Starbucks
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Starbucks
Table of Contents INDUSTRY OVERVIEW The coffee shop industry in the U.S. includes 23,000 stores with combined annual revenue of about $12 billion. Major companies include Starbucks, Dunkin’ Donuts, Caribou, Coffee Bean and Tea Leaf, and Diedrich (Gloria Jean’s). The industry is highly concentrated at the top and fragmented at the bottom: the top 50 companies have over 70 percent of industry sales. Coffee is one of the world’s largest commodities. The top green coffee producing countries are Brazil, Colombia, and Vietnam. Many grower countries are small, poor developing nations that depend on coffee to sustain local economies. The U.S. is the world’s largest importer of green coffee beans and the largest consumer of coffee. With the exception of Hawaii and Puerto Rico, the United States’ climate cannot support coffee trees. Coffee consumption is highest in the Northeast, where over 60 percent of the population consumed coffee daily in 2005, according to the National Coffee Association (NCA). Per capita consumption is highest in the Central U.S., where coffee drinkers average 3.7 cups per day. Major products sold by coffee shops include beverages as well as complimentary food items. Beverages include brewed coffee and tea; espresso drinks (cappuccinos, cafe lattes); cold blended beverages; bottled water; soft drinks; and juices. Food products include pastries, bakery items, desserts, sandwiches, and candy. Many coffee shops sell whole or ground coffee beans for home consumption. Some coffee shops sell coffee or espresso-making equipment, grinders, mugs, and other accessories. Most coffee shops serve high-quality, premium coffee known as specialty coffee. PORTER’S MODEL Competition The coffee industry in the United States is made of nearly 23000 stores with annual revenue of nearly $12 billion. The main players in the industry are:- Starbucks – Starbucks is the world’s number one coffee retailer and has more than 15000 shops in 44 different countries....
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