Starbucks Corporation is a well-known US-based multinational coffeehouses and roastery reserves chain. The company is currently the world’s largest coffeehouse chain with over 16,000 licensed stores and more than 16,500 company-operated stores. In September 2020, the company also reported a total of 32,660 stores across 83 countries.
The primary market for Starbucks is still the United States, Canada, and Latin America. The coffeehouse serves varieties of drinks: hot and cold drinks, whole-bean coffee, micro-ground instant coffee, espresso, caffe latte, full and loose-leaf teas, juices, pastries, Frappuccino beverages, and snacks. The company also recently celebrated half a decade in business, initially starting operations in 1971.
Starbucks is not only the world’s largest coffeehouse chain but also one of the largest companies worldwide. The company ranks 114th on the Fortune 500 list and 288th on the Forbes Global 2000 list. In 2019, it reported revenues of 26.5 billion with an operating income of $4.07 billion. However, it made a net loss of $3.59 billion.
Starbucks also owns various subsidiaries that offer the same or substitute products. These include Ethos Water, Evolution Fresh, Seattle’s Best Coffee, La Boulange Bakery, Teavana, Tata Starbucks, etc. Being the largest coffeehouse chain allows the company to eliminate or overcome most of its competitors. Despite that, Starbucks has various competitors that compete with the company in several markets.
Starbucks faces prominent competition in most of the markets in which it operates. These competitors also serve as alternatives for users that want a product from another company. Overall, being the largest name in the industry puts Starbucks at a disadvantage due to the competition. Nonetheless, the list of the top ten Starbucks competitors and alternatives are as below.
1. Dunkin’ Donuts
Dunkin’ Donuts is the second-largest company in the US market in terms of franchises and branches. The company began its operations in 1950. Although well-known for its doughnuts, the chain also serves coffee, a primary competitor to Starbucks. Dunkin’ Donuts is known as one of the largest coffee and doughnut shop chains in the world, having over 12,900 locations across 42 countries.
Dunkin’ Donuts reported revenues of $1.37 billion in 2019. It currently operates under the parent company Inspire Brands, which also owns Arb’s, Buffalo Wild Wings, Sonic Drive-In, Mister Donut, Baskin-Robbins, and other brands. Dunkin’ Donuts is one of Starbucks’ primary competitors in the US, Canada, and several other markets.
2. Costa Coffee
Costa Coffee is the UK equivalent of Starbucks. It started its operations in 1971 as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. Over the years, Costa has gone through various acquisitions and currently operates under the Coca-Cola Company. In 2019, Costa Coffee reported over 3,800 locations.
Costa Coffee is known as the second-largest coffeehouse chain in the world. Its primary market is the UK market, where it is the number one coffeehouse chain. The company operates in 3 continents across 32 countries. However, it does not compete in the US market. Despite that, Costa Coffee is one of the most prominent Starbucks competitors and alternatives.
3. McCafé
McCafé is a coffeehouse chain operated by McDonald’s. The company launched its services in 1993 in Australia. However, it has expanded its operations to several countries throughout its years of operations. McCafé was the largest coffee shop brand in Australia and New Zealand. However, it has lost that title to other competitors over the years.
McCafé reported over 15,000 outlets globally. The company has the advantage of working under McDonald’s, which is a well-recognized brand worldwide. The coffeehouse not only specializes in coffee but also food and other beverages. Although McCafé is not as big as some other names on this list, it poses a substantial competitive threat to Starbucks.
4. Gloria Jean’s
Gloria Jean’s is a coffeehouse based in the US with current headquarters in Australia. The company owns over 1,000 locations in more than 39 countries. The company started its operations in 1979, founded by Gloria Jean Kvetko in Chicago, Illinois, United States. Initially, Gloria Jean’s was a small coffee and gift shop. However, it has grown its business in several countries over the years.
Gloria Jean’s does not have the same resources as Starbucks and some other competitors. However, it is a well-known name across various markets where Starbucks operates. On top of that, the company also has branches and franchises in several locations where Starbucks doesn’t work. Gloria Jean’s is one of the three largest coffeehouse chains in Australia.
5. Tim Horton’s
Tim Horton’s is a multinational fast food restaurant chain. Its products include coffee, doughnuts and other fast-food items. Similarly, it operates in several countries. However, its primary market is the Canadian market, where it holds a 54% market share. Being the largest coffeehouse chain in Canada, Tim Horton’s is a significant competitor to Starbucks in that market.
Tim Horton’s currently operates under the parent company Restaurant Brands International. This parent company also owns other major brands, Burger King and Popeyes. The company reported 4,846 locations across 14 countries in 2018. Time Horton’s is also operational in the US market. However, it does not pose a significant threat to Starbucks in the US.
6. Peet’s Coffee
Peet’s Coffee is another alternative to Starbucks, initially starting as a coffee store in California in 1966. Over the years, Peet’s coffee has expanded its business across several locations and become a significant name in the coffeehouse chain’s business. Currently, Peet’s Coffee operates under the JAB Holding Company, which also owns various other restaurants and coffeehouses.
JAB Holding Company is one of the largest competitors in the coffeehouse and restaurant chain industry. Working under this brand also helps Peet’s Coffee in terms of competition. Peet’s Coffee reported $983 million in revenues in 2019. Peet’s coffee is sold in over 14,000 grocery stores across the United States. The company has slowly been increasing its market share over the years.
7. Café Coffee Day
Starbucks also offers its services in India through its Tata Starbucks subsidiary. However, it faces significant competition from Café Coffee Day, one of India’s largest coffeehouse chains. Café Coffee Day started its operations in 1993. Over the years, Café Coffee Day expanded its business to several locations across the world. Currently, however, it only operates in the Indian market.
Café Coffee Day dominates the Indian market, where it serves in over 1,500 locations. The company reported $600 million in revenues in 2019. However, Café Coffee Day suffered in 2019 due to the owner allegedly committing suicide. Despite that, it is still the largest coffeehouse chain in the Indian market.
8. Luckin Coffee
Luckin Coffee is a Chinese coffee company and coffeehouse chain. The company started its operations in Beijing in 2017. Over the few years that the company has been operational, it has become China’s largest coffeehouse chain. The company manages over 4,500 kiosks as of 2020. This number is larger than the number of Starbucks stores in China.
Luckin Coffee has the advantage of being a local company in a large market. The company reported $618 million in revenues in 2020. Luckin Coffee has gone through many ups and downs throughout its few years of operations. Most recently, the company filed for bankruptcy in the US in February 2021. When it comes to the Chinese market, Luckin Coffee is Starbucks’ largest competitor.
9. Folgers
Folgers Coffee isn’t a coffeehouse chain. However, it is a brand of ground, instant, and k-pup coffee produced in the US. The company primarily operates in the US market. However, it also has operations in Asia, Canada, and Mexico. It is a part of The J.M. Smucker Company and forms a part of its food and beverage division.
Folgers Coffee has been operated since 1850. The company is one of the oldest names on this list. Although Folgers is not the same as Starbucks in terms of services and products, it serves as an alternative. Being in the coffee business makes Folgers’ products a substitute for what Starbucks offers. Its products can also help customers save money on buying coffee from coffeehouse chains.
10. Lavazza
Luigi Lavazza S.p.A is a coffee products manufacturer based in Italy. The company started its operations in 1895 in Turin, Italy. Initially, it was a small grocery store. However, the company has gone through several generations of the Lavazza family and become a recognized name in the industry. Lavazza also operates various retail coffee shops.
Lavazza imports its coffee from various locations, including Brazil, Colombia, Costa Rica, Indonesia, Mexico, and the US. It operates in several countries under its own brand or one of its subsidiaries. The company has a good following in major markets where Starbucks operates, such as the UK and the US. Although not similar to Starbucks, Lavazza is in the same industry, making it a decent alternative.
Conclusion
Starbucks is undoubtedly the largest name in the coffeehouse chain market. The company operates over 32,000 stores worldwide, making it the largest coffeehouse chain in the world. However, Starbucks also attracts a lot of competition. These competitors compete with Starbucks in the US and various other markets. Some competitors also come offering substitute products, making them an alternative to Starbucks.
