The coffee world emerging from COVID-19 is hardly recognizable. If for no other reason, you can’t split convenience and experience like the old days. Starbucks’ “third place” isn’t buried, but the rise of mobile order-ahead shifted its path.

The java giant plans to devote 90 percent of its new store growth to units with drive-thrus. Mobile order and pay and delivery accounted for 72 percent of Starbucks’ total sales volume in North America in Q4, with delivery representing more than 4 percent of sales—up 35 percent year over year.  

While this isn’t surprising, the end result might just be. Instead of limiting or challenging the sector, it appears to have jolted it. Coffee concepts’ abilities to complement portfolios with different models (say a drive-thru-only unit next to a large-scale Roastery experience), broke open market penetration. Starbucks across fiscal 2022 opened a net of 429 locations in the U.S.—the most of any restaurant brand in America (more in this year’s upcoming QSR 50).

And it’s not alone. Caribou Coffee, part of Panera Brands along with Einstein Bros., announced in April it signed “several” multi-unit deals to franchise north of 300 new locations domestically. The brand expanded its franchise program in October 2021, which marked the first time candidates had an opportunity own and operate traditional Caribou franchises in the U.S. It took off quickly.

Caribou inked its first multi-store agreement with Mike Mariola Restaurants and followed with Wake Up 727 in Pinellas County, Florida. Then, notably, Caribou executed deals with some Panera Bread franchisees, which was always the aim with the merged approach, including Paul Saber and Patrick Rogers (over 50 in Michigan) and Mike Hamra and Hamra Enterprises (24 in Missouri). Hamra runs nearly 100 Wendy’s and employs over 7,000 people.

Caribou followed with its largest deals yet—Kevin Ricci and Sam Covelli. Combined, those agreements outlined 160 or so units from the West Coast of Florida to Western Pennsylvania. Covelli is the largest franchisee in Panera’s system at 300-plus locations. 

As important as the growth figures themselves, going back to the Starbucks’ point, is Caribou’s race to become more agile in its design. The chain, in 2019, rolled a drive-thru-focused “Cabin” prototype that began as a 600-square-foot drive-thru with a walk-up window (no indoor seating). There’s a full coffee bar, limited food menu, and outside patio seating/dining space. The early openings were achieving average gross sales ($1.116 million) higher than traditional drive-thru Chalet builds ($1.070 million). Here’s a deeper breakdown of both.

Emerging brand Bad Ass Coffee of Hawaii explored a double drive-thru in late summer 2022 and has a bevy of fresh prototypes, from a freestanding drive-thru with a full café that spans roughly 1,650–1,800 square feet to a double-drive thru that’s 500–740 square feet with a pickup window and no interior seating. Bad Ass Coffee is a chain with fewer than 30 stores, but more than 90 sold. 

So what about the coffee consumer’s evolution? There were countless stories in 2020 about mobility restrictions erasing the early morning daypart. On-the-way-to-work routines evaporated. That all shifted pushed later in the day. Soon, remote offices and hybrid adjustments created an all-day appeal that flashed in early afternoons. Customers, Bad Ass Coffee CEO Scott Snyder told QSR, began looking at coffee as a middle-of-the-day occasion where they could escape. 

Coffee hasn’t felt the heat of inflation all that much, either. In a cost-sensitive climate where many are trading down, leading to discounting, Starbucks’ loyalists weren’t fazed in Q1. Founder and former CEO Howard Schultz credited it to Starbucks’ strengths in customization. That’s where its value perception solidified as an “affordable luxury.”

And stats backed Schultz up: The number of unique customers grew 10 percent in Q1, setting another banner. Modifier sales rose 28 percent in U.S. company-run stores.

Starbucks’ North America and U.S. same-store sales increased 10 percent in Q1, driven by a 9 percent hike in average ticket and a 1 percent lift in comparable transactions, year-over-year. Starbucks’ ticket in December was the highest it’s ever been.

Just as McDonald’s and Burger King have begun to innovate around their cores instead of releasing revolving LTOs, Starbucks’ days of Unicorn Frappuccinos appear retired. The chain instead is using mobile, and the customization capabilities that come along with it, as a way to justify costs to consumers. Control over novelty.

Starbucks Rewards membership in the U.S. exited Q1 over 30 million members, up four million (15 percent) over last year and 6 percent sequentially.

Now, let’s view more historic measures. Starbucks’ transactions per store day, which is how it measures the health of its business, remained below 2020 trends in Q1. Yet traffic began to climb during peak demand. The morning daypart and midday (up to 1 p.m.) witnessed a year-over-year increase in transactions and units, as well as ticket. Those dayparts are in line with 2019 levels.

Rewards members were responsible for a record 56 percent of tender, 3 percent higher than last year. Starbucks appreciated mobile order usage at 27 percent of transactions in domestic company restaurants—also a record. The chain hit an all-time high in the population of weekly total active customers and saw more than $3.3 billion loaded onto Starbucks cards in the U.S. That, too, exceeded a company record set last year.

According to data from analytics platform Placer.ai, visits at Starbucks and Dunkin’ are lifting through early 2023. Starbucks, which experienced a monthly year-over-year visit gap ranging from 6.4 to 10 percent throughout Q4 of 2022, saw foot traffic begin to pick up as January turned over. While some of the January and February visit growth may be attributable to the Omicron-induced hit of early 2022, year-over-year, the positive trend continued into March and early April. 

Dunkin’ saw its visit gap begin to narrow in recent weeks, too, with foot traffic for the second week of April just 0.5 percent lower than it was in April 2022. “Consumers, it would seem, have begun to recover from last summer’s sticker shock and are once again finding room in their budgets for affordable pick-me-ups,” the company said. 

This extended to competitors Peet’s Coffee and Dutch Bros. In Q1 2022, 24.9 percent of Peet’s visitors frequented it at least twice—a metric that bumped to 25.1 percent in Q1 2023. 

Inflation or note, traffic to both ran alongside recent trends.

Per the National Coffee Association, past-day coffee consumption across all generations stabilized of late and has returned to pre-pandemic levels. More Americans drank coffee in the past day (65 percent) than any other beverage, according to data published in early April. The pandemic did not change how much coffee Americans drink (1.9 cups per capita or 2.9 cups per past-day coffee drinker), but it has produced lingering effects on the place of consumption. In the report, 83 percent of past-day coffee drinkers had coffee at home, up by 4 percent since January 2020. Thirty-five percent had coffee away from home, continuing to rebound from a low of 31 percent in January 2021, but down from 41 percent in January 2020. 

A lot of the past-day consumption is being fueled by earlier generations: For adults aged 40–59, it increased by more than 6 percent since January 2020.  In the 25–39 bracket, it lifted by nearly 5 percent. Meanwhile, consumption by older adults (60-plus) increased by 1.5 percent. Last-day consumption by 18-24-year-olds remained stable. 

Some other key findings: 

Lattes, espressos, and cappuccinos were in a three-way tie for America’s most popular specialty coffee beverage (each enjoyed by 16 percent of past-day coffee drinkers).

About one-third (32 percent) of past-week coffee drinkers had flavored coffee. Vanilla was the most popular flavor, followed by mocha, hazelnut, and caramel.

The most popular serving size was 12–16 ounces (52 percent of past-day coffee drinkers), followed by 5–8 ounces (44 percent), and 20-plus ounces (12 percent).

Coffee is simply proving resilient—to inflation, pandemic kickbacks, and everything else along the roller coaster. And this ties back into the original point of flexibility.

Although some coffee traffic is likely driven by consumers grabbing a cup of joe for a morning or afternoon boost, Placer.ai said, location intelligence revealed a relative increase in midday visits at coffee leaders nationwide. Between Q1 2019 and Q1 2023, almost all coffee chains analyzed, including Starbucks, Dunkin’, Tim Hortons, Peet’s Coffee, and Caribou Coffee (and excluding Dutch Bros) saw an increase in visits between 11 am and 2 pm.  

Changes throughout the week reflect an evolving workforce as well. Between Q1 2022 and Q1 2023, weekday visits to coffee shops increased across all four major chains. Dutch Bros observed the most significant shift in its visitation patterns, with weekday visits to the brand growing from 59.3 percent in Q1 2022 to 61.8 percent in Q1 2023.   

Placer.ai also witnessed the emergence of a younger consumer. Between Q1 2019 and Q1 2023, the median age of Dunkin’s visitors dropped from 36.2 to 33.6. “This 7.2 percent decrease may have been aided by some of the initiatives the chain introduced, such as its partnership with TikTok celebrities like Charli D’Amelio and its plant-based breakfast options. The company also launched makeup and clothing lines in collaboration with e.l.f and Carters in 2022,” the company said.  

Dutch Bros had no troubling courting this phenomena, either: In 2022, residents of the brand’s trade areas in California had a median age of 32.7, while the median age in the trade areas of the wider California coffee industry stood at 34.0.  “As the wider dining space adapts to changing consumer behavior, coffee shops may continue to face challenges in the coming months. But if the last few years are any indication, these chains will evolve to meet changing customer needs into 2023 and beyond,” Placer.ai said.