Who Are Starbucks’ Main Competitors?

Founded in 1971, Starbucks (SBUX) has become the world's largest coffeehouse chain, with more than 39,000 stores worldwide and 381,000 employees. In recent years, the company—which has a market capitalization of $107.44 billion—has invested heavily in its brick-and-mortar locations by expanding its food options, remodeling its restaurants, and revamping its rewards program.

Like many other retail or restaurant companies, the company was negatively impacted by business restrictions implemented for COVID-19. Global store sales declined 14% and consolidated net revenues declined 11.3% from 2019 to 2020. But the coffee chain began to rebound in the following years. In 2021, global store sales increased 20% year-over-year, led by a strong 22% average increase in sales across all North American stores. Consolidated net revenues increased 24% to $29.1 billion for the year.

In fiscal year 2023, the company's consolidated net revenues rose 12%, reaching a record $36 billion, even as Starbucks faced boycotts that hurt its its business in the Middle East and the U.S. The company also reported an 8% increase in global store sales for 2023.

In August 2024, Starbucks announced that Brian Niccol, the CEO of Chipotle (CMG), would become its new CEO—a leadership change that came amid declining sales and rising prices in 2024.

Here's how the company stacks up against its competitors.

Dunkin' Donuts

Dunkin' Donuts—founded in Massachusetts in 1950–peacefully co-existed with Starbucks for decades. When the spokesperson for the company's ad campaigns retired in the late 1990s, however, Dunkin began to transition away from coffee and in the direction of donuts. By the early 2000s, the company had introduced its first specialty coffee line and slowly began to make a name for itself as a destination coffee shop.

In 2006, Dunkin' upped the ante and declared war against Starbucks when it launched its "America Runs on Dunkin'" ad campaign. While Starbucks has created an intentionally chic and upscale environment, Dunkin' Donuts represents itself as an All-American brand.

In December 2020, Inspire Brands completed an $11.3 billion acquisition of Dunkin' Brands. The coffee and donut chain now has more than 13,700 locations in 38 global markets.

As Inspire Brands—which also owns Arby’s, Buffalo Wild Wings, Jimmy John’s, and SONIC—is a private company, it is not required to publicly disclose many financial metrics, but the company reported $13.3 billion in Dunkin' sales during fiscal year 2023.

In February 2024, Bloomberg reported that Inspire Brands could be considering an initial public offering and could be valued at about $20 billion—which would still be well below Starbucks' $107.44 billion market cap.

McDonald’s

McDonald's (MCD)—which surpasses Starbucks with a market cap of $199.77 billion—has long been known as a fast-food restaurant, but the global franchise joined in on the emerging coffee craze by introducing flavored and iced coffees in the mid-2000s. The McCafe menu has grown to about 20 different drink offerings.

McDonald's reported that global sales grew 9% in fiscal year 2023 and grew over 30% since 2019, with total revenue reaching $25.49 billion for the year.

McDonald's remains committed to the long-term success of its coffee line, noting in its 2023 annual report that the company "continues to see a significant opportunity with coffee." The company has also said it faces "sustained, intense competition" from other fast-casual restaurants, as well as grocery stores, convenience stores, and coffee shops.

In 2023, McDonald's opened the first location of CosMc's, which it described as a "small-format, beverage-led concept." The CosMc's menu includes cold brew, a turmeric spiced latte, and blackberry mint green tea, posing more competition to the Starbucks drink selection. McDonald's said it planned to open 10 CosMc's locations by the end of 2024.

Tim Hortons

Tim Hortons, a Canadian coffee and fast-food chain, is a subsidiary of Restaurant Brands International (QSR), a multinational fast-food holding company that also owns Burger King and Popeyes. Founded in 1964, Tim Hortons began as a donut shop before expanding its menu to include coffee, breakfast items, and lunch offerings. The brand quickly became a Canadian staple.

Tim Hortons had more than 4,500 locations as of June 2024. Restaurant Brands—with a market cap of $31.91 billion—reported system-wide sales growth of 12.2% in 2023, with Tim Hortons seeing sales growth of 11% that year. The chain reported total revenues of $3.97 billion for 2023.

Tim Hortons primarily operates in Canada, where the company says it is the largest restaurant chain, serving more than 5 million cups of coffee per day.

When it comes to product offerings, Tim Hortons is known for its coffee, donuts, and other baked goods. Starbucks offers a more diverse menu with a focus on specialty coffee beverages, including lattes, cappuccinos, and cold brews. The brand emphasizes premium, handcrafted drinks.

Other Coffee Brands

Nestlé

Nespresso, a premium coffee brand, was launched by Nestlé (NESN) in 1986. It changed the way people consume coffee by introducing the concept of single-serve espresso. Nespresso offers a wide range of coffee capsules, and its business model is unique in that it primarily sells its products directly to consumers through its own boutiques, online platforms, and a subscription service.

In 2017, Nestle acquired a majority stake in Blue Bottle Coffee, a premium coffee chain with storefronts around the U.S., known for its high-quality beans and artisanal brewing methods. In 2018, Nestlé acquired the rights to sell Starbucks' packaged coffee and tea products globally and in 2022, Starbucks entered into an agreement to sell Seattle’s Best Coffee Brand to Nestlé, further strengthening its position in the coffee market.

Nestle is one of the largest food and beverage companies globally and a major competitor in the coffee product market. The company has a market cap of 229.53 billion Swiss Francs, which equates to about $265 billion.

Keurig Dr Pepper

Keurig is the flagship coffee brand of Keurig Dr Pepper (KDP), known for its single-serve brewing systems and K-Cup pods. Founded in 1992 as a division of Green Mountain Coffee Roasters, Keurig was a pioneer in the single-serve coffee market, changing the way people brew and consume coffee at home and in the office. The Keurig system allows users to brew a fresh cup of coffee in seconds by inserting a K-Cup pod into the machine, which is then punctured, brewed, and dispensed directly into a cup.

The brand offers an extensive range of K-Cup pods, featuring coffee from well-known brands like Starbucks, Dunkin’, and Green Mountain Coffee, as well as Keurig's own blends. Keurig has expanded its portfolio beyond coffee to include tea, hot chocolate, and other beverages.

Keurig has a market cap of $47.99 billion and reported revenue of $14.81 billion for fiscal year 2023.

Kraft Heinz

Maxwell House, founded in 1892 and now owned by Kraft Heinz (KHC) is one of the oldest and most recognizable coffee brands in the United States. The brand offers a range of coffee products, including ground coffee, instant coffee, and single-serve pods, catering to both traditional coffee drinkers and those seeking convenience.

The brand is widely available in grocery stores and online, making it a household staple. Despite the growth of specialty coffee and premium brands, Maxwell House remains popular due to its consistent quality, affordability, and strong brand.

Kraft Heinz currently has a market cap of $41.86 billion and reported revenue of $26.64 billion for fiscal year 2023.

J.M. Smucker Company

The J.M. Smucker Company (SJM) is a significant player in the U.S. coffee market, with a diverse portfolio of well-known coffee brands, including Folgers, Dunkin’, and Café Bustelo. The company entered the coffee business in 2008 with the acquisition of Folgers from Procter & Gamble, marking a major expansion beyond its traditional spreads and condiments business.

Through a licensing partnership with Dunkin' Donuts, J.M. Smucker produces and distributes Dunkin’-branded coffee products for retail sale, including ground coffee, whole beans, and K-Cup pods. Café Bustelo was acquired by Smucker in 2011. Available in ground, brick-pack, and K-Cup pod formats, Café Bustelo is known for its rich, full-bodied flavor, making it a staple in many households that prefer a stronger coffee.

The J.M. Smucker Company has a market capitalization of $12.65 billion and reported revenue of $8.18 billion for fiscal year 2023.

The Bottom Line

The coffee industry is characterized by intense competition, and Starbucks faces rivals that challenge its market dominance. Key competitors include Dunkin' Donuts and McDonald's. Starbucks also faces competition when it comes to coffee products available for purchase outside of brick-and-mortar cafes from brands like Nespresso, Folgers, Keurig, and Maxwell House.