Value becomes competition hot spot in $54bn US branded coffee shop market

Project Café USA 2025, World Coffee Portal’s definitive report on the US branded coffee shop market, reveals the $54bn segment now comprises over 42,700 outlets trading under 500 unique brands. Despite most operators achieving year-on-year sales growth, industry leaders remain cautious amid high inflation, weak consumer confidence and rising value-focused competition

Photo credit: World Coffee Portal

• US branded coffee shop market achieves strong net outlet growth, increasing 5% to reach 42,773 stores  

Competition intensifies as US operators add over 2,000 net new outlets 

 

The branded US coffee shop market has sustained strong post-pandemic growth, adding 2,062 net new outlets over the last 12 months to reach 42,773 stores. Alongside the continued expansion of market leaders Starbucks and Dunkin’, major drive-thru operators Dutch Bros and Scooter’s Coffee each added over 100 net new stores to their estates, while Arkansas-based 7 Brew was the fastest growing chain by outlets. 

Competition in the US branded coffee shop market is also intensifying, with World Coffee Portal identifying 500 unique branded chain concepts currently operating. Six new operators entered the market last year – including Italy’s Café Barbera, the UK’s WatchHouse and Black Sheep Coffee, and Vietnam’s Trung Nguyên Legend – while 44 US independents graduated to branded coffee chain status after surpassing five outlets.  

US branded coffee chains face tough choices on pricing amid soaring costs 

Rising property, labour and green coffee prices have compelled many US branded coffee chains to raise prices over the last 12 months.  

 

The average price of a 16oz latte now exceeds $5, while some operators now charge more than $6 for a blended frappe of the same size. However, value has become a key battle ground in the US, with many operators exercising caution on further price rises as consumers continue to cut back on discretionary spending.  

Emphasising the growing imperative for US coffee chains to demonstrate value-for-money, market leaders Starbucks and Dunkin’ both introduced lower cost food and beverage ranges amid stronger competition from value-focused non-specialist operators, such as McDonald’s, 7-Eleven, Circle K and Whataburger.  

Financially strained US coffee chains still see long-term growth potential 

 

With US coffee shop operators facing high costs, lower consumer confidence and fierce competition, just 39% of those surveyed expect trading conditions to improve over the next 12 months – a near 20% year-on-year decline – with nearly a fifth anticipating market conditions will deteriorate. 

However, most industry leaders surveyed forecast like-for-like sales growth will outperform GDP over the next 12 months. Despite the gloomy short-term outlook, 82% of industry leaders agree there remains significant growth potential for branded coffee chains in the US.  

World Coffee Portal forecasts the total US branded coffee shop market will grow at 3.7% CAGR over the next five years to surpass 59,900 outlets in 2029. Total sales are expected to surpass $72bn over the same period, at 5.9% CAGR. 

Commenting on the report findings, Allegra Group Founder and CEO Jeffrey Young said:   

“I’m encouraged to see that both larger chains and boutique concepts are demonstrating strong growth in the robust US branded coffee shop market. There continues to be a tremendous thirst for coffee across the US, with the growing popularity of iced beverages and a shift towards indulgence providing fuel for the next generation of coffee shop consumers. I’ve no doubt there remains plenty of room for growth in this behemoth market.” 

 

Project Café USA 2025 is World Coffee Portal’s definitive annual study of the US branded coffee shop market across all 50 states. The research includes market sizing, sector-by-sector insight, beverage pricing, brand profiles and an in-depth survey of more than 5,000 US coffee consumers. 

To purchase the report or to make an enquiry, contact: 

enquiries@worldcoffeeportal.com 

+44 (0) 20 7691 8800