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2017 Top 100: Beverage-Snack grows Top 100 impact

Sizeable divide between leaders and middle of pack

This is part of the Nation’s Restaurant News annual Top 100 report, a proprietary ranking of the foodservice industry’s largest restaurant chains and parent companies.

The Beverage-Snack segment claimed 11.1 percent of the systemwide sales pie for the Top 100 during the Latest Year with six chains making the cut.

Starbucks Coffee once again led the category in market share, moving up 1.1 percent in the Latest Year to claim 62.7 percent, and also posted a leading 7 percent growth in Estimated Sales Per Unit.  

Systemwide sales clocked in at $17.9 billion. That’s up from nearly $16 billion from the Preceding Year and just under $14 billion from the Prior Year. 

The numbers were strong enough to land Starbucks in the second slot on the overall Top 100 charts for systemwide sales, right behind McDonald’s.

Though its closest competitor, Dunkin’ Donuts, slid downwards 0.7 percent to claim only 28.8 percent of the Beverage-Snack segment, the stat doesn’t tell the whole story of the coffee chain’s performance.

Dunkin’ Donuts ranked seventh overall in Top 100 systemwide sales, hitting $8.2 billion in the Latest Year, up from $7.6 billion the Preceding Year. That’s nearly an 8 percent jump.

Dunkin’ also added 397 domestic locations during the Latest Year, trailing Starbucks’ net 651 new U.S. stores.

While Starbucks may be tightening its hold on the Beverage-Snack segment, it’s not due to Dunkin’ failing to expand in its own right. 

Dunkin’ Donuts plans to streamline its menu to combat high employee turnover rates and to ensure guests are served efficiently. In February, 300 stores took part in menu tests, and franchisees reported the prototype made it easier to train personnel. 

Store owners also feel that simpler training will lead to higher retention rates.

“The average labor turnover rate in our industry is greater than 150 percent,” Dunkin’ Donuts CEO Nigel Travis said while discussing results of the chain’s first quarter ended April 1.

By reducing this rate, Dunkin’ believes that it can improve the guest experience by maintaining efficiency throughout the year.

A recently introduced ready-to-drink retail line of iced coffee may also boost Dunkin’s in-store sales in the near future due to the convenience factor that comes with grab-and-go options. However, the greater impact will likely be felt at other points of sale such as convenience stores. 

Starbucks will not be easing off the throttle, however.

Executive chairman Howard Schultz discussed building the store’s premium sub-brands at Starbucks’ biennial investor conference in New York City in late 2016.

The company will focus on the premium Roastery and Starbucks Reserve stores, which he said will offer a higher level of design and service.

The Roastery concept elevates the brand with more brewing methods, more intimacy with customers and more design theater, Schultz said. He aims to create an experience that is a “magical carpet ride” for consumers. 

The Roastery also has an average ticket that is four times larger than an average Starbucks store, he said, and could create a new source of growth and revenue for the company.

The Starbucks Reserve stores will be smaller, covering about 3,000 to 4,000 square feet, borrowing artisanal food preparation from Princi, the Italian bakery and café concept in which Starbucks invested last July. 

Krispy Kreme Doughnuts remains third in the Beverage-Snack segment but it’s a canyon away from the gold and silver medal holders on the Top 100 systemwide sales big board.

Gaining one spot to climb to No. 67 overall, Krispy Kreme brought in $761 million in estimated systemwide sales. The brand is gaining ground, climbing upward from just over $708 million the Preceding Year and nearly $660 million the Prior Year. 

Krispy Kreme can claim only 2.7 percent of the Top 100 Beverage-Snack market, which is slightly below flat from the Preceding Year’s performance.  

Contact: @DanAMX
Email: [email protected]

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