If the term “Coffee Wars” brings to mind hipsters arguing about roasts and brewing methods over cups of single-origin espresso, think again. Two giant chains are battling it out over coffee sales, and based on new research from Goldman Sachs, the Millennial market may hang in the balance.
The bank's new research note includes a survey of 2,000 consumers' restaurant preferences. The results show that the coveted under-34 demographic, which will soon be outspending boomers, is far more likely to buy anything from Starbucks than McDonald's—or any other food vendor. In a chart measuring awareness and sales among Millennials published by Quartz (and based on the bank’s data), McDonald’s and other fast-food chains, such as Subway and KFC, are found plumbing the lower reaches of the y-axis. McDonald’s registered below Potbelly Sandwich Shop, a regional chain in the Midwest.
Back at the top of the heap, Starbucks is joined by Dunkin' Donuts (fifth), Chipotle (fourth), Papa John’s (third), and Domino’s (second). Rather than get into the pizza game or rebrand its wraps as burritos, McDonald’s has decided to take on Starbucks instead.
“One of the chain’s top priorities is boosting ‘coffee-driven visits,’ according to a document laying out the company’s 2014 to 2016 U.S. strategy,” reports Bloomberg Businessweek. "Earlier this month, in a webcast for restaurant owners, McDonald’s vowed to become the 'envy' of rivals and said Starbucks Corp. (SBUX:US) was leading the 'coffee wars,' " the article continues.
Boosting McCafé sales, however, will likely require creating something of a McCafé culture at franchises. Starbucks is the kind of place you can linger and linger, after all, coming back to the counter for another coffee or three over the course of hours. With comfortable chairs, free wireless, and a resident population of would-be novelists and/or screenwriters at just about every location, allowing people to relax has become as much of the consumer-facing “brand” as misspelled names on cups.