Los Angeles, CA (PRWEB) June 14, 2012
After surging over the past decade, the Coffee and Snack Shops industry experienced a major slowdown in 2009 due to a struggling economy and, to a lesser extent, changing consumer tastes. Over the five years to 2012, IBISWorld estimates revenue will grow at an average annual rate of 1.2% to $27.8 billion. “During the recession, consumers spent less on luxuries like eating out, and they purchased lower-priced items when they did spend,” says IBISWorld industry analyst Nima Samadi. “This caused high-priced coffee drinks and other nonessential snacks to lose the battle over people's shrinking budgets.” After revenue declined 6.6% to $25.3 billion from 2008 to 2009, it began its upward climb in 2010 and 2011, with growth of 3.0% and 3.1%, respectively. In 2012, industry revenue is expected to continue its rebound, with an increase of 3.4%.
Consumers have become increasingly health-conscious over the five years to 2012. Many retailers have responded by expanding the number of healthy options on their menus, and retailers like Jamba Juice have experienced growth due to the health benefits of their products. Still, the general trend toward healthy eating has hurt the industry's unhealthier segments, such as donut and ice cream shops. Over the past five years, industry employment has grown at a muted rate and the number of establishments is expected to increase only marginally by year-end 2012. “Given the diversity of snack and beverage styles and industry operations, it is not surprising that nearly 48.0% of establishments are small-business operators,” adds Samadi. Among the few large and dominant chain and franchised operators, Starbucks and Dunkin' Brands have considerable market power in determining industry trends. The level of concentration in the Coffee and Snack Shops industry is expected to continue increasing over the five years to 2017.
To combat slumping sales, major operators have expanded their menus to offer nontraditional, high-margin menu items like iced coffee drinks, breakfast items and healthy wraps, aiding them in their turnaround. Many major chains are also investing in international growth as part of a long-term strategy. Companies like Starbucks view China in particular as a market with huge potential for growth and long-term profitability. Over the five years to 2017, revenue is forecast to grow. For more information, visit IBISWorld’s Coffee and Snack Shops in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is composed of establishments that prepare or serve specialty snacks and nonalcoholic beverages, including ice cream, frozen yogurt, cookies, donuts, bagels, coffee, juices, smoothies or sodas. Purchases may be consumed on-site, taken out or delivered.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.