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Coffeehouses and Donut Shops - US - February 2006

INTRODUCTION AND ABBREVIATIONS
Introduction
Other reports of relevance
Definition
 ABBREVIATIONS & TERMS
Abbreviations
Terms
EXECUTIVE SUMMARY
Market continues to grow and shows no sign of slowing
Coffeehouse growth based on cultural shift toward premium coffee
Coffeehouses and donut shops dominate in different regions of the country
Dominant Starbucks leads in unit expansion and product innovation
Dunkin’ Donuts, Starbucks ramp up ad spending
Independent coffeehouses thrive for now
Increased competition for coffee sales expected from quick-service restaurant chains
Coffee quality and convenient location trump ambience
The young and young at heart utilize the coffeehouse as a hangout
Healthy growth for both coffeehouses and donut shops
MARKET DRIVERS
Coffee consumption shifts upscale and away from home
Figure 1: U.S. retail sales of coffee through FDM* and system-wide sales of coffeehouses, 2000-04
Figure 2: Consumption of specialty coffee among adults, 2000-04
Expansion in number of retail sites serves as advertising
Figure 3: Total number of U.S. coffeehouses and average annual sales per unit, 2000-05
Competition from non-specialists
Figure 4: Places coffee was drunk or bought, by geographic region, December 2005
Demographic factors
Figure 5: U.S. population, by age, 2000-10
Figure 6: U.S. population, by race and Hispanic origin, 2000-10
MARKET SIZE AND TRENDS
Figure 8: U.S. retail sales at coffeehouses and donut shops, at current and constant prices, 2000-05
Figure 9: Graph: U.S. retail sales at coffeehouses and donut shops, at current and constant prices, 2000-05*
MARKET SEGMENTATION
 OVERVIEW
Figure 10: U.S. retail sales at coffeehouses and donut shops, by segment, 2003 and 2005
Figure 11: Graph: U.S. retail sales at coffeehouses and donut shops, by segment, 2003 and 2005
Figure 12: Graph: Indexed growth, by market segment, 2000-05
Coffeehouses
Figure 13: U.S. retail sales at coffeehouses, at current and constant prices, 2000-05
Starbucks vs. all other coffeehouses
Figure 14: Estimated number of U.S. coffeehouses, 2000-05
Figure 15: U.S. retail sales of Starbucks vs. other coffeehouses, 2003 and 2005
Figure 16: Graph: Coffeehouse market share of Starbucks vs small chains & independents, 2000-05
Donut shops
Figure 17: U.S. retail sales donut shops, at current and constant prices, 2000-05
Figure 18: Number of U.S. donut shops, 2000-05
Figure 19: U.S. retail sales of Dunkin’ Donuts vs. other donut shops, 2003 and 2005
Figure 20: Graph: Donut shop market share of Dunkin’ Donuts, Krispy Kreme, and small chains & independents, 2000-05
RETAIL DISTRIBUTION
 COMPANY/BRAND SALES
Figure 21: U.S. sales of leading coffeehouse and donut shop chains, 2003 and 2005
Figure 22: Graph: U.S. system-wide sales of leading coffeehouse and donut shop chains, 2005
 COMPANY PROFILES
Starbucks
Figure 23: Total Starbucks units (including international), 1987-2005
Brand extensions
Caribou Coffee
Peet’s Coffee and Tea
Diedrich Coffee, Inc.
Coffee Beanery
Dunkin’ Donuts
Krispy Kreme
Tim Hortons
ADVERTISING AND PROMOTION
Introduction
Starbucks
Figure 24: Domestic media spend by Starbucks in dollars and as a percentage of sales, 2001-04
Dunkin’ Donuts
Figure 25: Domestic media spend by Dunkin’ Donuts in dollars and as a percentage of sales, 2001-04
Other
THE CONSUMER
 INTRODUCTION
Where coffee is bought and drunk
Figure 26: Places coffee was drunk or bought in the last month, December 2005
Figure 27: Places coffee was drunk or bought in the last month, by gender, December 2005
Figure 28: Places coffee was drunk or bought in the last month, by age, December 2005
Figure 29: Places coffee was drunk or bought in the last month, by age, December 2005
Figure 30: Places coffee was drunk or bought in the last month, by household income, December 2005
Figure 31: Places coffee was drunk or bought in the last month, by race/ethnicity, December 2005
Figure 32: Places coffee was drunk or bought in the last month, by geographic region, December 2005
Branded chains vs. independents
Figure 33: Coffeehouses and donut shops visited in the past week, and frequency of visitation in the past week, December 2005
Figure 34: Coffeehouses and donut shops visited in the past week, by gender, December 2005
Figure 35: Coffeehouses and donut shops visited in the past week, by age, December 2005
Figure 36: Coffeehouses and donut shops visited in past week, by household income, December 2005
Figure 37: Coffeehouses and donut shops visited in the past week, by race/ethnicity, December 2005
Figure 38: Coffeehouses and donut shops visited in the past week, by geographic region, December 2005
How coffeehouses are used
Figure 39: Ways that coffeehouses are used, by gender, December 2005
Figure 40: Ways that coffeehouses are used, by age, December 2005
Figure 41: Ways that coffeehouses are used, by household income, December 2005
Figure 42: Ways that coffeehouses are used, by race/ethnicity, December 2005
Figure 43: Ways that coffeehouses are used, by geographic region, December 2005
Factors influencing coffeehouse preference
Figure 44: Reasons for coffeehouse preference, by gender, December 2005
Figure 45: Reasons for coffeehouse preference, by age, December 2005
Figure 46: Reasons for coffeehouse preference, by household income, December 2005
Figure 47: Reasons for coffeehouse preference, by race/ethnicity, December 2005
Figure 48: Reasons for coffeehouse preference, by geographic region, December 2005
Attitudes toward coffeehouses
Figure 49: Attitudes toward coffeehouses, by gender, December 2005
Figure 50: Attitudes toward coffeehouses, by age, December 2005
Figure 51: Attitudes toward coffeehouses, by household income, December 2005
Figure 52: Attitudes toward coffeehouses, by race/ethnicity, December 2005
Figure 53: Attitudes toward coffeehouses, by geographic region, December 2005
Attitudes toward donut shops
Figure 54: Attitudes toward donut shops, by age, December 2005
Figure 55: Attitudes toward donut shops, by household income, December 2005
Figure 56: Attitudes toward donut shops, by race/ethnicity, December 2005
Figure 57: Attitudes toward donut shops, by geographic region, December 2005
Summary
FUTURE AND FORECAST
 FUTURE TRENDS
Starbucks’ hold on prepared coffee sales loosens
More competition from the RTD market
Pods to invigorate home brewing
Independents unite
More drive-thru, kiosks, and co-branded sites
Demographic variables
Age
Figure 58: U.S. population projections, by age, 2005 and 2010
Race/ethnicity
 MARKET FORECAST
Coffeehouses and donut shops
Figure 59: Forecast of total U.S. sales of coffeehouses and donut shops, at current and constant prices, 2005-10
Figure 60: Graph: Forecast of total U.S. sales of coffeehouses and donut shops, at current and constant prices, 2005-10*
Coffeehouses
Figure 61: Forecast of U.S. sales of coffeehouses, at current and constant prices, 2005-10
Figure 62: Graph: Forecast of U.S. sales of coffeehouses, at current and constant prices, 2005-10
Donut shops
Figure 63: Forecast of U.S. sales of donut shops, at current and constant prices, 2005-10
Figure 64: Graph: Forecast of U.S. sales of donut shops, at current and constant prices, 2005-10
Forecast Factors
APPENDIX: TRADE ASSOCIATIONS

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