Tuesday, January 10, 2012

The coffee wars are percolating.

         The coffee wars are about to open a third front. Dunkin' Donuts is getting serious.

         They already have 57% of the fast-food coffee market in New England and New York, and they're planning to expand throughout the U.S. this year and next.

          So now there are the three powers: Starbucks, McDonalds, and Dunkin' Donuts. But don't expect Dunkin' to take much business from Starbucks.

          A recent survey showed that Dunkin's customers don't think Starbucks is for them. "Couches? I'm here to eat, not to sleep". The Italian words, the marble, the little tables --- "it's cold". And no real cakey donuts. Looks like a lot of people aren't hankerin' for what Starbucks calls "the third place to be".

         It works both ways. Starbucks customers don't think that much of the Dunkin' Donuts way of doing business, either. No big flurry of activity at the expresso machine, no leather arm chairs, no maple oat scones; just coffee, donuts, and a other things.

        Is Dunkin' the anti-Starbucks we've been expecting? To do to them what they did to all those mom-and-pops? I doubt it. I think Starbucks has spoiled most of us. We're not going to give up the cafe and go back to the coffee shop. We like those moments of feeling special each morning, with our Starbucks' rituals and knowing that our coffee doesn't have to be commonplace.

       What would be an even better experience?  Here in San Francisco we have Cafe Trieste and the other coffee houses in North Beach. Italian singers often brighten things up and have everyone smiling.

        In Seattle, Starbucks is testing beer and wine to anchor their after-work and evening business. They'll be even harder for Dunkin' to catch up with.

        I'm guessing Coca-Cola is going to come up with coffee ideas of their own, possibly using some of the ideas they use in their vending machine coffee in Japan.

        All of us should turn on our entrepreneurial brains and come up with a way to make millions in the coffee business.

       But first I'll have a grande double shot soy caramel macchiato.

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