Smaller and mid-sized chains are slowly taking larger pieces of the pie, according to Placer.ai’s latest traffic analysis

The coffee category is more competitive than ever. As trendy drive-thru chains like Dutch Bros and 7 Brew gain momentum, and newer emerging brands chip away at market share, Starbucks and Dunkin’s longtime reign at the top faces fresh challenges.

As previously reported, Starbucks’ slipping sales last year contrast sharply with Dutch Bros’ continued growth. New data from Placer.ai highlights this trend: Over the past five years, small coffee chains grew their traffic share from 3.2% to 4.4%, and mid-sized chains jumped from 10.8% to 17.6%. As a result, the largest players — Starbucks and Dunkin’ — saw their combined share dip from 85.9% in 2019 to 77.9% in 2024. While they still dominate, customers clearly are exploring alternatives beyond the most ubiquitous.

These gains have consequently resulted in traffic shares of the largest chains (Starbucks and Dunkin’) declining slightly from 85.9% to 77.9% since 2019, which is still a sizable industry lead, though many customers are clearly seeking more diverse coffee options than the biggest names.

This is all part of an overall coffee boom in the post-pandemic years following a period when most people made their coffee at home.

“The coffee segment has seen consistent visit growth over the past few years, demonstrating remarkable resilience – a trend fueled by steady consumer demand,” Placer.ai’s report said.

Placer.ai’s report also noted that the Midwest and South have particularly shown “heightened interest” in coffee. This could be the result of the largest coffee chains growing rapidly outside of their initial coastal, urban-heavy store concentrations. These areas are also the epicenter of growth for drive-thru chains like 7 Brew and Dutch Bros, the latter of which has not expanded to the Northeast region at all despite its rapidly growing popularity in other locales.

Visitor behavior to coffee shops is also evolving, with two very clearly separate occasions emerging: the quick drive-thru or mobile order pickup, and the longer café visit. According to Placer.ai, short visits of less than 10 minutes increased at larger and mid-sized chains over the past year, while smaller chains saw a larger increase of longer visits than shorter ones.

These behavior patterns could change as Starbucks CEO Brian Niccol looks to bring back Starbucks’ role as a third-place café, rather than just a quick stop after ordering on the app.

“These shifts highlight the different needs that coffee shops can fill within a community, with some offering speed and convenience, while others can meet the desire for a relaxed and personalized coffee experience,” the report stated.

Source https://www.nrn.com/quick-service/here-s-why-starbucks-and-dunkin-are-losing-share-in-the-coffee-category

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