Dive Brief:
- Traffic rose 4% at gourmet coffee and tea QSRs and climbed 3% at doughnut shops in September compared to a year ago, according to a Circana report emailed to Restaurant Dive.
- Case sales at broadline distributors for quick-service gourmet coffee and tea shops were up 15% in September compared to the year-ago period, suggesting growth in consumer demand.
- This uptick in traffic and sales suggests more consumers are buying on-the-go beverages and snacks as they return to the office and rediscover their morning routines, David Portalitan, SVP and industry advisor, food and foodservice at Circana, said in a statement.
Dive Insight:
Demand for coffee and tea QSRs has also sparked category development. This segment added 3,500 units in March 2023 compared to March 2022, according to Circana’s data. Several chains, including Biggby, Caribou Coffee, Shipley Do-Nuts and Scooter’s Coffee, are aggressively expanding into new markets and are seeking new franchisees.
“With a rising number of employees returning to the office post-pandemic and the transition to the fall season, gourmet coffee, tea, and donuts offer a small sense of indulgence and convenience for busy consumers,” Portalitan said in a statement.
Forty-seven percent of consumers purchased pumpkin-flavored drinks during September, per Circana data. Chains are increasingly pushing pumpkin drinks in mid-August to maximize diner interest in these specialty offerings. Pumpkin spice lattes drove a 25.1% increase in traffic at Starbucks during the last week of August, compared to the previous periods in past years.
It’s not just seasonal drinks that are helping drive category traffic, either. Energy drink purchases are also on the rise — coffee and tea QSRs boasted a 55% increase in energy drink purchases the past three months ending in September compared to the year-ago period, per Circana.
Some coffee chains are growing their roster of food items, as well, to encourage visits. Starbucks plans to improve its food offerings across dayparts, for example. For FY 2023, the company said half of its $6 billion in food sales came from the company’s all-day breakfast offerings, which include sous vide egg bites, breakfast sandwiches and breakfast wraps. The company plans to add all-day snacking platforms and more fresh baked items in the future.
Strategies like this, and the boost in morning drink sales, could inform other QSRs on how to optimize their morning daypart offerings. Breakfast helped offset the impact of traffic declines related to pricing at Wendy’s last quarter, for example. Wendy’s added a frosty cream cold brew to its menu in July and English muffin sandwiches to its menu in August.
