Specialty Coffee Shops Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, China, Japan, UK, Germany - Size and Forecast 2024-2028

Specialty Coffee Shops Market Size 2024-2028 

The Specialty Coffee Shops Market size is forecast to increase by USD 57.41 billion, at a CAGR of 7.83% between 2023 and 2028. 

The market is witnessing rapid growth driven by several key factors. One of the main drivers is the increasing global consumption of coffee, coupled with the proliferation of specialty coffee shops worldwide. This trend is further fueled by rapid urbanization and evolving consumer lifestyles, which are creating a robust demand for coffee products. As more consumers embrace the coffee culture and the demand for high-quality coffee experiences grows, the market is expected to continue expanding. To meet the evolving preferences of coffee enthusiasts worldwide, the market is likely to see ongoing innovation and development in coffee products and experiences.

What will be the Size of the Market During the Forecast Period?

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Market Dynamic and Customer Landscape

The market is driven by the growing popularity of specialty coffee culture and the rise of third-wave coffee movements. Consumers increasingly seek unique and artisanal coffee experiences, favoring independent coffee shops and specialty coffee brands over mainstream options. However, challenges such as maintaining quality consistency, competition from coffee shop chains, and fluctuating coffee bean prices pose hurdles to market growth. Nonetheless, evolving coffee consumption habits and ongoing trends continue to shape the dynamic landscape of the specialty coffee sector. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The growing number of specialty coffee shops globally is notably driving the market growth. One of the primary factors driving the demand for specialty cafes is the increasing popularity of socializing at shops among millennials. The growing urban population globally is also a major factor that is contributing to the growing popularity of such shops. The growing urban student and white-collared populations are resulting in an increased need for food service outlets globally. The preference for different types of fresh brew has further led to the emergence of brew shops and quick-service restaurants. Leading coffee shop chains such as Starbucks, Costa, and Coffee Day are opening their outlets in emerging economies. The growing popularity of malls and shopping centers has also led to many new players investing substantially in the distribution of coffee through such outlets.

Moreover, the market encompasses various segments, including coffeehouse market, gourmet coffee market, and craft coffee market. It thrives on Independent Coffee Shops and Local Coffee Shops driven by Third Wave Coffee Movement. With premium coffee offerings and evolving Coffee Consumption Habits, it embodies a rich specialty coffee culture. Coffee-themed restaurants offer premium products to consumers, which, in turn, may lead to them seeking these premium products at retail stores. Products such as iced coffee have gained popularity among young consumers. Also, growth in infrastructures, such as airports and highways, in developing countries provides opportunities for major shop chains to establish new outlets, contributing to the growth of the market during the forecast period.

Significant Market Trends

Growing demand for premium and specialty coffee is an emerging trend shaping market growth. Increased urbanization globally has led to improved living standards and higher disposable incomes. On the other hand, urban living has resulted in deteriorating health conditions and lifestyle disorders owing to unhealthy eating habits. Thus, consumers in urban regions are increasingly looking for premium and healthier alternatives. Many manufacturers have started capitalizing on consumers' growing desire for organic beverages that are also environmentally friendly. Organic beverage products, being free from chemicals, pesticides, and hormones, are safer and nutritionally superior to their non-organic counterparts.

Further, organic farming is open to risks in the form of lower yields and attacks by pests and diseases, which can further diminish the profits of the producers. Manufacturers and retailers are trying to increase awareness about organic beverages among consumers to gain market for specialty coffee share. Product offerings such as organic, shade-grown brew, and fair-traded brew products will attract consumers concerned about environmental sustainability and ethical issues. Such factors are expected to drive the growth of the market during the forecast period.

Major Market Challenge

The vulnerability of coffee production to weather conditions is a significant challenge hindering market growth. Brew plants are vulnerable to damage from natural disasters and unpredictable adverse weather conditions, such as droughts, floods, frost, and earthquakes. Seasonal wind shifts can lead to prolonged and excessive rainfall, which leads to landslides and mudflows in mountain terrains. Untimely rainfall and frost can cause an outbreak of brew rust, a fungal disease that causes defoliation and disrupts the plant's ability to bear fruit. Adverse weather conditions and disease outbreaks in South America may negatively affect the production.

However, brew production is impacted by rising temperatures, low, predictable rainfall, unpredictable swings from drought to flooding, new pests, and other causes. Some plantations may need to plant a fresh crop, which will take years to mature due to the extent of the damage. This will result in a price increase. These factors will challenge the market growth during the forecast period.

Market Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Barista Coffee - The company offers speciality coffee, namely Barista Cafe chain, which delivers a true coffee experience in a warm, friendly, and relaxed environment.

The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• Brew Berrys Hospitality Pvt Ltd.
• Caffe Nero Group Ltd
• Caribou Coffee Operating Co. Inc.
• Costa Ltd.
• Inspire Brands Inc.
• Luckin Coffee Inc.
• McDonald Corp.
• MTY Food Group Inc.
• Nestle SA
• Peets Coffee Inc.
• Starbucks Corp.
• Coffee Beanery
• Coffee Day Enterprises Ltd.
• Doutor Coffee Co. Ltd.
• EDIYA COFEE CO.
• Grupo Herdez
• La Colombe Coffee Roasters.
•  PILOT COFFEE ROASTERS
• Blue Tokai Coffee

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Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Segment

The independent coffee shops segment is estimated to witness significant growth during the forecast period.  The growth of the segment is expected to result primarily from a growth in the number of gourmet cafes globally. The growing popularity of gourmet shops among the urban population is resulting in vendors expanding their business to cater to the population in developed countries. Independent shops find it difficult to compete with major multinational brands that are expanding aggressively. 

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The independent coffee shops were the largest segment and were valued at USD 59.40 billion in 2018. Independent shops are playing a significant role in driving the growth of the market for specialty coffee due to their emphasis on quality, craftsmanship, and unique offerings. These establishments differentiate themselves from mainstream chains by prioritizing beans sourced from sustainable and ethical suppliers, as well as by focusing on artisanal brewing methods and personalized customer experiences. Moreover, their flexibility and adaptability allow them to cater to niche markets and experiment with innovative flavors, brewing techniques, and menu offerings, appealing to discerning brew enthusiasts seeking authentic and memorable experiences. These factors are expected to drive the growth of the segment of the market during the forecast period.

Which are the Key Regions for the Market?

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North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Customization is a key element that numerous customers in North America, especially millennials, look for. Specialty cafes offer the option to customize brew or other beverages as per customers preferences. Various vendors, such as McDonald, Brew Day, and Starbucks, offer customization services for almost all of their beverage options.

In addition, companies are also coming up with food bowls that allow customers the choice of eating the meal either one food ingredient at a time or combining all the ingredients. The hectic lifestyle of the working population and students is also contributing to the growth of the market for specialty coffee in the region. The limited time to prepare food and beverages at home is resulting in the population opting for specialty cafes for brew and breakfast daily. These factors are expected to drive the growth of the market in the region during the forecast period.

Segment Overview

The research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments.

• Type Outlook 
  • Independent coffee shops
  • Chain coffee shops

• Distribution Channel Outlook 
  • Offline
  • Online

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • South America
    • Chile
    • Brazil
    • Argentina 
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview 

The market is thriving, driven by the Third Wave Coffee Movement and increasing demand for gourmet and artisanal coffee. Local coffee shops and micro-roasteries lead the charge, offering single-origin beans and craft brewing techniques. Emphasizing sustainable sourcing and ethical practices, they foster direct trade relationships and promote fair trade and organic offerings. These establishments prioritize coffee knowledge and flavor profiles, engaging customers through tasting experiences and roasting mastery. With a focus on community engagement and atmosphere design, they curate diverse menus, showcasing specialty drinks and innovative blends. Through coffee subscription services and educational workshops, they nurture coffee culture and drive beverage trends. Specialty coffee events and education programs further elevate the market, solidifying the role of specialty coffee roasting in the coffee industry. 

Further, the market thrives on the passion for artisanal roasting and beverage innovation. These establishments epitomize the third-wave movement with an emphasis on espresso culture and latte artistry. They offer diverse specialty blends sourced through ethical practices and fair trade principles. Independent cafes lead the charge in promoting sustainable practices and menu diversity, engaging customers through coffee workshops and education. With barista expertise and cold brew techniques, they cater to evolving coffee consumption habits and foster a vibrant specialty coffee culture. As hubs for gourmet and premium coffee, these shops serve as beacons of the specialty coffee sector, shaping coffee trends and delighting aficionados with unique coffee experiences. 

Also, the market flourishes as a haven for enthusiasts seeking the finest brews. These establishments epitomize the essence of artisan and craft coffee, offering a curated selection from local roasters committed to ethical sourcing and fair trade practices. With a focus on gourmet and premium blends, they showcase specialty coffee brands and cater to evolving coffee trends. Embracing coffee education, they elevate the coffee experience, imparting knowledge on brewing techniques and flavor profiles. As pillars of the coffeehouse and coffee retail market, these shops embody the spirit of artisanal and gourmet coffee, providing a sanctuary for coffee aficionados to indulge in their passion for exceptional coffee. Furthermore, the market prospers with diverse segments like coffeehouse, gourmet, artisan, craft, and premium coffee markets. Keeping pace with specialty coffee trends is crucial for businesses to innovate and cater to evolving consumer preferences.

Market Scope
Report Coverage	Details
Page number	159
Base year	2023
Historic period	2018-2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 7.83%
Market Growth 2024-2028	USD 57.41 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	7.27
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 32%
Key countries	US, China, Japan, UK, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Barista Coffee, Brew Berrys Hospitality Pvt Ltd., Caffe Nero Group Ltd, Caribou Coffee Operating Co. Inc., Costa Ltd., Inspire Brands Inc., Luckin Coffee Inc., McDonald Corp., MTY Food Group Inc., Nestle SA, Peets Coffee Inc., Starbucks Corp., Coffee Beanery, Coffee Day Enterprises Ltd., Doutor Coffee Co. Ltd., EDIYA COFEE CO., Grupo Herdez, La Colombe Coffee Roasters.,  PILOT COFFEE ROASTERS, and Blue Tokai Coffee
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behavior
• Growth of the market across North America, Europe, APAC, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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