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Coffeehouse Segment Expects a Good Year, Says Analyst

Coffee shops are posed to face a better year this 2012, as reported by investment and securities firm Jefferies & Company Inc.

The good news is brought about by increasing same-store revenues, a surge in the sales of consumer packaged products (CPG) and the more stable cost of coffee the past months. There is an expected 8% to 10% sales growth for the specialty coffee sector this year.

“In the mixed consumer sales atmosphere today, the coffeehouse sector persists in being one of the ‘haves’ when it comes to same-store revenue growth,” said Jefferies’ equity analyst Andy Barish. “We suppose the reason for the increase in average bills in these coffeehouses’ check presenters is the habitual element of coffee in the consumers’ routine and its affordable-yet-luxurious characteristics–in retail channel, in consumer packaged goods and in coffeehouses.”

Dunkin’ Donuts and Starbucks is projected to have a growth rate of 15% to 20% this year, while Caribou Coffee and Peet’s will have an estimated 20% increase.

Other than same-store revenues in coffee restaurants, there’s also an expected remarkable increase n CPG sales, brought about by the rising trend of K-cups that are being sold in supermarkets and grocery stores.

“We assume that this cycle will continue in the next years to come, until a shakeout happens among the major players,” Barish noted in his research.

In the latest fiscal quarter reports, the same-store revenue growth of Starbucks’ average bills in their check presenters was tallied at 10%; Dunkin’ Donuts was at 5.6%, while Caribou Coffee was at 4.1%.

In a nationwide grocery-store sales report, where ground coffee sales have been steadily increasing by 23% yearly, Caribou Coffee topped the charts, growing its market share by 1.9% in December 2011, and by 3.6% for the whole year.

Starbucks had a market share increase of 1.5% in December 2011, but went down by 12.5% for the whole year. Dunkin’ Donuts had an augmented market share of .5% in December but also lost 4% for 2011.

Barish also took special mention of the growing demand for Green Mountain Coffee Roasters’ K-Cups last year, as its sales increased by 163% in December and 156% for the year 2011. Starbucks, considered the newcomer in the single-serving coffee top sellers, made whopping $6.5 million sales for K-cups in December or a rough 12% of all K-cups that has been sold.

“This ought to be a promising start,” Barish said. “It’s probably a result of the holiday festivities, but we still expect that the trend will continue.”