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Coffee Shop Industry Trends and Statistics in 2024

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Katherine BoyarskyAuthor

Coffee Shop Industry Trends and Statistics

Running a coffee shop is a busy job, but it’s a fun one, too. Juggling half a dozen tasks and chugging iced coffee are basically in the job description, along with managing and training a great team, staying up to date with coffee trends, sourcing coffee beans from roasters across the global market, and keeping track of coffee shop costs and their impact on the bottom line. 

Through the pandemic, coffee shops had to get creative to overcome challenge after challenge in an already narrow-margin business: lockdowns, capacity limits, case count surges, staff shortages, inflation, and coffee production issues related to the supply chain were just some of the hurdles to handle. Market trends were looking bleak, especially in 2020, and in many areas, through 2021 as well.

But in 2022, cafes have started finding their footing, after all — the consumption of coffee is an everyday habit for more than 60% of Americans. Through adjusting prices, trying new service models, getting into online ordering and preordering, embracing new types of tech, and leading their teams with extreme empathy, tens of thousands of cafes have made it through and continued to grow. 

We’ll get into the trends we saw in the coffee industry this year and how cafes all over the country overcame the challenges that were thrown at them.

Coffee shop industry market analysis

Overall, the coffee shop and cafe industry is steadily recovering.

U.S. coffee chain sales grew by 10% from June 2021 to June 2022, getting very close to reaching pre-pandemic sales. And chains expanded their footprint, growing the total market size: despite early-COVID closures and staff shortages, there are now 2.8% more branded coffee shops in the US than there were pre-pandemic. 

Branded coffee shops, like Starbucks and Dunkin’, still have significant market share in the U.S. coffee market, but independent cafes continue to open and become cornerstones of their communities.

Data for revenue in independent cafes is less consistently tracked, but their popularity with Millennials and Gen Z has helped keep many afloat. Over one-third of people aged 18-29 report having recently visited a coffee shop — while only one-quarter of older adults could say the same. Older Americans are much more likely to drink a cup of coffee from a drip maker at home, whereas younger people tend to try different coffee preparation methods. 

The coffee market in the U.S. as a whole is the largest in the world, bringing in an annual revenue of $80 billion. It’s easy to see how: the average American coffee consumption rate is 1.87 cups of coffee a day. With over 300 million Americans, that’s a lot of coffee! Though the most common location for coffee drinking is at home, followed by the office, cafes — and the baristas who work there — play a huge role in keeping Americans caffeinated.

Coffee consumption varies by age. Nearly half of people between the ages of 18-24 drink coffee, and nearly 70% of seniors do, too — and they drink more of it.

There’s variety in what kinds of coffee people choose to drink, too: When surveyed in 2021, 58% of Americans reported drinking coffee in the past day, with another 22% saying they’d drank espresso-based coffee beverages instead, like macchiatos, straight espresso, cappuccinos, lattes, and americanos. Overall, 29% of all coffee sales are for traditional coffee — as opposed to specialty coffee drinks like blended iced coffees.

Coffee industry trends that have taken hold

Pre-ordering (and online ordering) is still popular

Though the practice was already somewhat popular in corporate chains and in the busiest downtowns across the U.S., pre-ordering has become more and more widespread, even at independent coffee shops. 

The pandemic accelerated the adoption of online ordering technology in independent cafes, as customers were much more comfortable popping in and out to grab their drink, or even just taking it from a takeout window without going inside at all, as opposed to ordering at the coffee shop.

Customers quickly grew to love the convenience of ordering and paying for their coffee drinks (and maybe a little pastry) on their phones as they leave the house, and showing up to the cafe ready to grab their order and go — COVID or not — so online ordering has taken hold.

The labor shortage and the staffing crisis persist

Like every other sector in the hospitality industry, cafes continue to struggle with staffing shortages and high labor costs. It’s two sides of the same coin: The industry is struggling to hire staff, because thousands of cafe and other hospitality workers have left the industry over the course of the pandemic, and aren’t willing to come back for the same low pay and no benefits that were the norm before — so coffee shops have experimented with increasing their pay and benefits, which leads to higher labor costs. 

However, making peace with higher labor costs is worth it, as happy, well-paid employees have much more incentive to stick around, lowering your turnover and improving the level of institutional knowledge at your business. Providing a better-than-ever compensation structure, as well as a supportive work culture, also helps attract the best staff to your business and reduce employee turnover.

The main way that cafes have covered the cost of increasing pay — even with inventory costs skyrocketing because of inflation — is by raising their pricing. To that end:

Price increases are inevitable

Coffee shops, and other types of restaurants across the country, have had to increase their menu prices. Though many businesses hesitated to pass price increases onto the customer, for fear that it would scare away one-time visitors from becoming regulars, most have had no choice.

With everything from cardboard cup sleeves to oat milk costing much more than they did pre-pandemic, it’s the only way that businesses have been able to stay solvent — and even grow — during this tumultuous time.

Coffee has an excellent markup, so increasing the price by even 10% can make a big difference in how profitable each beverage is. Especially for cafes that also do food service, taking a data-driven approach to price increases helps to ensure every item is as profitable as possible without driving away customers.

Plant-based alternatives are everywhere

Cow’s milk may still be most people’s go-to, but oat milk and other non-dairy milks like soy milk and almond milk, are coming for the throne.

Milk alternatives have exploded in popularity in recent years. Requests for plant-based milk have become ubiquitous, whether it’s due to lactose intolerance, a preference to avoid dairy consumption, or veganism. And some consumers just prefer the taste of non-dairy milk to cow’s milk.

Almond milk still has the highest sales, but they marginally dropped in the past year. To contrast, refrigerated oat milk, which is newer on the scene but massively popular, saw sales that grew between 55-58% in the past year alone. It’s now in second place, dethroning soy milk which previously had the second-place spot.

Starbucks now offers a widely beloved Shaken Oat Milk Latte, and independent cafes have started offering alternative milks in any of their beverages. 

Tip fatigue is a myth

News outlets and individuals on social media have been complaining about “tip fatigue”, which is the concept of diners being done with tipping as generously as they had been doing throughout the pandemic. Supporting local businesses and employees was a popular priority, especially in the early days of COVID, but these reports say that people are getting fed up with paying big tips every time they go out. 

But current data shows that tip fatigue is actually a myth: Across the U.S., the average tip is 19.6% in full-service restaurants, and 16.9% in quick-service restaurants (like cafes). Understandably, people tip less when taking drinks or food to go, but the fact that they’re tipping at all still shows a willingness to help support local businesses. 

In other words, people are still tipping generously to help service workers make ends meet. In the current economic climate, where cost of living is so much more expensive than it once was, hospitality patrons who can afford paying a slightly bigger tip — especially if it helps keep the workers at their favorite businesses safe, housed, and fed — are continuing to do so. 

Consumer trends continue to favor iced beverages

Though the coffee industry market analysis above shows that a large swath of the population always seems to favor simple brewed coffee, coffee and tea trends continue to evolve — and particularly Millenials and Gen Z are loving trying out every new trend.

Some of the most popular coffee and tea trends in 2022 include: 

  • Mega-caffeinated and smooth in flavor, cold brew coffee is steeped in cold water for 12-24 hours, and young people can’t get enough.
  • Nitro cold brew is pushed through a canister with nitrous oxide, which yields a delicious cup of cold coffee topped with an ultra-smooth, frothy foam head. It looks like a Guinness.
  • As used in Korean dalgona coffee and Greek frappés, instant coffee is continuing to be more popular and desirable than it was pre-pandemic. Coffee shops rarely, if ever, sell plain instant coffee — instead, they whip it with sugar to create frothy, creamy, sweet iced or hot coffee beverages. 
  • Japanese matcha green tea is known for its grassy flavor, opaque bright green hue, and high caffeine content. It’s popular as is, as well as in matcha lattes and iced matchas.
  • Iced coffee is continuing to gain ground against hot coffee beverages: last year, Starbucks announced that their cold beverage sales were outpacing their hot coffee sales.  

Cafes are investing in technology and automation

Cafes and restaurants of all kinds are continuing to use and invest in next-level technology for their businesses, from POS systems with coffee shop pre-ordering capabilities built in, to restaurant apps, to inventory solutions that help with recipe costing and controllable cost management, to contactless payment terminals and QR codes that let customers order coffee and meals from the table, right on their phone. 

Restaurant technology has come a long way, and cafes can benefit greatly from modernizing their front- and back-of-house operations.

Coffee’s not going anywhere. How will you serve it in 2023?

Independent cafes, worldwide chains, and everything in between are continuing to fight their way through the challenges kicked off by the pandemic. 2022 came with unexpected hurdles — from COVID case count surges to supply chain crises and wild inflation — but coffee shop owners and staff have worked together to keep bringing great food and drinks to their loyal coffee drinkers every day.

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