Dive Brief:
- Visits to coffee chains of all sizes are up by 29% over the past five years, according to Placer.ai data. Small and medium-sized coffee brands have seen a disproportionate benefit, however, while industry titans like Starbucks and Dunkin’ lagged.
- Small chain’s visit share rose from 3.2% in 2019 to 4.4% in 2024, while medium-sized brands, like BIGGBY Coffee and Dutch Bros, saw visit share grow from 10.8% to 17.6% in the same time.
- Starbucks and Dunkin’s combined share of coffee visits remains vast — 77.9% according to Placer.ai — and visits have increased in absolute terms. But the erosion of visit share could signal vulnerability for coffee category leaders.
Dive Insight:
Consumer behavior at stores, rather than simple visit data, also sheds light on shifts in coffee’s competitive landscape.
Visits lasting longer than 10 minutes increased 13.4% at small coffee chains from 2023 to 2024, and fell at Dunkin and Starbucks by 8.9%, according to Placer.ai’s data. Short visits and long visits increased at medium-sized brands.
“Smaller coffee shops are increasingly filling the niche of a relaxed, destination-oriented experience,” Bracha Arnold, a content writer for Placer.ai, wrote in a post analyzing the data.
This consumer shift toward smaller and medium-sized chains as coffee-oriented “third places” could help explain why Starbucks, after years of emphasis on speed and throughput, is returning its focus to in-store experience under CEO Brian Niccol. That move may be necessary to preserve the brand’s position in the market from competition from smaller, more local-feeling coffee shops.
“These shifts highlight the different needs that coffee shops can fill within a community, with some offering speed and convenience, while others can meet the desire for a relaxed and personalized coffee experience,” Arnold wrote in the report.
Arnold noted that coffee traffic growth slowed in late 2024, which could signal a plateau in consumer demand. If demand does plateau — or if tariffs increase the cost of coffee — the competition within the coffee sector for each individual consumer visit will increase.
What that means for the landscape of the coffee sector is unclear. Dunkin’ and Starbucks and competitors among the larger medium-sized brands, like Dutch Bros. and Caribou, would maintain their pricing advantages and scale. But consumers may feel an experiential coffee occasion at a smaller location gives better value for a high-priced good. Such a shift may already be underway in other restaurants, if increased emphasis on on-premise dining by many brands and operators is any indicator.
