How Local Coffee Chains Survive Alongside Starbucks

In America, it feels like you can't walk two blocks without crossing paths with a Starbucks. According to ScrapeHero, there are 16,397 locations of the coffee giant in the U.S. as of December 2023, with most of them in California, Texas, and Florida. With so many, it's a wonder that smaller cafés and coffee chains can even survive, but they do. While they may not boast the sheer numbers of the Seattle-based corporation, small coffee shops often have loyal followings. And, believe it or not, Starbucks played a role in this.

With the launch of its Frappuccinos, popular flavored lattes, and curiously named cup sizes in the 1990s, Starbucks completely changed coffee culture; it essentially made the masses fall in love with cups of joe, which likely contributed to why smaller coffee companies are able to continue thriving.

As reported by the Washington Post, the number of independent coffee shops in the country grew from 1,650 in 1990 to 31,490 in 2015. The fact that these numbers skyrocketed during Starbucks' growth period is no coincidence. In the same outlet, J.D. Merget, co-owner of Brooklyn-based Oslo Coffee suggested, "Starbucks is good enough to get [the public] addicted," adding that smaller shops can take things over from there, offering potentially better coffee and cozier atmospheres.

The coffee-drinking masses have largely grown to trust Starbucks; they know that they can pretty much get a consistent coffee drink at any given location around the world. This puts smaller coffeehouses in a predicament: How do they lure these loyal followers away from the familiar and into their own shops? For starters, look to Australia's independent cafes and how they handled the Starbucks influx in the year 2000.

As reported by Slate, the Australian market largely relied on its ability to brew excellent espresso, which is where most coffee drinks begin. Italian immigrants brought the art of espresso to Australia, and it's something that has stuck in the continent. If Starbucks is afraid of anything, it's Italian coffee because, let's face it, Italy sets the benchmark for great coffee. Consider this: As of 2023, there were a mere 31 Starbucks stores in Italy with the first one opening fairly recently, in 2018. For comparison's sake, there were 238 in France and 911 in the United Kingdom. Aussie cafes offered better coffee than Starbucks, which is largely why 61 of its 84 locations that opened in 2000 closed within a decade.

Simply put, if cafes can make better espresso than Starbucks, customers will take notice. Many small cafes have a concise menu, which helps baristas focus on quality, rather than quantity, providing a better experience overall.

When it comes to coffee in America, it's hardly just Starbucks versus the local coffee joint. There are obviously other very successful, large chains that have joined in the caffeinated beverage race, like Dunkin' and McDonald's. With these companies offering the same types of cold brew, blended, and seasonal drinks with prices that undercut not only Starbucks but some independent cafes as well, small businesses often find themselves overwhelmed with competition. 

But what these corporate giants have in common are often monotonous atmospheres that are forced to treat customers as mere numbers because of the volume of people they serve on any given day. They can't offer the kind of personal touches, one-on-one customer service, and comfortable atmospheres that the local shop around the corner can, and, according to Business Insider, this is what makes Starbucks shake in its boots. After all, they want to corner the market on that so-called third place.

Despite all of this, Starbucks is still the reigning champion when it comes to revenue. Investopedia has reported that, as of April 2023, Starbucks' gross revenue outnumbered McDonald's by $9 billion. It's clear: Starbucks isn't likely in danger of going kaput, so if you want to see your local coffeehouse not only survive but thrive, consider giving it your americano and mocha business from time to time. But don't be surprised if you never want to leave the comfy couch you find there.