Coffee wars
[1][2] In North America belligerents in these wars typically include large coffeehouses, such as Starbucks,[3] Dunkin',[3] McDonald's,[4] and Tim Hortons.
Periods of low economic activity and business recessions––which contribute to diminished consumer demand––have been linked to an increase in coffee wars.
Major innovations in the coffee industry, particularly the advent of single-serve espresso pods, have lowered the market's barrier to entry.
[10] In August 2018, Luckin signed a distribution deal with e-commerce group Alibaba to increase their online retail presence in China.
[17] Chinese consumers were boosting Luckin Coffee's market share as a rejection of American-led companies, specifically Starbucks.
"[12] Fearing a possible bankruptcy, Luckin Coffee customers flooded their online app with orders redeeming free drink vouchers leading to a temporary rise in market share.
[20] In October 2018, the Italian coffee proprietor Illy merged with the German JAB Holding Company to reconfigure its market share.
[1] The 2018 entrance of Starbucks and Nestlé into the Italian coffee market had Lavazza and Illy increase their merger and acquisition (M&A) activity.
[23] McDonald's began to compete directly with Tim Hortons' annual "Roll Up the Rim" contest, by introducing a semi-annual promotion of a free small coffee in 2010.
[38] However Starbucks chief executive Howard Schultz, a major proponent of coffee wars, voiced his concern about market saturation and vocally opposed the comparison between the McCafé and his firm's products.
[41] The Wall Street Journal reported in 2011 that the closer price points were for coffee the more competitive coffeehouses were with each other, in spite of different demographic markets.
"[43] In July 2011 Dunkin' Donuts went public on the U.S. stock market, raising $427.5 million to "heat up the fast-food java battle.
"[48] During that year's Starbucks annual meeting Schultz responded to Dunkin' market gains by telling shareholders to metaphorically bring the "sabers out.
[49] In 2013, The Motley Fool speculated that the spread of Starbucks' gift cards and national loyalty program was a primary driver in coffee-driven market gains.
[53] In March 2020, Panera Bread launched a coffee subscription service to compete directly with Starbucks' national loyalty program.
[54] The COVID-19 pandemic led to severe backsliding in market share for the largest coffeeshops, with smaller cafés closing permanently due to lack of demand.
[55] Most of the major players initiated distribution deals with delivery platforms during the pandemic to sustain growth: Uber Eats (Starbucks),[56] GrubHub (Dunkin'),[57] and DoorDash (McDonald's).
[64] In March 2016, Starbucks announced a partnership with Keurig to distribute Starbucks-branded pods in their brewers officially entering the market.
