I spend a lot of time in my local coffee shop. Mostly due to the closed door policy at my household often being construed as a “please come in and bother me” policy.The one thing that many coffee shops have in common as their naming suggest, is coffee. This may come as a surprise to many, but the product of coffee can be reproduced very easily. The same can be said about certain restaurants, though everyone knows that a Big Mac taste different than a Whopper. As we see Starbucks take on new markets throughout the world that are dynamically different from the United States, the best coffee play may be those with room to grow here at home.
Yes its easy to say that Starbucks is synonymous with coffee.That does not mean that only Starbucks will sell in America. I know Americans well and they are synonymous with lazy. If you offer me, the average lazy american, coffee at the corner I am at or the corner 5 blocks away, I will choose the former. As I mentioned above, coffee remains a interchangeable product. A cup of coffee from Starbucks can be swapped for that of a coffee cup from Dunkin’ Donuts (obviously this does not pertain to the minority of coffee enthusiasts). Just ask McDonald’s who has in the past year made leaps and bounds in the breakfast market, in particular in coffee sales, even in the frozen coffee drink sector that was thought to be owned by Starbucks. So as the success as McDonald’s and the obvious laziness of the masses suggests, ease of access prevails over branding when it comes to coffee.
Starbucks sits at the head of the class looking to expand globally. Others in the coffee industry still have room to go at home. Yes global growth has worked out well for many a company. When it comes to such a commodity as coffee the game may be different. New markets bring new challenges. I am not sitting here suggesting that Starbucks will fail in its continued expansion plans, though accessing new markets such as China and Latin America will not be an easy task as these consumers are a different beast with differing price points then their United States counterparts. For example tea rules with the caffeine heads of China which suggests that Starbucks will have to adjust its game plan extensively as it enters China. Being that Starbucks is a coffee company this movement should be a interesting ride.
As one looks for growth they can find it safely here in the United States. Some may prefer the riskier growth story, but as the global economy continues to look weak I would rather bet on American breakfast than Greece. It is to early to count out Caribou and other regional coffee shops. A portion of America runs on Dunkin’ and the potential is there for growth in an established coffee market. Starbucks is looking at growth abroad in markets that are more challenging and diverse. So to answer the above question simply, no all coffee shops are not made the same. As one bets on the future of coffee, which I will do in about 5 minutes with my second cup of the day, it is best to know where you think the most profits lay.
Photo by jennpopz