The coffee industry is becoming increasingly varied in its approach to attracting customers. While Starbucks, the US's largest coffee chain, has expressed a desire to bring back a "coffeehouse vibe" in its stores, competitors like Dutch Bros are focusing heavily on drive-thru service efficiency.
Industry experts suggest that Starbucks faces a challenge as a myriad of new players enter the market with premium coffees and efficient service. In an attempt to address this, Starbucks' CEO, Brian Niccol, unveiled in October a plan to deliver drinks in under four minutes, aiming to appeal to those on the go, whilst decongesting in-store traffic and creating a calmer atmosphere.
However, drive-thru business seems to be tremendously successful for Starbucks' competitors. Chains like Scooter’s Coffee, 7 Brew, and especially Dutch Bros, which has doubled its footprint in around three-and-a-half years, are reaping the rewards of increased drive-thru traffic since the pandemic.
Even mature brands like Tim Hortons recognize the importance of drive-thru service efficiency, claiming every second saved translates into about $30,000 of annual sales per store.
Operating at a much grander scale with over 17,000 stores, Starbucks boasts sales figures 2.5 times larger than its largest competitor. But with scale comes increased expenses and challenges. As such, new players may have advantages with their lower overheads and higher-profit product offerings.
Despite these challenges, Starbucks' shares have risen about 25% since Niccol took over in September, demonstrating investors' confidence in his leadership. However, customers have an increasing array of options for picking up their coffee, with many likely to be attracted to independent cafes offering cozy atmospheres, affordable prices, and fresh on-site pastries. The competition for customer loyalty, it seems, is only intensifying.