What trends are hot and cold in the coffee industry?
The specialist listed key influences within the industry in general. One theme on the product side was healthier, plant-based products, as well as innovation on the cold drinks front such as nitro cold brews and cold foam. Looking ahead, “the other post-COVID prediction I would make is that people, and I don’t think this is too controversial, are craving reconnection, and I think that will really help the coffee industry in general, especially the café industry.”
Improved digital systems were credited as the driving force behind placing Starbucks in a strong position for recovering. “Something like 80% of their volume in one quarter was through the drive-through or people picking it up and not coming into the restaurant, and that wasn’t the case prior. I think the digital ecosystem and the alternate ways of delivering have made it so they’re much higher on the recovery curve than they would be.”
An overview of the competition was also given, including whether McDonald’s move into premium coffee could be seen as a credible threat. As Starbucks offers both take out and at-home products, the interviewee was asked about its positioning versus peers in the latter segment.
Another point of conversation was China, “which is their second-biggest market and fastest-growing market”. As well as there being a “significant first-mover advantage”, another important differentiating factor is China’s advanced digital ecosystem: “They’re bolting on these digital sales much sooner in the marketplace cycle than happened in the US, and they’ve partnered with some powerful players like Alibaba and WeChat.”
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