Specialty Coffee Shops Market

Market Definition

Specialty coffee shops focus on serving high-quality coffee sourced from premium-grade beans. These shops emphasize meticulous sourcing, roasting, and brewing techniques to enhance the unique flavors of the coffee. They often prioritize direct trade relationships with coffee farmers, sustainable practices, and skilled barista craftsmanship to deliver an exceptional coffee experience.

Specialty coffee shops also offer a curated selection of brewing methods, such as pour-over, espresso-based drinks, and cold brew, catering to coffee enthusiasts seeking refined and distinctive flavors.

Specialty Coffee Shops Market Overview

The global specialty coffee shops market size was valued at USD 63.45 billion in 2023, which is estimated to be valued at USD 66.48 billion in 2024 and reach USD 96.58 billion by 2031, growing at a CAGR of 5.48% from 2024 to 2031.

The market is registering growth, due to rising consumer preference for high-quality, ethically sourced coffee and unique brewing methods. Increasing demand for premium coffee experiences, driven by younger demographics, is encouraging market expansion.

Additionally, the integration of digital ordering, mobile payments, and personalized loyalty programs is enhancing customer engagement, fostering brand loyalty, and driving specialty coffee shops.

Major companies operating in the specialty coffee shops industry are baristacoffee, Nestlé (BLUE BOTTLE COFFEE Inc.), Starbucks Coffee Company, Nero Holdings Ltd., Caribou Coffee Operating Co. Inc., Coffee Beanery, Costa, Doutor Coffee Co. Ltd., Ediya Co. Ltd., Retail Food Group (Gloria Jean's Gourmet Coffees Corp.), Luckin Coffee Holding Singapore Ptd. Ltd., Coffee Bros, Biggby Coffee, Café Coffee Day, The Coffee Bean & Tea Leaf, and PTT Public Company Limited (PTT) (Café Amazon).

The market is expanding as consumers increasingly demand high-quality coffee with distinct flavors and origins. Growing awareness of specialty-grade beans and artisanal brewing techniques has elevated consumer expectations, leading to higher sales of premium coffee.

Coffee enthusiasts seek ethically sourced beans and expertly crafted beverages, contributing to the expansion of specialty coffee establishments. The shift toward unique taste profiles, sustainability, and direct trade sourcing has strengthened the market’s appeal.

• In October 2023, a Costa Coffee study estimated that the Indian market segment shifting toward specialty coffee ranges between 20 to 25 million consumers. This indicates substantial market potential even with conservative projections.

Key Highlights:

1. The global specialty coffee shops industry size was valued at USD 63.45 billion in 2023.
2. The market is projected to grow at a CAGR of 5.48% from 2024 to 2031.
3. North America held a market share of 37.25% in 2023, with a valuation of USD 23.64 billion.
4. The espresso-based beverages segment garnered USD 28.08 billion in revenue in 2023.
5. The dine-in segment held 65.45% share of the market in 2023
6. The company-owned chains segment is expected to reach USD 47.56 billion by 2031.
7. The market in Asia Pacific is anticipated to grow at a CAGR of 6.37% during the forecast period.

Market Driver

"Expansion of Franchise and Independent Coffee Chains"

The specialty coffee shops market has registered rapid growth, due to the expansion of both franchise and independent coffee chains. Established specialty coffee brands are scaling operations through strategic franchising, increasing their presence in high-demand regions.

• Allegra World Coffee Portal’s Project Café UK report in January 2025 reveals that the UK branded coffee shop market, valued at approximately USD 7.7 billion, expanded by 5.2% in 2024, reaching 11,456 outlets.

Independent coffee shops, emphasizing artisanal approaches and unique brand identities, are gaining traction among niche consumer segments. Diversified store formats, including drive-throughs, pop-up shops, and hybrid café-retail spaces, have further enhanced accessibility.

• In January 2025, Malaysia’s ZUS Coffee announced plans to launch 150 new stores across the Philippines. Having entered the market in September 2023, the coffee chain, which operates over 600 outlets in Malaysia, opened its 100th Philippine location in February 2025 with a new store at Starmall EDSA-Shaw.

Market Challenge

"Supply Chain Disruptions and Sourcing Challenges Hinders Market Expansion"

The specialty coffee shops market faces significant challenges, due to supply chain disruptions and sourcing complexities. Climate change, geopolitical instability, and fluctuating coffee bean prices impact the availability and cost of high-quality beans. These disruptions create inconsistencies in supply, affecting profitability and operational efficiency.

Market players are strengthening direct trade relationships with farmers, investing in sustainable sourcing practices, and diversifying supplier networks. Additionally, advancements in technology, such as blockchain for supply chain transparency and AI-driven demand forecasting, are helping businesses mitigate risks. Specialty coffee brands ensure a stable and ethical supply chain by adopting these strategies.

Market Trend

"Growing Coffee Culture and Third-wave Movement"

The global rise of coffee culture and the third-wave coffee movement have significantly contributed to the growth of the specialty coffee shops market.

• In January 2025, British Coffee Association highlighted that 80% of people visit coffee shops at least once a week, while 16% visit daily, reflecting the strong consumer demand for coffee shop experiences.

This movement emphasizes quality, sustainability, and transparency in sourcing, fostering a deep appreciation for coffee craftsmanship. Consumers are engaging more with baristas, exploring single-origin beans, and experimenting with various brewing methods.

The demand for elevated coffee experiences has pushed specialty coffee shops to innovate and refine their offerings. As the third-wave movement continues to gain momentum, more coffee establishments are focusing on exceptional quality and ethical sourcing, strengthening the market’s expansion and consumer loyalty.

• Third Wave Coffee's 2024 report highlights the preferences of over 7 million customers served throughout the year. With 7.1 million cups brewed across its cafés, the brand showcases India's increasing inclination toward specialty coffee. Notably, 5.4 million customers visited Third Wave Coffee locations nationwide, a figure comparable to Singapore’s entire population.

Specialty Coffee Shops Market Report Snapshot

Segmentation	Details
By Product Type	Espresso-based Beverages, Brewed Coffee, Cold Brew & Iced Coffee, Specialty Blends & Single-origin, Ready-to-Drink (RTD) Coffee
By Service Type	Dine-in, Takeaway, Drive-thru, Online Delivery
By Distribution Channel	Company-owned Chains, Franchise Stores, Independent Specialty Coffee Shops
By Region	North America: U.S., Canada, Mexico
	Europe: France, UK, Spain, Germany, Italy, Russia, Rest of Europe
	Asia Pacific: China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia Pacific
	Middle East & Africa: Turkey, UAE, Saudi Arabia, South Africa, Rest of Middle East & Africa
	South America: Brazil, Argentina, Rest of South America

Market Segmentation:

• By Product Type (Espresso-based Beverages, Brewed Coffee, Cold Brew & Iced Coffee, Specialty Blends & Single-origin, and Ready-to-Drink (RTD) Coffee): The espresso-based beverages segment earned USD 28.08 billion in 2023, due to strong consumer preference for high-quality coffee, customizable coffee options, and widespread availability across premium & mainstream cafés.
• By Service Type (Dine-in, Takeaway, Drive-thru, and Online Delivery): The dine-in segment held 65.45% share of the market in 2023, due to the growing consumer preference for premium café experiences, social interactions, and a curated ambiance.
• By Distribution Channel (Company-owned Chains, Franchise Stores, Independent Specialty Coffee Shops): The company-owned chains segment is projected to reach USD 47.56 billion by 2031, owing to its strong brand consistency, streamlined operations, and direct control over product quality, pricing strategies, and customer experience.

Specialty Coffee Shops Market Regional Analysis

Based on region, the global market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

North America accounted for around 37.25% share of the specialty coffee shops market in 2023, with a valuation of USD 23.64 billion. The dominance of well-established specialty coffee brands in North America significantly boosts the market. Companies such as Starbucks, Blue Bottle, and Intelligentsia have set industry standards with innovative product offerings, high brand loyalty, and extensive store networks.

Additionally, the growing preference for high-quality, ethically sourced coffee is fueling the market in North America. The rising demand for high-quality coffee in workplaces and travel hubs is encouraging brands to establish outlets in high-footfall areas.

• A 2023 report by the Coffee Association of Canada revealed that 71% of Canadians consume coffee daily, surpassing the U.S. figure by 6%. Additionally, 20% of Canadian coffee drinkers reported purchasing at least one specialty coffee per week.

The specialty coffee shops industry in Asia Pacific is poised for significant growth at a robust CAGR of 6.37% over the forecast period. The market in Asia Pacific is registering rapid expansion, driven by both homegrown brands and global coffee chains.

Companies such as Luckin Coffee in China and ZUS Coffee in Malaysia are aggressively scaling their operations through franchise models and digital-first strategies. Meanwhile, international brands are increasing their footprint through strategic partnerships and regional investments. This intensified market competition is enhancing accessibility to specialty coffee, fueling industry growth across metropolitan and tier-2 cities.

Moreover, the rising popularity of Western coffee culture is accelerating the adoption of specialty coffee across Asia Pacific. Younger consumers, particularly in urban areas, are embracing café lifestyles that emphasize socialization, work-friendly environments, and premium coffee experiences.

International brands such as Starbucks, Blue Bottle, and Arabica have played a pivotal role in shaping consumer preferences, while local specialty coffee chains are leveraging this trend by introducing innovative brews and unique café concepts to attract a broader audience.

Regulatory Framework Also Plays a Significant Role in Shaping the Market

• In the U.S., coffee shops must obtain a food service license from local health departments, which conduct regular inspections to ensure compliance with food safety standards. The Fair Labor Standards Act (FLSA) oversees compliance with federal and state labor laws, including minimum wage, overtime pay, and child labor regulations.
• In the UK, coffee shops are required to register with their local authority at least 28 days before commencing operations. They must comply with the Food Safety Act 1990 and the Food Hygiene (England) Regulations 2006, which mandate strict food hygiene practices and regular inspections.
• In Germany, coffee shops must adhere to the Lebensmittel- und Futtermittelgesetzbuch (Food and Feed Code), which enforces strict hygiene standards. Businesses are required to register with local trade offices and may need to obtain a Gaststättenerlaubnis (restaurant license) if serving alcohol. Compliance with the European Union's (EU) new deforestation regulation, effective from December 30, 2024, is also crucial, as it impacts commodities like coffee.
• In Japan, coffee shops are required to obtain an Inshokuten Eigyo Permit (restaurant business license) and comply with the Food Sanitation Act. Approval from local fire departments is also necessary to ensure safety compliance.

Competitive Landscape:

The global specialty coffee shops industry is characterized by a large number of participants, including both established corporations and rising organizations. Companies are implementing strategies such as business expansion and strategic partnerships to strengthen their market presence, driving the market.

Establishing new outlets in high-demand locations allows brands to cater to evolving consumer preferences and capture a larger customer base. Collaborations with suppliers, technology firms, and delivery platforms enhance operational efficiency, streamline supply chains, and improve customer engagement.

These strategic initiatives increase brand visibility and create a competitive advantage, enabling businesses to scale operations effectively and meet the rising demand for specialty coffee, contributing to overall market expansion.

• In January 2025, Coffee Island, Greece’s largest coffee chain, announced plans to expand into the South Asian market with 20 new outlets by March 2026 and a total of 250 by 2029. The company aims to establish a strong presence in India, targeting major metropolitan cities such as Delhi NCR, Mumbai, Bengaluru, and Hyderabad for its initial expansion. With a long-term vision of operating 250 outlets across the country by 2029, Coffee Island is strategically positioning itself to tap into the growing demand for specialty coffee in the region.

List of Key Companies in Specialty Coffee Shops Market:

• baristacoffee
• Nestlé (BLUE BOTTLE COFFEE Inc.)
• Starbucks Coffee Company
• Nero Holdings Ltd.
• Caribou Coffee Operating Co. Inc.
• Coffee Beanery
• Costa
• Doutor Coffee Co. Ltd.
• Ediya Co. Ltd.
• Retail Food Group (Gloria Jean's Gourmet Coffees Corp.)
• Luckin Coffee Holding Singapore Ptd. Ltd.
• Coffee Bros
• Biggby Coffee
• Café Coffee Day
• The Coffee Bean & Tea Leaf
• PTT Public Company Limited (PTT) (Café Amazon)

Recent Developments (Expansion)

• In January 2025, Ediya Coffee announced its expansion into Southeast Asia through a partnership with Vientiane-based Kolao Group, aiming to establish its presence in Laos, Cambodia, and Myanmar.
• In December 2024, Ediya Coffee entered the Malaysian market with a two-story drive-through outlet at Kuala Lumpur’s Elmina Lakeside Mall. Following a master franchise agreement signed in June 2024, the brand aims to establish a strong presence in the country, targeting 200 locations through partnerships with a consortium of local food service companies and distributors.
• In October 2024, Luckin Coffee revealed plans to expand into the U.S., focusing on cities with significant Chinese student and tourist populations, such as New York. The company aims to differentiate itself in the market by offering beverages at competitive prices, ranging from USD 2 to USD 3, to attract cost-conscious consumers.