We asked 1000 Millennials to tell us their favorite place to buy coffee, here are their top 10 hottest cups of joe…
Millennials are drinking their coffee on-the-go, and the industry is working hard to appeal to young caffeine-seekers. Younger consumers are reportedly drinking less black coffee than previous generations, drinking far more sweetened coffee drinks, and almost 50% are drinking their coffee away from home. At the same time, iced coffee (which is more likely to be purchased and not made at home) has recently seen “explosive growth.” The at-home coffee industry is creating new products like iced coffee concentrates to appeal to their tastes, but the reality is that it’s currently the major coffee chains that are really benefitting from their behavior. A 2015 Ypulse monthly survey found that 39% of 13-32-year-olds visit a coffee house (local or chain like Starbucks, Caribou, Peets etc.) 1-4 times a month (about once a week), and 11% visit 5-8 times a month (about twice a week). In the same survey, 19% of Millennials told us they are going to coffee houses more than they did last year. Of course, those chains are also monitoring Millennial coffee habits closely. The CEO of coffee chain Peet’s says that young consumers are “driving a shift in coffee consumption away from traditional economy brands and towards pricier, higher-quality beans.” Millennials reportedly are looking for the best cup of joe, instead of the cheapest, and higher price coffee chains are benefitting from their high-end java tastes.
We recently decided to see exactly which coffee chains are winning with Millennials, and surveyed 1000 13-33-year-olds with the question, “Thinking about places where you go to buy coffee, what is your favorite place to buy your brewed coffee, iced coffee, cappuccinos, lattes or espressos?”* We went through their answers to find their top ten favorite places to get their coffee buzz:
Starbucks dominated their favorite list, with Dunkin’ Donuts coming in second place, and local shops nipping at their heels. Millennials’ penchant for local and unique could continue to bolster non-chain coffee spots’ position, and local is the real current competior to the industry leaders. Though it looks like McDonald’s efforts to appeal to Millennials with coffee could be paying off, as they ranked fourth in Millennials’ favorites. But to get a clearer picture of the ranking, take a look at the wordcloud that shows the brand names’ size correlating with number of mentions:
Nearly half of Millennial respondents named Starbuck’s as their favorite place to buy coffee drinks. We’d say that’s blowing the competition out of the percolating water.
So let’s talk Starbucks. The monster chain’s big advantage might just be that they are everywhere, but they have also managed to appeal to Millennials’ coffee tastes most organically. Remember, they’re drinking less black coffee than previous generations, drinking far more sweetened coffee drinks, clamoring for iced coffee. From frappuccinos to pumpkin spice lattes, Starbucks is arguably known more for their non-black coffee items than their regular brew. According to investment bank Piper Jaffray’s latest teen survey, Starbucks is not just teens’ favorite coffee place, it’s their favorite restaurant chain. Their research shows that more teens chose Starbucks as their favorite restaurant than McDonald’s, and the coffee chain is ranked first among high-income and average income teens.
Starbucks marketing is of course also key in making it a powerhouse brand with young consumers. They have managed to become a seasonal juggernaut, with limited-time products and designs that celebrate autumn and winter. The brand’s red cups come out as the holidays approach, and for years, young fans have been showing their excitement for the designs on social media. The brand has also made significant effort to be a leader in the spaces that matter to Millennials—like social good, and, of course, mobile. Wired says the coffee brand “may well have the best mobile retail app in existence.” Their mobile order and pay feature is already processing 5 million mobile orders a month, and active mobile users have grown by 32% year over year.
The benefits of having Millennials’ support is showing. According to Motley Fool, Starbucks’s “total revenue grew 18% during the third quarter of fiscal 2015, with global comparable sales jumping 7% year over year. Starbucks has sustained comparable sales growth of more than 5% annually over the past 22 quarters, quite an outstanding track record of consistency over time.” That growth has to be coming from somewhere, and Millennials’ high regard for the chain is a likely source.
*These were open-end response questions to allow us to capture the full range of Millennials’ favorites coffee shops. As with any qualitative question, the responses include those that are top of mind, and those that are actually most loved.
