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America's unquenchable thirst for premium coffee continues to drive US
coffee shop sales, with the market showing no signs of cooling down.
Latest research from MINTEL* finds coffee shops across the pond will
have seen close to a five fold increase in sales between 2000 and 2010.
The market experienced 157% growth between 2000 ($3,258m) and 2005 to
reach some $8,372m and despite being a maturing market coffee shops are
set to continue full steam ahead. Over the next five years sales are
expected to grow by a further 125% to reach an impressive $18,839m by
2010. This is phenomenal growth for such an established market and is
well over twice the growth rate seen in the much younger British coffee
shops market.
"Driven by the enormous appetite Americans have shown for more
inventive, upmarket and premium-priced coffee, coffee shop chains have
expanded at breakneck speed. The rise in popularity of this kind of
coffee has been driven mainly by the expansion of coffee shops
themselves. Every new opening increases demand by pulling in customers
who pass by while going about their daily routines and this self feeding
cycle of growth has shown no signs of slowing or market saturation,"
comments Billy Hulkower, Market Analyst at MINTEL.
The total number of coffee shops in the US increased by 70% between 2000
and 2005, bringing the total to a staggering 21, 400 or one coffee house
for every 14,000 Americans. MINTEL believes that the number of shops
could well continue to rise until there is a coffee shop for every
10,000 Americans.
Starbucks - Can it continue to have its cake and eat it?
Accounting for nearly three-quarters (73%) of the market value,
Starbucks is the clear market leader and is the driving force behind
much of the growth in this sector.
The chain's omnipresence is unprecedented. Caribou Coffee, the number
two in the market, would need 12 years at its current expansion rate to
catch up with Starbucks' current US presence, while the number of new
Starbucks stores opened in 2005 alone was greater than five times the
entire franchise of Caribou.
But despite the dominance and continued expansion of Starbucks the
coffee house craze has generated a demand for premium coffee so
significant that independent coffee shop sales have also had room to
grow at an estimated 5% year on year.
"Many independent coffee shops across America actively seek out those
locations where Starbucks operates, as it will have already done the
ground work of establishing a coffee shop culture in that area.
Starbucks' rampant expansion has created an ever increasing demand for
premium coffee, while opening the market up for competitors as well. But
Starbucks' growth remains a mixed blessing at best. The chain may be
growing the market, but it is also increasingly owning a larger market
share. So although Starbucks may afford some opportunity to others, it
still prevents independents and smaller chains from growing the market
on their own," explains Billy Hulkower.
As such, independents are unlikely to ever present any kind of threat to
Starbucks. In fact, the real competition may well come in the form of
giants such as Burger King and McDonalds, which completely dwarf the
Starbucks chain and which have already started jostling for a piece of
the coffee shop action by launching premium coffees. As Americans
already visit these restaurants on average seven times a month, they
seem perfectly placed to offer a real alternative to Starbucks.
www.mintel.com
NamNews - Wednesday 15th March 2006
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