In Conclusion: The Fight for the Independent Coffeehouse

The following is the final product of my research this summer, not including the data from my Consumer Research Survey. If I had had more time, I would have gone more in-depth into my analysis of the quantitative data that I obtained, as well as work to account for extraneous variables in the success of the coffeehouses that I studied. I would like to study this topic in a with more time and tools for statistical analysis at a later time.

The Problem:

As of March 30, 2014, Starbucks Coffee has 20,519 stores open worldwide. Caribou Coffee has almost 500 in the United States. Peet’s Coffee and Tea has 15 locations just in the DC-Metropolitan area and is projected to continue swift growth. For an independent coffeehouse in the DC area, the competition is fierce not just from chains, but also from other independent coffeehouses. Potential owners need to start their endeavor well informed and researched. However, there is a dearth of information about the relevant factors that make an independent coffeehouse successful, or even what precisely consumers expect from such an establishment. As a result, I set out to analyze both what consumers desire from an independent coffeehouse and where those desires overlap with what successful independent coffeehouses are doing – an attempt to identify certain commonalities among successful coffeehouse which prospective owners can leverage in their own establishments and which current owners can use to improve their business.

Situation Analysis:

According to Standard & Poor’s Industry analysis of Food and non-alcoholic beverages, several trends are affecting the industry and will have an impact on the business of independent coffeehouses. First, the price of coffee beans imports is falling and is projected to continue falling for the immediate future. This trend means a higher profit margin on coffee and coffee-based products. Second, “the local food movement is on the rise in the US, with the direct-to-consumer marketing accounting for over $1.2 billion in sales annually. Farmers markets and community-supported agriculture are rising, as consumers shift to local food systems in an effort to find healthier, tastier, environmentally conscious, and energy-efficient alternatives to packaged food.” The local food movement also has an impact on consumer consciousness in other ways. As consumers are moving away from purchasing artificial products, products sourced across long distances, and large batch products from chains, they may simultaneously move towards purchasing more from small, local businesses such as local coffeehouses. Third, consumers are trending away from eating three larger meals at home and instead “have a number of small meals each day, rather than three larger meals, because of a lack of time”. Coffeehouses are ideal locations for these smaller meals if they choose to capitalize on this opportunity.

According to Standard & Poor’s industry analysis of Restaurants, which includes coffeehouses, consumers are trending towards choosing independent restaurants over chains much more frequently now than ever before. “…increasing health consciousness and expectations of high food quality are leading consumers toward independent restaurants. According to a study by Mintel Group Ltd., a global market research firm, consumers believe that independent restaurants offer better food quality and customized orders, as compared with chain restaurants.” In my opinion, the independent coffeehouse industry is entering a time when it will see a surge of new growth and success in the face of chains such as Starbucks. The S&P industry analysis also states that there has been a significant trend of increased coffee consumption among the American public over the past two to three years.

Consumers will generally choose one restaurant, or in this case, one coffeehouse over another for one of three reasons: value, quality, or convenience. I propose different second category, the idea of the “destination location” where the independent coffeehouse lacks convenience or value, yet offers some sufficiently enticing factor to consumers, including but not limited to quality. The independent coffeehouse may offer a superior product, a superior “atmosphere” (to be defined later), amenities for a certain demographic of consumers such as young families, or membership perks that make it worth the extra effort to travel to the coffeehouse.

For example, of the coffeehouses that I evaluated, 80% of them offered a differentiating factor other than value or convenience that had retained for them a loyal set of customers.

Two sourced their products only from local farms and roasted all their beans locally.

One is the only purveyor of a certain type of coffee beans on the East Coast.

One provided a back courtyard with tents, board games, bocce sets, and “fun foods” such as s’mores to appeal to young families.

Five served only fair-trade organic products.

Five had rotating specialty food and drink menus.

One had a board of 8 rotating exotic and rare coffees and 4 exotic and rare teas.

One was housed in a building with multiple rooms, one for the coffeehouse, one for a lounge, and three for local artisans to sell their products.

One donates 100% of profits to humanitarian projects.

These are simply a few cases of the “destination location” concept for the independent coffeehouse. I posit that to succeed in the DC-Metropolitan area, an independent coffeehouse must have a differentiating factor that makes them worth the sacrifice in value or convenience to the consumer (if such a sacrifice is necessary. I did encounter three independent coffeehouses that operate purely on a value and convenience level and did very well. However, they were all located in high-traffic areas in DC).     

The Method:

The method I followed in order to conduct my research was the following:

  1. Background research on coffeehouse history, the development internationally, the development in the United States, and the current state of the industry.
  2. Preliminary visits to the coffeehouses to conduct analyses on price, product, place, and promotion factors, as well as qualitative information.
  3. Follow-up visits to talk with coffeehouse owners and managers who agreed to be part of the study.
  4. Analysis of the commonalities among the independent coffeehouses and development of the consumer research survey on Qualtrics.
  5. Deployment of the consumer research survey. Collection of 115 consumer responses to questions regarding price, place, product and promotion.
  6. Comparison of commonalities among successful independent coffeehouses and the factors that consumers identified as most important to them in an independent coffeehouse during the consumer research survey.
  7. Compilation of a list of potential theories/recommendations as to what independent coffeehouse owners can do to be successful or better cater to consumers’ desires.


            First will be an analysis of the Consumer Research Survey, followed by qualitative analysis of the participating coffeehouses and discussion of the commonalities between the two sets of data.

The Consumer Research Survey consists of 115 respondents’ answers to a set of sixteen items that have to be ranked from 1 (Very Unimportant) to 5 (Very Important). Respondents then answered four free-response questions, and filled out demographic data sheets.

The demographic data is as follows:


            44 male respondents (39%)

70 female respondents (61%)

1 declined to answer


            9 respondents age 19 or younger (8.04%)

44 respondents ages 20-29 (39.3%)

8 respondents ages 30-39 (7.14%)

21 respondents ages 40-49 (18.75%)

31 respondents ages 50-59 (27.7%)

7 respondents ages 60-69 (6.25%)

3 respondents declined to answer


            16 respondents live in URBAN locales (14%)

91 respondents live in SUBURBAN locales (80%)

7 respondents live in RURAL locales (6%)

1 respondent declined to answer

Frequency of trips to coffeehouses:

            48% visit at least once a week to daily

26% visit 2-3 times a month

26% visit once a month or less

1 respondent declined to answer


Multiple-choice data:

Out of the sixteen multiple-choice items, the following emerged as statistically significant data points, listed in order of importance based on mean ranking:


Aspect of Coffeehouse Mean of Importance Ranking
Friendly staff


You enjoy the “atmosphere” (defined below)


Easily accessible location


Comfortable Seating


Ease of finding seating


Short wait time to be served


Prices are lower than competitors


Wide variety of drink options


Superior quality of pastries, muffins, etc.


Availability of pastries, muffins, etc.


Availability of health-conscious food items


Open all day, seven days a week


Provides a quiet work environment


Availability of local, organic, or fair trade products


Has a customer loyalty program (“buy 6, get 1 free”)


Superior quality of lunch and dinner food


Superior Quality of Espresso


Wide variety of food options


Availability of lunch and dinner food


Hosts live entertainment events


Has a social media presence


Availability of alcoholic beverages



Free-Response Insights:

1. What is the feature that influences your selection of a coffeehouse most strongly?

In response to this questions, several distinct themes emerged.

  • 39 respondents included an aspect of “atmosphere in their answer.
  • 48 respondents included the quality of the coffee
  • 14 respondents included the location (convenience)
  • 9 respondents included factors relating to availability and comfort of seating
  • 7 respondents included friendly staff

“Good music is key – Starbucks does this well.”

“You never asked about cleanliness: this is a make or break issue for any food establishment.”

“So important for baristas to know how to brew espresso. Customers can taste the difference when coffee is burnt. While I’m not one to return my beverage to be remade – I am much more likely to return when my beverage doesn’t have a burnt flavor.”


2. What do you wish that your favorite coffeehouse would do differently?

Although the responses to this question tended to be more scattered, respondents seemed to desire two changes from their favorite coffeehouses:

  • 26 stated that they want more seating and/or more comfortable seating
  • 25 stated that they want lower prices

“I frequent a handful of independent coffee shops and they’re all different, but the common factors are easily accessible from my home, good coffee, a good working environment (which includes a decent number of tables, good wifi, and lots of power outlets!), and a good atmosphere.”

3. What does “atmosphere” mean to you?

  • 32 respondents mentioned “good” music
  • 24 respondents described a “comfortable” environment
  • 22 respondents said “quiet”
  • 16 respondents said that the “décor” was important
  • 11 respondents mentioned friendly staff
  • 8 respondents mentioned the lighting as important

“Music, seating, lighting, and overall vibe.”

“I would define a coffeehouse’s “atmosphere” as the overall experience the coffeehouse imparts on a customer when he/she purchases and consumes their drink. To name a few examples, a coffeehouse with an agreeable atmosphere might have friendly staff, short waiting times, ambient and relaxing music.”

“Clean, quiet, decent seating.”

“Cozy, clean, comfy chairs.”

“For me, it is that it is unique, maybe showing the character of the owners and their creativity. Also, a well designed interior that is comfortable and invites you to stay and sit.”

“Cozy, comfortable, calming, just a good spot to relax, probably with warm colors and dimmer lighting.”

4. Do you ever prefer a chain like Starbucks to an independent coffeehouse? Why or why not?

35 respondents stated “Yes”, that they always or almost always prefer a chain to an independent coffeehouse due to convenience, familiarity, or quality.

“Starbucks is a purely functional experience for me. If I NEED coffee (I always do) and Starbucks is around I would spend money at Starbucks. I don’t think Starbucks drinks can match up to local coffee house drinks, especially when those coffee houses are roasting their own beans or using local roasters. I will also skip Starbucks if there is a local coffeehouse within 3-5 miles and I can access it.”

“I go to Starbucks 95% of the time because they consistently offer a good quality product and a pleasant ambience.”

“I prefer Starbucks because of their flexibility, quality of espresso drinks, and loyalty program.”

“Because I know what I’ll get there and it’s easy.”

“Chain for convenience.”

“…for the convenient locations.”

“I prefer it because it is a ‘standard fare’ all over the world.”

“…for consistency, variety, and speed of service.”

“More reliable.”

“…an independent shop is sometimes risky.”

“…when I’m concerned about service time and accessibility.”

“…there is a drive-through.”


Qualitative Analysis of the Participating Coffeehouses:      

            Throughout an analysis of 15 independent coffeehouses in the DC, Northern Virginia, and Southern Maryland areas, several patterns emerged. The first pattern differentiated two main types of coffeehouses from one another. Within both categories of coffeehouses, consistent trends then emerged in regard to the coffee/espresso, the food, and the availability and quality of seating. Common between both categories were the friendliness of the staff and the use of live entertainment to pull in customers. All of the following are the hypotheses of this researcher, and have not been corroborated by outside research entities.

There are two main types of coffeehouses in the DC-Metropolitan area. The first category will be known as “Turnover” coffeehouses. These establishments tend to exist in convenient, high-traffic locations such as on a street corner on Capitol Hill in DC. They offer little besides coffee and espresso-based drinks, but have extremely high quality products, convenience and fast service. The second category will be known as “Destination” coffeehouses. These establishments seem to be identifiable by their location in suburbia, usually a low-traffic area. They are a “terminal destination” for their customers, not a convenience along the way to a different destination. Thus, they tend to offer numerous amenities, a more comfortable environment, and a more extensive food menu, for example.

The quality of coffee/espresso seems to be emphasized most heavily in the coffeehouses that depend on turnover for financial survival. All except one of the coffeehouses studied by the researcher sourced organic, sustainable, fair trade coffee beans. Several of them advertised their local roasters, or in-house roasting. The Turnover coffeehouses similarly seem to train their baristas extensively about espresso: “We have a fairly intense training program that teaches the barista everything about espresso, from where the coffee beans come from to how to pull an excellent shot,” explained a manager interviewed by the researcher at a very popular “turnover” coffeehouse in Northwest DC. The same consistency of emphasis on the quality of the coffee exists in the Destination coffeehouses; however, there was much less consistent emphasis on espresso and the training of baristas. One coffeehouse in a suburban strip mall in Purcellville markets its high-quality Lavazza “super crema” espresso, but outside of that instance, the marketing of espresso seems to be more infrequent among Destination coffeehouses. Nevertheless, the Destination coffeehouses did publicize the quality of their coffee. In three out of five instances, it was roasted locally. In two out of five cases, it was organic or fair trade.

Both Turnover and Destination coffeehouses provide at least a basic selection of breakfast food, usually including pastries, muffins, yogurt, oatmeal, fruit, and breakfast sandwiches. In the majority of Turnover coffeehouses that this researcher analyzed, breakfast was the only meal offered; occasionally some sort of afternoon snacks such as nachos or light sandwiches are also available. In Destination coffeehouses, it seems that a full menu is the typical offering. Although options can be limited, Destination coffeehouses tend to have all of the following: breakfast, lunch, dinner, dessert, and snack options. The food tends to be custom-made, and in several of the coffeehouses visited by this researcher, the healthy, local, and organic options are a significant portion of the “destination” appeal. Seven of the ten Destination coffeehouses had a functional kitchen in the back of the coffeehouse and a full menu available to patrons.

The type and availability of seating marked the largest discrepancy between Turnover and Destination coffeehouses. Turnover coffeehouses had smaller spaces with very limited seating to encourage patrons to get their order to-go. The tables tend to be small and the chairs wood, metal, or plastic. In Destination coffeehouses, the spaces are usually larger. Therefore, a more varied selection of seating options is consistently available. For example, one particular coffeehouse in Leesburg, Virginia had tall tables with high chairs, bar seating, two large sections of lounge chairs, and several couches. Another Destination coffeehouse visited by this reporter is located in Purcellville, Virginia in a stand-alone building with multiple rooms, one of which is filled with hard chairs and tables, and the other constituting a lounge for patrons to relax. The seating arrangement is a quick way to make an assumption about whether a coffeehouse is Turnover or Destination.

In every coffeehouse included in this research, the friendliness of the staff seems to be emphasized in the public face of the coffeehouse, especially on social media. Employees take on a conversational “friend/family” relationship with customers. One manager interviewed gave a resounding “yes” to the question of whether the staff is encouraged to develop relationships with customers. In each coffeehouse, except for one where the manager had the television on full volume and actively watched it with his staff, the friendliness of the staff was noticeable to this researcher. I was checked on multiple times in several of them and engaged in conversations several times (these are case studies, and not facts about every independent coffeehouse).

The final pattern that emerged in both Turnover and Destination coffeehouses is the hosting and catering of live entertainment and events. In order to engage customers more than just when they come in for coffee, 12 out of 15 coffeehouses host live entertainment events on Friday and Saturday nights, if not more frequently. 8 out of 15 offered to cater events in some fashion, and 15 out of 15 sold boxes of coffee to go and pastries in bulk.

These patterns are based on the research and observation of this researcher in 15 coffeehouses within the DC-Metropolitan area, and are by no means conclusive data about the nature of independent coffeehouses as a whole.



Based on the consumer research and qualitative research of independent coffeehouses discussed above, the following section will posit a potential list of recommendations that prospective owners of independent coffeehouses in the DC-Metropolitan area should perhaps consider.

 1.     Quality of coffee is king.

            The most successful coffeehouses seem to be purchasing organic, fair trade coffee beans and roasting them locally or in-house.

2.     Friendliness and training of the staff is vitally important; hire carefully.  

            The staff contributes to the atmosphere of the coffeehouse, the first impression that customers receive when they walk in, and the last one they have when they leave. If interacting with the staff at a coffeehouse is unpleasant, customers will go elsewhere. With this principle in mind, it seems prudent to partially select employees based on personality and overall affability.

Training is also vital because it determines the taste and quality of the drinks and food, as well as employees’ receptiveness to re-making an order if a customer is displeased. Emphasize that this is a desired response.

3.     Figure out what “atmosphere” means in your area by talking to consumers, and then duplicate that in your coffeehouse.

            Based on the consumer research described above, “atmosphere” can be determined by (but is not limited to) the music choice, the décor, comfortable seating, friendly staff, soft lighting, and is quiet enough so that patrons can easily hold a conversation. However, “atmosphere” is particular to a certain group of patrons in a particular area, so make sure to do consumer research about your target market’s specific preferences and needs.

4.     If your location is not easily accessible, make your coffeehouse a destination.

            Whether customers come for the quality of the food, the specialty drinks, the homemade gelato, the outdoor courtyard with games, or something else entirely, give them a reason other than just coffee to make the extra effort to get to your coffeehouse worth the trouble.

When coffeehouses were first gaining prominence in Europe, each one had a distinct personality and type of amenity that it offered to its patrons. “Depending on the interests of their customers, some coffee-houses displayed commodity prices, share prices and shipping lists, whereas others provided foreign newsletters filled with coffee-house gossip from abroad” (“Coffee-houses…”).

5.     Availability of comfortable seating can make or break a coffeehouse.

Especially if you are opening a coffeehouse that depends on customers making combination purchases, such as food and a drink, or multiple drinks, then you need a place for them to sit and drink/eat. The type of seating available contributes to the “atmosphere” and perceived comfort of the coffeehouse. Unless you are in a high traffic area and focused entirely on turnover, having a lot of varied types of seating will help.

6.     Have limited food options available for each meal.

Having a full menu could be cost prohibitive. However, having a few options for each meal of the day, including a few healthy options, will expand the time frames when people choose to come in and the reasons that they come in for – it could potentially help your bottom line. Although in the consumer research, the availability of lunch and dinner food is not ranked highly, this researcher believes that its absence would become problematic to obtaining customers at those times of the day. Food items can also be rotated over time to keep the menu interesting.

“We introduce or promote new products monthly. These are typically items with a higher markup to help our overall bottom line,” said a manager of a coffeehouse on Capitol Hill in DC.

7.     Short wait time can help capture “convenience” driven customers who would otherwise choose a chain such as Starbucks.

Have a call-ahead and pick-up option for customers or a coffee-only line so that customers who are commuting to work do not have to wait behind several people who want specialty drinks or food.

8.     Offer something that makes customers feel like a part of the community.

Whether that is a loyalty program or a unique program like the one a coffeehouse in DC is pursuing, according to their manager: “We have discounts for people who bring in their own mug and we will sometimes discount pastries at the end of the night.”






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  1. Interesting and very thorough. I wonder if it would be useful to break down the responses of the consumer research survey by age to see if the desires vary across age ranges. Coffeehouses can then target those demographics that they wish to draw in the most. For instance, maybe live entertainment is more important for younger customers than for older, or the presence of wifi and outlets is less important for older customers, who are less likely to do work at coffeehouses. After reading about the differences in expectations and patterns, especially brand loyalty, between older consumers (Baby Boom-era parents and adults) and millenials, maybe it would benefit coffeehouses to know what each age demographic expects so they can address the concerns of the most profitable demographic.

  2. Sarah Nicholas says:

    How might you incorporate consistency and familiarity into these recommendations? Consumers often purchase products that fit into a groove of consistency from places that they are familiar with – people tend to avoid change when it comes to product purchases, especially when the products are for consumption.
    I am not entirely in agreement that people seek out a “community” within a coffee house – maybe that is why Starbucks and Caribou and Dunkin are so successful. Business at these chain locations is largely driven by those who can have personalized coffee without a personal experience; ie a drive-thru window or call ahead option. Not everyone wants coffee and a conversation.