Starbucks is becoming irrelevant, and most people in the US think of it as similar to a McDonald’s...
The company has lost almost 25% of its value on the stock market in the past year...
And even the past 5 year returns are above -20%...
This is when coffee is one of the 4 best beverages to build a business in right now... the other 3 being water, energy drinks and boba.
Almost a quarter of all customers say that it’s too crowded now, which is why they don’t like going there... and a number of better coffee alternatives have come up in the market.
Luckin Coffee has beaten Starbucks in China, by opening double as many stores as Starbucks in the country in just one year...
In India, Starbucks has been loss making now for 10 years...
And the real premium / aspirational customer it focused on getting is now exploring speciality coffees that don’t scale...
Think there’s Subko in India, and then a lot of niche players, which have limited stores owing to limited supply of single origin coffees that they curate.
Another nail in its coffin has been the over-indexing on digital, and sales through the app...
Quite like Nike... the time to build D2C and online has now gone.
Customers are back to demanding experiential brands offline, and are willing to pay a premium for such offerings.
So for once, stop and evaluate if you really want to raise money to build for scale, or build something smaller, nicher, that a tiny community loves to death, and charge a hefty premium for such an experiential offering.
-------------------------------------------------------------------------------------------------------------------------
Click here to subscribe to my YouTube channel: bit.ly/3cpTleK
-------------------------------------------------------------------------------------------------------------------------
Like, Share, Subscribe for more!
Follow me on my other social media handles for all updates, events and live sessions-
Instagram: / casarthakah. .
LinkedIn: / sarthak-ah. .
Website: www.casahuja.com/
-------------------------------------------------------------------------------------------------------------------------
A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.
Sarthak Ahuja