Krispy Kreme and Peet’s Coffee & Tea Consumer Favorites In Market Force Coffee and Snack Chain Study

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Study reveals room for more growth in coffee and snack restaurants, with lower usage and new trial rates than other restaurant types

"Krispy Kreme outscored competing coffee shops and snack chains on eight of 10 attributes, including taste"

There is substantial growth potential in the coffeehouse and snack chain segments, according to a new Restaurant Outlook survey conducted by Market Force Information, a worldwide leader in customer intelligence and customer experience management solutions. The survey looked at consumer preferences and trends as they relate to patronizing coffeehouses and/or snack restaurants – businesses such as Starbucks, Dunkin’ Donuts and even McCafé, McDonald’s coffeehouse chain

According to the survey, most consumers visit a coffee shop around once a week, with 70% reporting that they go to coffeehouses or snack restaurants less than five times a month. That came as a surprise considering the popularity of coffee among all types of consumers these days. Many reported that they use time at a coffee or snack restaurant to reflect, or as an escape. That, coupled with the fact that just 4% of consumers reported trying a new coffeehouse or snack restaurant in the last 30 days, indicates big room for growth for chains that can entice consumers in the door.

Playing Favorites
When asked which coffeehouse or snack restaurants were their favorites, Starbucks was cited by 36%, decidedly more than any other restaurant or coffeehouse. Dunkin’ Donuts (28%) and Krispy Kreme (16%) ranked second and third, respectively, followed by Tim Hortons, Caribou Coffee, Seattle’s Best, McCafé, Peet’s Coffee & Tea, and The Coffee Bean and Tea Leaf. See Graph 1.

However, when the number of locations is factored into the results, Krispy Kreme wins by a mile – earning 35% of the vote. See Graph 2. And, when just coffeehouses are considered (with snack restaurants such as Krispy Kreme removed from the equation), Peet’s Coffee & Tea and Caribou Coffee stand out as favorites. Even though Starbucks seems to be synonymous with coffee, it falls all the way to the bottom of the rankings — just above McCafé — when the results are indexed by number of stores. The chain’s sheer number of locations seemed to dilute all of the votes for Starbucks.

Taste Outweighs All Other Factors
So Krispy Kreme has a cult following—who doesn’t love their doughnuts? But are their doughnuts the reason why the restaurant is so adored by consumers? In a word, yes. It’s all about the quality and taste of the food—especially taste, as the survey uncovered. Krispy Kreme outscored competing coffee shops and snack chains on eight of 10 attributes (attributes included Quality of Food, Taste of Food/Coffee, Speed of Service, Friendly Service, Cleanliness, Atmosphere, Accommodating, Overall Value, Healthy Choices, Green/Sustainability) and was off the charts for taste. All other competitors clustered together with virtually no differentiation. See Graph 3.

Consumers View Coffeehouses as an Escape
Coffeehouses/snack restaurants differ from two other categories that were also examined in this survey – quick-service restaurants (QSR) and casual dining establishments. This category is strikingly different from the others on two fronts. First, it had much fewer new trials. Only 4% of consumers said they tried a new national or regional brand in the last 30 days, whereas one in three tried a new QSR during that period. Second, this category had the most consumers who said they visited the establishment because they were seeking some alone time. That has some great implications for marketing around factors such as stress relief, time out and indulgence.

The desire to be with friends was not a hugely popular reason for consumers frequenting coffeehouses, with only 18% citing it. Instead, 42% say they go there when they are pressed for time. Visiting a coffeehouse/snack restaurant appears to be more “all about me.” When consumers need some time alone, are in a hurry, too tired to cook, etc., the coffeehouse/snack restaurant is the immediate answer. See Graph 4.

Coffee Drinkers Stimulated to Try Starbucks
Only 4% of consumers said they tried a new national or regional coffeehouse/snack restaurant in the last 30 days. Of those, 38% are experimenters who said they tried more than one. So which brands fared the best among that group? Here is where Starbucks rose to the top, with more consumers (16%) saying they tried a Starbucks for the first time more than any other coffee or snack shop. It is intriguing that an established brand like Starbucks would still be experiencing so many new trials.

Unlike with QSRs and casual dining establishments, recommendations from friends is less important in driving new trials than driving by the location—perhaps because this category represents that need for alone time for consumers. Traditional advertising drives few trials, and promotions drove about 11%, which is on the order of what was found with QSR and casual dining trials.

The study also found that seven in 10 new trials delivered on their promise. About two-thirds of consumers reported having a “GREAT” experience at a new coffeehouse or snack restaurant. The remaining one third of new trial experiences either were rated either just “OK” or “BAD.” So, the opportunity to delight new customers exists in this category and can make the difference between true growth for a brand and just maintaining the status quo.

The survey was conducted in May and June 2010 among the Market Force network of more than 300,000 independent mystery shoppers and merchandisers – consumers across the country dubbed The Force™. The pool of 4,600 respondents ranged in age from 18 – 72 and reflected a broad spectrum of income levels, with 60% reporting incomes of more than $50,000 a year. Eighty percent work full or part time. Seventy-six percent were women – the primary household consumer purchasers. Half of the participants said they have children at home.

About Market Force Information
Market Force Information Inc. is the leading global customer intelligence solutions company for business-to-consumer companies including major retailers, restaurants, grocery and convenience stores, financial institutions, entertainment studios and consumer packaged goods companies. Market Force Information has pioneered the industry with a suite of customer intelligence solutions that provide clients with the business intelligence they need to delight their customers and drive bottom-line results. The company measures store-level operations and customer attitudes through mystery shopping, customer feedback, market audits and merchandising services, with the analytics to drive targeted improvements. For more information, please visit: and follow us on Twitter @MarketForce

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Rebecca Scanlan
GroundFloor Media for Market Force
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