Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- The challenge of a recession
- Starbucks drags down overall sales, but broader picture not bright either
- Value pricing will dictate the near future
- Competition growing for the coffee and snack or meal
- 18-34 year olds are an essential demographic
- Social Networking (SN): A free brand propulsion tool
- Innovation driven by value and variety
- Advertising and promotional activity
- Coffee and coffee drinks usage
- Coffeehouse and donut shop usage
- Coffee and coffee drink spending trends and rationales
- Coffeehouse and donut shop drinks drunk most often
- How coffeehouses are used
- What coffeehouse patrons would like to see more of
Insights and Opportunities
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- Key points
- Price incentives: Now more than ever
- The issue
- Targeting younger customers is essential
- The key strategy is providing cost incentives
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- Figure 1: Incentives to dine at restaurants, by age, November 2008
- A look to Dunkin’ Donuts provides some cues:
- Making the most of technology
- The tool: Social networking
- The tool: Online reviews
- The tool: Mobile technology
- Afternoon delight
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- Figure 2: How coffeehouses are used, February 2009
Competitive Context
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- Key points
- Consumers walk out on coffeehouses
- Takeaway
- The bottom line
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- Figure 3: Coffeehouse and donut shop coffee-spending rationales, February 2009
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- Figure 4: Coffeehouse and donut shop coffee-spending trends, February 2009
- The economic challenge
- Value-driven solutions
- QSR specter looms large; McDonald’s McCafé a game changer
- No one wants to deal with an 800-pound gorilla
- Broader value proposition
- Breakfast pressure
- Extended hours
- Variety
- Fast casual restaurants compete on healthfulness and brand cachet
- For healthier options…
- For sampling…
- Work and office: A blending of the “second” and “third” spaces
- Takeaway
- Workers rely more on office coffee service
Inspire Insights
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- Simplicity and Convenience
- What's it about?
- What we've seen: too much choice; too much juggling
- Specifics: QSR (coffeehouse) plays major role
- Application: cutting through the clutter
- Bottom line: A comprehensive plan for simplicity
Market Size and Forecast
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- Key points
- An unfortunate truth: negative sales estimated for 2009
- Starbucks drags down overall sales
- But broader picture not bright either
- Value pricing will dictate the near future
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- Figure 5: U.S. systemwide sales of coffeehouses and donut shops, 2006 and 2008
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- Figure 6: U.S. systemwide sales of top coffeehouses and donut shops, at current prices, 2005-11*
- Figure 7: U.S. systemwide sales of top coffeehouses and donut shops, at inflation-adjusted prices, 2005-11*
Segment Performance
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- Key points
- Coffeehouses
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- Figure 8: U.S. retail coffeehouse sales at top three chains, 2006 and 2008
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- Figure 9: U.S. retail coffeehouse units at top three chains, 2006 and 2008
- Figure 10: U.S. retail coffeehouse sales per unit, top three chains, 2006 and 2008
- Donut shops
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- Figure 11: U.S. retail donut shop sales at top three chains, 2006 and 2008
- Figure 12: U.S. retail donut shop units at top three chains, 2006 and 2008
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- Figure 13: U.S. retail donut shop sales per unit, top three chains, 2006 and 2008
Market Drivers
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- Key points
- Recession hits restaurant industry
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- Figure 14: Restaurant Performance Index, current situation, and expectations, November 2007-February 2009
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- Figure 15: Coffeehouse and donut shop coffee-spending trends, February 2009
- Consumer confidence undermines willingness to spend at restaurants
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- Figure 16: Consumer sentiment index, 2001-08
- Is that light at the end of the tunnel?
- 18-34 year olds: A force to be reckoned with
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- Figure 17: Population aged 18 or older, 2004-14
Restaurant Analysis
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- Key points
- Starbucks navigates a (very) rough patch
- Current struggles
- Plan for the future
- Breathing life into the brand
- What’s on the menu
- Core demographic profile remains steady
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- Figure 18: Starbucks demographic profile, 2007 and 2008
- Dunkin’ Donuts
- Store format innovation
- Going retro
- What’s on the menu
- The demographic connection
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- Figure 19: Dunkin’ Donuts demographic profile, 2007 and 2008
- Tim Hortons
- The basics
- Growth through expansion
- On the menu
- Tully’s
Analysis: The Independent Coffeehouse
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- Intelligentsia continues to ride the “Third Wave”
- Bridgeport Coffee Company: A true neighborhood independent
Restaurant Brand Qualities
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- Key points
- Social networking as a brand propulsion tool
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- Figure 20: Viral marketing on social networking sites, October 2008
- Dunkin’ Donuts
- Starbucks
Innovation and Innovators
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- Key points
- Spinning value
- Rewarding the regulars
- Cross-pollinating beverages
- Starbucks works to shed its “evil of excess” image
- Healthy menu choices arrive
Advertising and Promotion
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- Key points
- Everybody loves to pick on Starbucks
- PJs: Starbucks isn’t local
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- Figure 21: PJs local positioning, 2009
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- Figure 22: PJs: roasted locally, 2009
- Dunkin’ Donuts: Highlighting bargains
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- Figure 23: Dunkin’ Donuts value breakfast, 2009
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- Figure 24: Dunkin’ Donuts: Dunkin’ Deals, 2009
- Figure 25: Dunkin’ Donuts LTO, 2009
- Starbucks: “Do-gooders”
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- Figure 26: Starbucks: “What if?,” 2008
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- Figure 27: Starbucks: “What if?” Africa, 2009
- Figure 28: Starbucks, volunteering, 2009
Coffee and Coffee Drinks Usage
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- Key points
- Bring more than coffee to the table to target 18-34 year olds
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- Figure 29: Coffee and coffee drink usage, by selected demographics, February 2009
Coffeehouse and Donut Shop Usage
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- Key points
- Purchased drinks
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- Figure 30: Purchased drinks at coffeehouses and donut shops in past month, by age, February 2009
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- Figure 31: Mean purchases of drinks at coffeehouses and donut shops in past month, by age, February 2009
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- Figure 32: Purchased drinks at coffeehouses and donut shops in past month, by household income, February 2009
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- Figure 33: Mean purchase of drinks at coffeehouses and donut shops in past month, by household income, February 2009
- Purchased food
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- Figure 34: Purchased food at coffeehouses and donut shops in past month, by age, February 2009
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- Figure 35: Mean purchase of food at coffeehouses and donut shops in past month, by age, February 2009
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- Figure 36: Purchased food at coffeehouses and donut shops in past month, by household income, February 2009
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- Figure 37: Mean purchases of food at coffeehouses and donut shops in past month, by household income, February 2009
Coffee & Coffee Drink Spending Trends and Rationales
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- Key points
- Spending trends point downward
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- Figure 38: Coffeehouse and donut shop coffee-spending trends, February 2009
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- Figure 39: Coffeehouse and donut shop coffee-spending trends, by age, February 2009
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- Figure 40: Coffeehouse and donut shop coffee-spending trends, by household income, February 2009
- Spending rationales show lure of home
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- Figure 41: Coffeehouse and donut shop coffee-spending rationales, February 2009
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- Figure 42: Coffeehouse and donut shop coffee-spending rationales, by age, February 2009
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- Figure 43: Coffeehouse and donut shop coffee-spending rationales, by region, February 2009
Coffeehouse and Donut Shop Drinks Drunk Most Often
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- Key points
- Hot coffee the most popular drink
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- Figure 44: Coffeehouse and donut shop drinks drunk most often, February 2009
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- Figure 45: Coffeehouse and donut shop drinks drunk most often, by age, February 2009
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- Figure 46: Coffeehouse and donut shop drinks drunk most often, by region, February 2009
How Coffeehouses Are Used
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- Key points
- “Grab and go” remains the leading choice
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- Figure 47: How coffeehouses are used, April 2008 and February 2009
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- Figure 48: How coffeehouses are used, by age, February 2009
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- Figure 49: How coffeehouses are used, by HH income, February 2009
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- Figure 50: How coffeehouses are used, by region, February 2009
What Coffeehouse Patrons Would Like to See More Of
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- Key points
- Food enhancements and coffee variety top the most wanted list
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- Figure 51: What coffeehouse patrons would like to see more of, February 2009
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- Figure 52: What coffeehouse patrons would like to see more of, by gender, February 2009
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- Figure 53: What coffeehouse patrons would like to see more of, by age, February 2009
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- Figure 54: What coffeehouse patrons would like to see more of, by region, February 2009
Custom Consumer Groups: Brand Associations
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- Favorite coffeehouse/donut shop brand, by health/indulgence preference
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- Figure 55: Favorite coffeehouse/donut shop brand, by health and indulgence preference, February 2009
- Favorite coffeehouse/donut shop brand, by on-the-go lifestyle preference
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- Figure 56: Favorite coffeehouse/donut shop brand, by on-the-go lifestyle preference, February 2009
- Appendix: Methodology
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- Figure 57: Lifestyle attitudes, February 2009
Custom Consumer Groups: Spending Rationales
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- Figure 58: Coffee cost saving and convenience factors, by healthfulness and on-the-go lifestyle, February 2009
- Appendix: Methodology
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- Figure 59: Lifestyle attitudes, February 2009
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Cluster Analysis
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- Menu-unenthusiasts
- Opportunity
- Who they are
- Starbucks and other coffeehouse chain averse
- Opportunity
- Who they are
- Frequent eat and drink relaxers
- Opportunity
- Who they are
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- Figure 60: Coffeehouse drinker clusters, February 2009
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- Figure 61: Lifestyle attitudes, by coffeehouse drinker clusters, February 2009
- Figure 62: Purchased drinks at coffeehouses and donut shops in past month, by coffeehouse drinker clusters, February 2009
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- Figure 63: Purchased food at coffeehouses and donut shops in past month, by coffeehouse drinker clusters, February 2009
- Figure 64: Coffeehouse and donut shop coffee-spending trends, by coffeehouse drinker clusters, February 2009
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- Figure 65: Coffeehouse and donut shop coffee-spending rationales, by coffeehouse drinker clusters, February 2009
- Figure 66: What coffeehouse patrons would like to see more of, by coffeehouse drinker clusters, February 2009
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- Figure 67: How coffeehouses are used, by coffeehouse drinker clusters, February 2009
- Figure 68: Coffeehouse drinker clusters, by gender, February 2009
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- Figure 69: Coffeehouse drinker clusters, by age group, February 2009
- Figure 70: Coffeehouse drinker clusters, by income group, February 2009
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- Figure 71: Coffeehouse drinker clusters, by race, February 2009
- Figure 72: Coffeehouse drinker clusters, by Hispanic origin, February 2009
Appendix: Trade Associations
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