent share of the total coffee shop market with 14,875 outlets and adding 585 net new stores over the last 12 months. Dunkin’ remains the second largest branded coffee chain with 9570 outlets, opening 309 net new stores to achieve a 26 per cent market share. The two market leaders accounted for 80 per cent of new US store openings during the last 12 months. German-owned conglomerate JAB Holdings continues to exert significant market influence, operating a total of 4739 outlets across 15 prominent brands including Panera Bread, Peet’s Coffee, and Caribou Coffee. Collectively, Starbucks, Dunkin’, and JAB Holdings-owned brands comprise 78 per cent of the US branded coffee shop segment, a collective increase of 899 outlets compared with 12 months ago. Industry leaders surveyed by Project Café USA 2020 cited growth in specialty coffee as the most important consumer trend currently affecting the US coffee shop market. More than 80 per cent also identified cold brew as the fastest growing product in coffee shops. These product trends are heavily influenced by under-30s consumers, who are more willing to try new products than older demographics. This age group is also most likely to have significantly increased coffee shop visitation over the last 12 months, making them a key demographic for sales growth. Customer Overview

The typical and most committed coffee drinkers are 25 to 45 year old, affluent, educated adults. While baby boomers have driven the success of coffee shops, specialty coffee appeals to a diverse adult demographic, including college students and young adults. Larger companies may also sell coffee beans wholesale to commercial customers, such as grocery stores and restaurants Coffee shops depend highly on part-time employees, and most workers require few skills. Many employees make just above the minimum wage, and pay can be significantly below the average for all U.S. workers. A typical chain coffee shop may have one manager and 10 to 15 workers; independents have six to seven. New employees may go through training courses and receive in-store training to ensure superior customer service and product consistency. Master roasters oversee coffee roasting to develop trademark blends and flavors. Baristas receive training to operate commercial grade espresso machines used to make specialty drinks. Sales are seasonal, with a peak during fourth quarter, driven by the winter holiday. In addition, poor weather can affect sales by decreasing store traffic. For large companies, inventory amounts to between 40 and 80 days sales. Accounts receivable runs between 20 and 30 days sales, mainly due to commercial customers. Accounts payable runs between 30 and 60 days sales. Companies may use contracts to buy green coffee and dairy products. Gross margins range between 40 and 60 percent, and higher commercial sales tend to decrease margins. Chains use comparable store sales to measure growth. Most companies lease store locations for a fixed term. Rent for coffee shops in malls may include a fee for shared area maintenance. Companies compete for prime locations, sometimes with other retailers, and negotiating power may be limited. Chains periodically close underperforming stores, and set aside a reserve for remaining lease payments. Franchise and license agreements typically include an upfront fee, payments or royalties based on percentage of sales, and renewal options. Master license agreements may allow licensees to grant sublicenses to third parties within a territory. U.S. coffee shops: market share

Starbucks was the largest coffee shop chain in the United States by number of units as of October 2019. According to the source, the world famous chain accounted for approximately 14.88 thousand stores in its home nation. In comparison, competitor Dunkin' (formerly known as Dunkin' Donuts) had around 9.57 thousand stores. Source: Statista Competitive Forces that impact competition (Porter Model)

Competition within the Coffee Shop Industry

▪ Highly concentrated at top and fragmented at bottom – Starbucks ~ 75% of sales ▪ Major companies: Starbucks, Caribou Coffee, Coffee Bean and Tea Leaf, competitor Dunkin' (formerly known as Dunkin' Donuts) ▪ Competitors can also be found in other industries (convenience stores, gas stations, quick service, fast food restaurants, gourmet food shops, donut shops, filter / specialty coffee machines for home use) e.g. Dunkin’ Donuts and McDonalds ▪ Competition through special offers (new tastes), outstanding service/ environment (internet, music, comfortable seating areas, short waiting queues), loyalty programs (bonus cards ensuring frequency of visits) and for premium locations (retail centers, university campuses, etc.) Substitute Products

▪ Competition with other drinks that are not the main focus of by coffee shops: Soda, Juice, Water, Beer, Sports Drinks ▪ Competition with other products, people are spending their money on: Ice Cream, Cigarettes, Sweets ▪ Consumers have limited discretionary budget to spend on consumer goods, such as cigarettes, beer and also coffee; coffee shops are therefore fighting for a fraction of this budget. Barriers to Entry

▪ Rather low entry barriers: easy to open a single small café ▪ Rent a place, remodel, install the equipment, get license as needed ▪ However there are high entry barriers for the specialty level or big league/chain players ▪ High up-front investment needed to grow significantly (distribution system: shops, equipment, premium locations; marketing: creation of brand awareness & brand recognition, customer retention) ▪ Strong brand recognition of major players, especially Starbucks ▪ Partnerships with large, international companies also serve as potential entry barrier for new competitors – Starbucks with Pepsi/ Jim Beam/ Dryer’s Grand Ice Cream/ Barnes & Noble or Caribou Coffee with Apple ▪ Economies of scale (purchase advantages; centralized HR and Marketing) realized by big players, especially Starbucks ➔ cost disadvantage for new entrants Barriers to Entry in the Coffee Industry ➔ Small barriers to entry for small regional chains / cafés, but their expansion is relatively slow due to the increasing speed of the expansion of the major players ➔ High barriers to entry into the industry for big players due to high industry concentration on top, huge brand recognition of major brands and high up-front investments are needed Power of Suppliers

▪ Volatile Raw Material Costs ▪ Particular dependence on supply of higher-priced Arabic beans (premium coffee) – as imported mostly from developing countries, price varies along with the economical and political situation of the export country ▪ Dairy products, whose retail prices vary a lot, used for specialty drinks ▪ Coffee Shop Chains have contracts securing price stability ▪ For most coffee-exporting countries (over 60 ) that is their only “source of cash” ▪ Higher world market demand and higher prices for differentiated (Gourmet and specialty coffees) and sustainable coffee (organic, fair trade, eco-friendly or shade grown) than for coffee commodity: Farmers not agile enough or don’t have the means to switch production Companies are helping communities to make the change (train them, purchase at fair trade prices and provide technical assistance). Power of Suppliers in the Coffee Industry ➔ Very limited power of suppliers as they depend on producer’s help and sell a commodity. Power of Customers

▪ High dependency of coffee shop chains on frequency of customer purchases ▪ Most customers appreciate the nice atmosphere in the coffee shops ▪ Preferences of customers are very likely to switch as they might get bored with / tired of the same flavor (relatively low brand loyalty) ▪ Shopping behavior is very likely to be influenced by budget constraints, weather conditions or health concerns in the general public ▪ Interested in continuous product innovation or seasonal specialties ▪ Essential for success – word of mouth and frequency of purchase Power of Customers in the Coffee Industry ➔ Very strong power of customers as coffee shops depend on word of mouth and customer retention Furthermore a customer’s opinion, preferences and shopping habits can be influenced easily which creates a big threat for the companies. Driving Factors that are causing the industry’s structure to change

Expansion/Growth A significant driver in the coffee shop industry is growth in the form domestic and international expansion. The key channel of distribution in this industry is “company-operated stores located in high-traffic, high visibility centers,” and industry competition is structured around vying for market share by opening new retail shops in cities around the world. Product/Service Innovation A second driving force in this industry is tied to product innovation. Serious coffee shop contenders now offer a product selection broader than the traditional cup of coffee. National chain and even local coffee shops boast menus including coffees, teas, hot chocolate, pastries, bottled water, and even sandwiches. Service innovation is also impacting the industry in that companies are now required to offer a diverse set of services including music, drive-through services and newspapers to stay competitive. For example, to compete with Starbucks’ alliance with T-Mobile which offers wireless capabilities to its customers, Caribou now offers free wireless Internet access (for up to an hour) to its customers. Collaboration/Partnership A further critical driver, which ties into the industry’s focus on growth and product/service innovation, has been collaboration and partnership. Starbucks was the first to realize the benefits of partnering when it reached out to powerhouse brands like Pepsi, Barnes and Noble, Nordstrom, Kraft and United Airlines to create new products, reach new customers and enter new channels of distribution like grocery, cruise lines and the airline industry. Caribou has followed suit and partnered with General Mills to produce a breakfast bar, USAToday to provide a news services to its customers, and most recently, Coca-Cola, to directly compete with Starbucks ready-to-drink iced coffees. Image/Lifestyle Additionally this industry is increasingly impacted by consumer’s perception of what a brand stands for. When Starbucks was first created, its CEO’s vision was to create a “third place” for Americans. Americans already spent considerable time at home and work and his vision was to provide a third place for Americans to not only drink coffee but to invest significant personal time. For this reason, industry marketing efforts are closely tied the image/lifestyle projected by the chain. Key factors that determine success in the future

Product and Service Innovation in the Future Several key factors within the coffee shop industry are essential components that will likely lead to success or failure of market participants. As already highlighted in the “Driving Factors” product and service innovation are necessary in order to stay competitive in the market and attract new / keep existing customers successfully. Many customers focus on the special atmosphere each store has and which is characterized by the location, music, interior design, seating or whether internet access is provided. Particularly for specialty coffee shops it is important not to sell only the beverage but the whole experience. Coffee shops have to establish a unique image that prevents customers from buying products from another shop or use home-brewing systems which are also on the rise in American households. In addressing the increased level of competition, every company’s focus should be on differentiating from the rest of the market in every possible business segment (products, atmosphere, location, image etc.) Technology Furthermore it is important to have state-of the art technology in the shop in order to serve high quality and differentiated products. Advantages of high level technology and machines are shorter waiting times for the customers and the ability to create a variety of fresh, new and unique flavors. On the other hand it is essential that the level of automation and machinery is well chosen and that there is a clear plan how to integrate the new machinery into the business. Even though there is an increase in efficiency it might mean a loss of identity and differentiation for some stores, such as Starbucks, which focuses on a special spirit in their shops. Education About Coffee Coffee shop companies should start or continue to educate the consumers about coffee, its ingredients, quality differences, and about the movements in the market, such as “Fair Trade” or “organic coffee”. This could be beneficial for developing a relationship with the customers which in turns leads to greater brand loyalty. Informed customers are able to make educated decisions and will be less likely to switch just based on gut feeling. Furthermore this education might motivate coffee buyers to pay a higher price for better products. Cooperation Several companies have proven already that a key factor in the future will be the ability and willingness to cooperate with other market participants without losing control of the business. Therefore it is important to pursue a full range of alliance opportunities: partnerships for innovation and cost reduction but also geographic expansion and co-marketing deals. Finally such partnerships might become tickets to the “global game” as Coca-Cola and Microsoft already proved Quality Control, Consistency Besides the cooperation with other partners in the industry the coffee shop companies have to ensure that the quality of products and services as well as the cleanliness of the location are consistent and at the desired level from shop to shop (including especially franchisees and licensees) so that the consumers can build trust in the brand. Furthermore the role of the “barista” should not be underestimated and great commitment should be recognized and rewarded. The barista is the personality and sole representative of the specialty coffee supply chain to the consumer. They not only can make drink suggestions or recommendations, but their skill can be the difference between an everyday latte and an amazing specialty coffee experience. Role of Regulations The trend of stricter regulations in the coffee industry started already, e.g. with new organic rules and is expected to become even more severe in the future which underlines the fact that coffee shops have to cooperate with their suppliers in order to control the quality of their products along the value chain. Companies should participate mainly for ethical reasons in campaigns such as “Fair Trade”. In addition to that, if these social movements gain more attention in the market, the companies could also benefit from the positive public relation associated with the social commitment and engagement. To sum it up, coffee shops have to target their customers effectively in terms of product portfolio, company image and atmosphere as well as advertising and coffee shop location while paying attention to the partners along the value chain and look out for beneficial cooperation within and between industries Coffee Shop Target Market

If your interested in opening your own coffee shop then this post on Coffee Shop Target Market is something you don’t want to miss. Lets find out why coffee shop target market is so important. According to recent research about 77% of all adults in the United States alone drink some sort of coffee on a regular daily basis. A lot of these coffee lovers actually prefer drip coffee so it is important that you make sure that your coffee shop has the right equipment to offer this type of coffee lover this kind of coffee. If you are wanting to draw in people from all economic ranges and age groups then you will want to make sure that you price you coffee at a reasonable price, especially for the drip style coffee. If on the other hand you only want to attract the upscale market then you can get away with charging more for your drip coffee.

Coffee Shop Target Market: Coffee Shop Lovers

Since your business is an actual coffee shop then this is the main target market you want to focus on. These are the type of coffee lovers who spend time in a coffee shop or cafe where they can choose from a variety of different specialty beverages or regular coffee where the atmosphere is inviting. These are people who are not in a hurry and just want to grab a quick cup of java and be on their way. They prefer to sit and relax while drinking the coffee you’ve served them, perhaps have a little to eat with it and just enjoy the social atmosphere a nicely planned coffee shop has to offer. So it’s important that if this is your key target market that your coffee shop be set up in a comfortable and inviting manner. If your seriously thinking of starting your own coffee shop startup then it would be in your interest to check these in- depth, A to Z guides which will teach you everything there is to learn about starting your own coffee shop and being successful at it.

Coffee Shop Target Market: Specialty Coffee Lovers

Knowing your coffee shop target market – specialty coffee lovers is very important. There are always going to be those coffee lovers that won’t have anything to do with regular drip coffee or anything like it and if you want to also attract this kind of customer you will need to have the right equipment and coffee to be able to serve them what they want. This means you should be able to serve espressos, lattes, mochas and cappuccinos. These people love to have lots of extra ingredients put in their coffee and they will be willing to pay for it too. This is a fast growing market and is continuing to grow so it’s important that your coffee shop is able to bring them in and cater to them as well. Keep in mind just having high quality coffee beans is not enough. You need to have the right kind of coffee equipment. Coffee Shop Target Market: Whole Bean Lovers

This is a group of coffee lovers that prefer to make their own coffee but will only do it with whole bean coffee. If you are interested in serving this type of customer as well this means that you need to have a variety of bagged whole bean coffee available for them to choose from. These are people who prefer to buy the beans, grind them at home so they can have the freshest coffee they can right in their own kitchens every morning. So make sure that you sell it by the pound in a variety of flavors from different regions and offer a good mix of Arabica and Robusta whole bean varieties for this type of coffee lover. Source: Espressogurus

Key Market Trends

Green Coffee as a Weight Loss Beverage

Owing to the health benefits of green coffee, a lot of people are consuming it for their weight loss mechanism. Although, the production of green coffee has increased but not at a significant pace. There are fluctuations in the demand for green coffee which is leading to the fluctuations in production of green coffee. It is expected that its production will increase in the coming years but at a slow pace. Green coffee has positive health impacts on blood vessels as well as on heart health. It also affects the bodies absorb and use carbohydrates. Increasing Usage of Single Serve Coffee in Households

An increasing number of consumers are willing to purchase coffee machines to recreate the coffee shop experience at home. Players are introducing coffee pods that are compatible with popular machines, such as Nespresso, to feat this trend. There are more than 25 million Keurig® and K-Cup® Brewers installed in homes and offices across the United States, with millions more being sold each year. Single-serve brewer household penetration rates in the largest cities in the United States and Western Europe range from approximately 23% to 75%.

Source: Mordor Intellegence Growth

While research from the National Coffee Association’s 2017 National Coffee Drinking Trends report suggests that coffee consumption is increasing among coffee drinkers of all ages, it appears that younger groups are having the biggest influence. Bill Murray, National Coffee Association president and CEO suggests that “More of us are drinking coffee, and younger consumers appear to be leading the charge.” According to the report, 50% of youth aged between 18-24 claimed to have consumed a coffee beverage within the past day, a 2% increase from 2016. Significantly, 63 percent of adults between the ages of 25-39 said they consumed coffee within the past day, a 3 percent increase from last year. Cold Brew

Cold brew coffee is gaining popularity among consumers, with sophisticated machines continually refining the process and enhancing the taste. Cold brew is more than simply adding ice to your regular cup of joe; the process involves brewing coffee with room temperature or cold water between 12 and 24 hours. The result is a cold cup of coffee with a more rounded taste and less acidity, and younger consumers are becoming increasingly fond of the gourmet variety. Nitro Coffee

Another increasingly popular way to drink coffee is what is known as “Nitro” coffee. While the beverage has existed in the market for the past few years in various third wave coffee shops, it is becoming increasingly mainstream and Starbucks has recently introduced it to their menu. Nitro coffee consists of cold brew coffee with nitrogen added, resulting in a beverage with a creamy mouthfeel. Its increasing popularity among consumers will inevitably see it spread to other retailers, as millennials look for new and unique ways to get their morning kick. Organic Coffee

Another trend that is dominating the coffee craze especially among the younger generations is organic coffee. Since millennials appear to be increasingly concerned with eco- sustainability, coffee products processed without using any artificial or chemical substances are becoming extremely trendy. Manufacturers and retailers need to be aware of this trend and adjust their processes to suit. Source: Unleashed Trendy new coffee flavours

Another emerging coffee industry trends that you can take advantage of right now is the introduction of new coffee flavors. Frappuccino and iced lattes are classic favorites, but the ever-changing taste buds of coffee fanatics demand new aromas and exciting mixes. Attract customers by offering them different flavors, new types of coffees, and exclusive alternatives that are unique only to your shop. You can start introducing sweeter and creamier beverages for those with a sweet tooth, while health-conscious patrons can lavish on nutrient-rich drinks filled with organic and superfood ingredients. You can also offer cold brews to lower acidity without removing the natural flavors and invigorating aroma of the coffee. Other new coffee mixes you can experiment with include: • Bulletproof coffee for a quick burst of long-lasting energy with no crash or jitters. • Mix espresso with tonic water for a bubbly brew that millennials will definitely love. • Add healthy ingredients like grains and mushrooms to make flavor-infused hot or iced coffee.

Ready-to-drink coffee

The second wave of the coffee movement made coffee more of a luxury rather than a necessity, but as the industry enters the third wave, consumers will soon start to see changes in how they drink and think about coffee. This time, the emphasis is focused on faster service and convenience of experience. Keep in mind that coffee is still considered a beverage, and its sales are affected by the latest trends within the canned and bottled industry. While soft drinks and sugary juices are becoming less and less popular, ready-to-drink coffee, on the other hand, is seeing a huge surge in demand. Nowadays, people want things quick and easy, including their coffee. With the rising trend of ready-to-drink coffees, it creates new opportunities for players in the market to capitalize on this newest coffee consumption mania. • Offer new concoctions that consumers can easily grab in your store. • People want high-end, low-calorie, and less sugary drinks, as well as lattes. • It’s okay to go premium, as long as it is healthy and within reasonable limits. Technology to make your business more efficient

The important coffee industry trend you really shouldn’t miss is focusing on improving customer experience. From your daily operations to engaging in customer service, you should build your efforts to simplify the whole process to make things more convenient. Your shop should be conducive enough to welcome customers, and you should have the right tools to streamline the process such as using point of sale (POS) systems. When it comes to tracking your inventory, invest in applications that will provide real-time insights regarding your current stock level. You could also do the following to keep the lines moving: • Optimize your ordering area to maximize the space for both employees and customers. • Develop a system that will allow online ordering and pickup to minimize the time customers spend queuing.

Infographic: The Behaviors & Perceptions of US Coffee Drinkers

Source: National Coffee Association

Source: DIG Insight The Average Profits for a Small Café

Although most adults drink coffee at least once a day, running a small cafe is unlikely to make you rich. The top 50 coffee shop chains actually earn 70 percent of the profit in the industry. Gross margins for cafes run as high as 85 percent, but small coffee shops tend to have average operating income of just 2.5 percent of gross sales. Despite the financial hurdles, if you open a coffee shop, you may find yourself doing work you love and creating a gathering space that's a focal point for your community. Tip The average profit for a small cafe is about 2.5 percent, but large coffee operations tend to earn much higher profits. Direct costs average about 15 percent, so most of a small coffee shop's expenditures go toward overhead expenses. Building sales volume makes a small cafe more profitable. Gross Margin vs. Operating Income The average gross margin in the coffee industry is high, yet the average operating income, or profit, for small cafes tends to be low. This apparent contradiction points to the high price of operating expenses other than cost of goods sold. Direct costs consist of the price of coffee and cups, along with the labor that goes directly into producing the food and drinks you sell. The other expenses that winnow average profits down to just 2.5 percent include rent, advertising, utilities and supplies. These expenses are fixed costs, that is, their total price tag doesn't really vary relative to how much product you sell. Because the overall cost of these expenses remains fairly consistent, the cost per unit diminishes as you produce and sell more units. In other words, the coffee industry benefits tremendously from economies of scale, which explains why the biggest players make the lion's share of the profit. Average Coffee Prices The average price for an espresso-based coffee drink is $3.45 in 2018, and the average price for a cup of brewed coffee is $2.38. Compare this with the restaurant industry, where prices can run $10 to $15 per menu item, even at a relatively inexpensive spot. To make a living at a small cafe you need to sell many more cups of coffee than the number of meals you would have to sell to bring in comparable revenue at a small restaurant. You can increase the size of each ticket by offering baked goods and some other foods that can be served quickly and easily. But make sure the coffee you serve is high quality, because it's likely to be your cafe's main draw. Increasing Cafe Profits In addition to increasing your sales volume so your fixed costs are averaged over a greater number of sales, you can make your cafe more profitable by keeping costs under control. Schedule enough workers for your busiest shifts, but keep fewer workers on the floor during slow times. Fine-tune your brewing so there's less coffee to throw away at the end of the day. Search far and wide for the best prices you can find on everything from cups to tables. Keep scrupulous bookkeeping records and glean as much information as possible from them. Source: Small Business Chron COFFEE STORE FRANCHISES INDUSTRY IN USA

The Coffee Store Franchises industry has experienced strong growth over the five years to 2019 as the franchise model has become a popular way for large chains to increase their store footprint with relatively low capital investment. Dunkin', part of Dunkin' Brands Inc., the industry's largest player, has added more than 1,500 stores over the past five years, expanding into states where it is underrepresented relative to its traditional stronghold in the Northeast. Increased consumer spending in the United States has been bolstered by rising levels of consumer confidence and per capita disposable income, leading individuals to spend more on small luxuries including specialty coffee. Industry revenue is expected to grow at an annualized rate of 5.9%. Younger consumers driving growth in specialty coffee, cold brew and deepening digital interaction Industry leaders surveyed by World Coffee Portal cited growth in specialty coffee as the most important consumer trend currently affecting the US coffee shop market. More than 80% identified cold brew as the fastest growing product in coffee shops. These product trends are heavily influenced by under-30s consumers, who are more willing to try new products than older demographics. This age group is also most likely to have significantly increased coffee shop visitation over the last 12 months, making them a key demographic for sales growth. Young people are embracing technology such as mobile apps and online ordering. This trend is evident in the growing adoption of third-part digital delivery platforms, such as DoorDash, UberEats, and Grubhub by major chains including Starbucks, Dunkin’, and Panera Bread. The influence of younger consumers using social media is also evident, with industry leaders citing social media advertising as the most effective form of marketing for coffees shops. Major chains tighten grip on the market Starbucks is by far the largest coffee chain in the US, retaining a 40% share of the total coffee shop market with 14,875 outlets and adding 585 net new stores over the last 12 months. Dunkin’ remains the second largest branded coffee chain with 9,570 outlets, opening 309 net new stores to achieve a 26% market share. The two market leaders accounted for 80% of new US store openings during the last 12 months. German-owned conglomerate JAB Holdings continues to exert significant market influence, operating a total of 4,739 outlets across 15 prominent brands including Panera Bread, Peet’s Coffee and Caribou Coffee. Collectively, Starbucks, Dunkin’ and JAB Holdings-owned brands comprise 78% of the US branded coffee shop segment, a collective increase of 899 outlets compared with 12 months ago.

Coffee Store Franchises in the US industry statistics

Biggest companies in the Coffee Store Franchises industry in the US

The companies holding the largest market share in the Coffee Store Franchises industry include Dunkin' Brands Inc. and Tim Hortons Inc. Source: IBIS Coffee Store Franchises in the US Market Size 2010 –2020

$12.7bn - Coffee Store Franchises in the US Market Size in 2020 2.3% - Coffee Store Franchises in the US Market Size Growth in 2020 4.4% - Coffee Store Franchises in the US Annualized Market Size Growth 2015–2020

Questions Clients Ask About This Industry • What is the market size of the Coffee Store Franchises industry in the US in 2020? - The market size, measured by revenue, of the Coffee Store Franchises industry is $12.7bn in 2020.

• What is the growth rate of the Coffee Store Franchises industry in the US in 2020? - The market size of the Coffee Store Franchises industry is expected to increase 2.3% in 2020.

• Has the Coffee Store Franchises industry in the US grown or declined over the past 5 years? - The market size of the Coffee Store Franchises industry in the US has grown 4.4% per year on average between 2015 and 2020.

• How has the Coffee Store Franchises industry in the US performed compared with the Business Franchises sector in the US? - The market size of the Coffee Store Franchises industry in the US increased faster than the Business Franchises sector overall.

• What factors affect growth of the Coffee Store Franchises industry in the US? - The primary negative factors affecting this industry are high competition and low barriers to entry.

• What is the biggest opportunity for growth in the Coffee Store Franchises industry in the US? - Factors that influence consumer spending affect the industry. During a recession, the spike in unemployment generally leads to declines in consumption. Conversely, when the economy is strong, consumers are more likely to spend money on discretionary purchases such as drinks and snacks at coffee shops. Consumer spending is expected to increase in 2019, providing a potential opportunity for the industry. • How has the Coffee Store Franchises industry performed compared with other US industries over the past five years? - The market size of the Coffee Store Franchises industry in the US increased faster than the economy overall. Source: IBIS Coffee Store Franchises Businesses 2010 – 2020

10,992 - Coffee Store Franchises Businesses in the US in 2020 3.4% - Coffee Store Franchises in the US Business Growth in 2020 3.5% - Coffee Store Franchises in the US Annualized Business Growth 2015–2020

Questions Clients Ask About This Industry

• How many businesses are there in the Coffee Store Franchises industry in the US in 2020? - There are 10,992 Coffee Store Franchises businesses in the US as of 2020.

• What is the business growth in the Coffee Store Franchises industry in the US in 2020? - The number of businesses in the Coffee Store Franchises industry is expected to grow 3.4% in 2020.

• Has the number of Coffee Store Franchises businesses in the US grown or declined over the past 5 years? - The number of businesses in the Coffee Store Franchises industry has grown 3.5% per year on average over the five years between 2015 - 2020.

• Which States have the highest number of businesses in the Coffee Store Franchises industry in the United States? - Alabama, Alaska and Arizona are the States with the most number of Coffee Store Franchises businesses in the US. • Does the Coffee Store Franchises industry in the US require significant investment in equipment? - The Coffee Store Franchises industry relies on both capital (plant, machinery and equipment) and labor to similar degrees.

• What companies have the highest market share in the Coffee Store Franchises industry in the US? - The Coffee Store Franchises industry has high market share concentration and the largest business is Dunkin' Brands.

• What region has the highest number of businesses in the Coffee Store Franchises industry in the US? - The Southeast region of the United States accounts for the largest share of Coffee Store Franchises business locations. Source: IBIS Coffee Store Franchises Employment Statistics

Source: IBIS Coffee Store Franchises Wage Statistics 2010 –2020

$3.0bn - Coffee Store Franchises Wages in the US in 2020 3% - Coffee Store Franchises in the US Wage Growth in 2020 4.6% - Coffee Store Franchises in the US Annualized Wage Growth 2015–2020 Questions Clients Ask About This Industry

• What are total wages in the Coffee Store Franchises industry in the US in 2020? - The Coffee Store Franchises industry pays total wages of $3.0bn in 2020.

• What is the total wage growth in the Coffee Store Franchises industry in the US in 2020? - Total wages paid by the Coffee Store Franchises industry is expected to increase 3% in 2020, to $3.0bn.

• Have wages grown or declined in the Coffee Store Franchises industry in the US over the past 5 years? - Total wages paid by the Coffee Store Franchises industry increased 4.6% per year on average over the five years between 2015 and 2020.

• What is the average wage in the Coffee Store Franchises industry in the US in 2020? - The average wage per employee in the Coffee Store Franchises industry is $173k in 2020. Source: IBIS

COFFEE BEANS MARKET

According to Allied research, the Global Coffee Beans Market size was valued at $10,471 million in 2017 and is likely to reach $15,635 million at a CAGR of 6.1% during the forecast period. The demand for coffee beans in Asia-Pacific has grown significantly over the years, owing to increase in its consumption. Japan, India, and Philippines are the major contributors to its growth. Global Coffee Beans market is expected to reach $15,635 millions in 2024, Growing at a CAGR of 6.1% (2018-2024) The global coffee beans market growth is driven by increase in coffee consumption among consumers. In addition, health benefits associated with coffee and expansion of retail market makes the buying process easy for the consumers, which boost the global coffee beans market. Moreover, decrease in consumption of carbonated drinks has supplemented the coffee beans market growth. However, availability of tea is projected to restrain the global coffee beans market.

These beans are more resistant to pests and diseases and are widely produced in Vietnam. Robusta is likely to grow at the fastest rate because of its high caffeine content and strong properties as blends. These beans are comparatively small, rounded, and brownish yellow in color. Robusta beans are typically used in instant coffee, espresso, and as a filler in ground coffee blends.

The usage of coffee beans in the pharmaceutical industry is augmenting the global coffee beans market. The health- benefits that are associated with coffee beans in the form of dietary supplements have increased its consumption. The green coffee beans extract has a higher level of chlorogenic acid as compared to other roasted and regular coffee beans, as these beans are not roasted. Thus, the adoption of green coffee beans in the form of weight loss supplements has been widely observed among consumers.

LAMEA is one of the emerging regions in terms of coffee

consumption, as Brazil, South Africa, Saudi Arabia, and Turkey offer potential opportunities for the coffee beans market. New product offerings and flavor differentiation are the key strategies adopted by manufacturers to increase their market share. Furthermore, manufacturers have introduced promotional pricing strategies to increase their sales. Moreover, introduction of appealing packages and new flavors combined with campaigns through social events and networks fuel the growth of the global coffee beans market. The key players operating in the coffee beans industry include Kicking Horse Whole Beans, Death Wish Coffee, La Colombe Corsica Blend, Caribou Coffee, Luigi Lavazza S.P.A., Illycaff S.p.A., Hawaiian Isles Kona Coffee Company, Ltd., La Colombe Torrefaction, INC., Peets Coffee & Tea, Inc., Coffee Beans International, Inc. The European consumers prefer high-value specialty coffee that offer a unique experience and are knowledgeable about coffee varieties. In addition, increase in health consciousness of the young population boosts the adoption of black coffee, which drives the market growth. This further offers opportunities for coffee beans suppliers to provide unique blends, flavors, and ready-to-drink coffee. Key Findings of the Coffee Beans Market:

• In terms of value, the arabica caf beans generated the maximum revenue in 2017 and is expected to grow at a CAGR of 5.5% during the forecast period. • The pharmaceutical industry is likely to grow at the fastest rate at a CAGR of 6.9% by 2024. • Europe is expected to dominate the market, registering the CAGR of 5.4% in terms of value. • Asia-Pacific is projected to show exponential growth in demand throughout 2024, growing at a CAGR 7.6% of in terms of value. • India and China are expected to witness considerably high growth rates at a CAGR of 10.9% and 9.0% respectively, during the forecast period. Source: Allied Research

According to Grandview Research, The global coffee beans market size was valued at USD 27.0 billion and is expected to expand at a CAGR of 6.7% from 2019 to 2025. Increasing penetration of franchise outlets such as CCD and Starbucks in India, China, and other countries is a main factor anticipated to drive the market over the forecast period. Demand for coffee beans is expected to witness significant growth owing to increasing application of such beans in various sectors including pharmaceuticals, cosmetics, and food and beverages. Coffee is gaining popularity among the young population, especially in India and China. Owing to growing popularity, various franchise retailers are entering these markets to meet consumer demand. India has more than 1,400 registered cafés. In China, Starbucks alone has more than 1,500 outlets. The number of cafes are expected to increase in coming years, which is expected to fuel demand for robusta and arabica beans These types of beans help in preventing certain type of diabetes, skin cancer, and heart diseases, as well as help in improving immune system. Growing awareness related to health benefits of these beans has resulted in increase in consumption among the diabetic population as it helps in reducing the risk of diabetes type 2. This, in turn, is expected to fuel demand for coffee beans over the forecast period. Arabica and robusta beans are widely used owing to their caffeine content. Robusta contains 2.7% caffeine, which is almost double of 1.5% of arabica. In addition, arabica type is pleasant in taste and contains almost 60% lipid and almost twice concentration of sugar than robusta owing to which people prefer arabica over robusta. More than 60% coffee cultivation is arabica, where Brazil is one of the leading producers in the world. Arabica has higher acidity than robusta, which adds a fruity, chocolate, and nutty flavor of the beans. Product Insights

Arabica was the largest segment, accounting for 61.2% share of global revenue in 2018, owing to the less caffeine content and sweeter taste. Increase in the penetration of cafes in developing countries, coupled with surge in use of arabica beans in chocolates, nuts, and caramels, is expected to have a positive impact on the market growth. Robusta is expected to be the fastest growing market with a CAGR of 7.4% during the forecast period. These beans are strong and bold in taste and have a chocolaty flavor that linger on pleasantly in the mouth. Moreover, these beans are rich in caffeine content, which has a direct effect on brain. The caffeine replaces adenosine, which stimulates brain and makes you active and alert. This, in turn, is expected to gain popularity among the working population over the forecast period. In addition, these beans are a rich source of natural antioxidants, which act as natural anti-inflammatory agents. Moreover, they help in reducing the risk of various diseases including Alzheimer and Gallbladder stones, and promoting weight loss. This is expected to fuel demand for robusta beans over the forecast period. Application Insights

Food and beverages emerged the largest segment, accounting for more than 70.0% share in 2018. Increase in consumption of coffee, coupled with coffee flavored beverages, is expected to drive demand for coffee beans over the forecast period. These beans are used in cakes, cookies, and muffins, which is expected to have a positive impact on the market growth. Espresso flavor is gaining popularity in the food and beverages segment owing to its strong and bold taste. In addition, this flavor is widely used in cakes, cookies, and various dietary supplements owing to its high caffeine content. Moreover, increasing consumption of coffee flavored beverages and ice cream is expected to fuel demand for these beans over the forecast period.

The pharmaceuticals segment is estimated to be the fastest growing segment, expanding at a CAGR of 10.3% over the forecast period. Increase in awareness related to health benefits is a key factor driving the segment over the forecast period. For instance, green coffee beans are consumed to reduce weight and improve metabolism. Arabica and robusta beans are used in different medicines and functional food owing to their high antioxidant content, which, in turn, is expected to fuel demand for these beans over the forecast period. The cosmetics segment is expected to witness growth in the coming years due to increasing use of coffee beans in different personal care products such as facewash, scrubs, and lipsticks. Coffee extract provides prolong moisturizing effect and helps to remove sun tan. Therefore, extracts are blend with lip balms, moisturizer, and different face creams. Increasing demand for moisturizer, facewash, lip balm, and lotion is expected to fuel demand for coffee beans Regional Insights

North America was the largest market with a share of 29.2% in 2018 due to high consumption of coffee brew. Growing demand for coffee vending machines at railway stations, airports, offices, and other places and increasing demand from the working population are anticipated to make a reasonable contribution to the market revenue. Furthermore, increase in the number of coffee shops in Canada and U.S. is expected to fuel demand for coffee beans over the forecast period. MEA is estimated to expand at the fastest CAGR of 9.9% over the forecast period owing to increasing consumption of coffee. Moreover, penetration of various pharmaceutical companies such as Novartis and Allergan is expected to fuel demand for coffee beans over the forecast period. Asia Pacific is expected to witness significant growth during the forecast period due to rising disposable income, coupled with coffee consumption. Growing popularity of coffee among the young population and increasing number of cafes are expected to provide growth opportunity for coffee beans in the region. Coffee Beans Market Share Insights

The global market is highly competitive in nature. Some of the major players in the market are Kicking Horse Whole Beans; Death Wish Coffee; The Coffee Beans Co.; La Colombe Torrefaction, INC.; Coffee Beans International, Inc.; illycaff S.p.A.; Luigi Lavazza S.P.A.; La Colombe Torrefaction, INC.; Hawaiian Isles Kona Coffee Company, Ltd.; and Peets Coffee & Tea, Inc. The manufacturers are focusing on launching different flavors and new products to increase their market share. Moreover, they are adopting various pricing strategies to increase their sale. Introduction of new flavors and appealing packages, together with campaigns through networks and social media, are anticipated to increase the growth of the global market in the coming years. • By product, arabica dominated the global market with an overall revenue share of 61.2% in 2018. Robusta is anticipated to ascend at a CAGR of 7.4% over the forecast period • The food and beverages application segment held the largest share of more than 70.0% in 2018 owing to increasing number of coffee retail outlets in developing countries such as India and China • North America dominated the global market in 2018, accounting for 29.2% share of the overall revenue. This trend is projected to continue over the next few years • Middle East and Africa is anticipated to be the fastest growing market with a CAGR of 9.9% during the forecast period Source: Grandview Research

BEST COFFEE CITIES IN AMERICA

Coffee first became popular in the U.S. after the Boston Tea Party, when the switch was seen as “patriotic,” according to PBS. And since Starbucks debuted in 1971, the drink is now accessible almost anywhere you go. In a recent Reuters poll, sixty-three percent of Americans age 18 or older said they drank coffee the previous day. What gave way to java culture? Science, for one, has convinced us that caffeine possesses multiple health benefits besides mental stimulation. At the right dosages, caffeine may contribute to longevity. Perhaps just as important, though, is coffee’s social purpose. Today, coffee stations are a staple of the workplace, and tens of thousands of shops serve as meeting places for friends, dates and coworkers. The creation of these drinks has grown increasingly professional, too. Being a barista has become less a part-time job than a career field. Latte art has even inspired a national competition. But some local coffee scenes are stronger than others. To determine the best among them, WalletHub compared the 100 largest cities across 14 key indicators of coffee lover- friendliness.

Infographics: Best Coffee Cities in America

Source: Coffeebi

Coffee Shops Nationwide

Source: e-Importz

Source: SCA Coffee Source

Source

Ranking of USA states based of Coffee Shops

Source: WalletHub

These Cities Have the Most Coffee Shops Per Person

10. Ann Arbor, MI — one for every 2,825 people 9. Everett, WA — one for every 2,752 people 8. Pittsburgh, PA — one for every 2,607 people 7. Minneapolis, MN — one for every 2,427 people 6. Salt Lake City, UT — one for every 2,387 people 5. Portland, OR — one for every 2,322 people 4. Seattle, WA — one for every 2,308 people 3. San Francisco, CA — one for every 2,297 people 2. Vancouver, WA — one for every 2,224 people 1. Berkeley, CA — one for every 2,073 people Source