Over the five years to 2012, IBISWorld estimates revenue will grow at an average annual rate of 1.2% to $27.8bn.
After revenue declined 6.6% to $25.3bn from 2008 to 2009, it began its upward climb in 2010 and 2011, with growth of 3.0% and 3.1%, respectively.
During the recession, consumers spent less on luxuries like eating out, and they purchased lower-priced items when they did spend. This caused high-priced coffee drinks and other nonessential snacks to lose the battle over people’s shrinking budgets.
IBISWorld industry analyst Nima Samadi, said: ” Consumers have also become increasingly health-conscious over the five years to 2012.
“Many retailers have responded by expanding their healthy option, and retailers like Jamba Juice have experienced growth due to the health benefits of their products.”
Still, the general trend toward healthy eating has hurt the industry’s unhealthier segments, such as donut and ice cream shops. Over the past five years, industry employment has grown at a muted rate of 0.5% per year to 490,123 employees.
To combat slumping sales, major operators like Jamba Juice, Starbucks and Dunkin’ Donuts have expanded their menus to offer nontraditional, high-margin menu items like iced coffee drinks, breakfast items and healthy wraps, aiding them in their turnaround.
Many major chains are also investing in international growth as part of a long-term strategy. Companies like Starbucks view China, in particular, as a market with huge potential for growth and long-term profitability.
IBISWorld estimates that in 2012, the top four players in the Coffee and Snack Shops industry account for more than 40.0% of the available market share, providing this industry with a medium level of concentration.
Source: IBISWorld
.
© FoodBev Media Ltd 2024