How Emerging Coffee Brands Challenged Starbucks And Dunkin's Dominance – CoffeeTalk

The coffee industry has experienced a significant shift in recent years, with several emerging and mid-sized chains challenging the dominance of Starbucks and Dunkin’. Technonomic’s 2025 Top 500 Restaurants data reveals this dramatic shift, with Starbucks and Dunkin’ now ranking near the bottom in both sales and unit percentage growth. Starbucks was among just 12% of top coffee chains with negative sales growth, posting a -0.5% decline last year.

The coffee segment is also taking up more real estate on the Top 500 list this year, expanding from 19 to 24 concepts, demonstrating the segment’s rapid growth. This is a shakeup for the caffeinated segment, as industry stalwarts like Starbucks, Dunkin’, Tim Hortons, and Peet’s Coffee fall behind newer competitors.

San Diego-based Better Buzz Coffee, Florida’s Ellianos Coffee Company, Colorado’s Ziggi’s Coffee, and the fast-expanding Korean export Paris Baguette led coffee performance in 2024. 7 Brew Drive Thru Coffee, at the top of the list, achieved 163% sales growth in 2024, nearly double the next-highest chain in the Top 500 overall for the second year in a row. The two-to-one ratio between sales and unit growth shows 7 Brew’s measured development strategy, avoiding overexpansion.

Dutch Bros, another drive-thru coffee chain, has a strong Midwest suburban and rural presence with a focus on drive-thru and creative beverages that are popular with Gen Z. While Dutch Bros’ performance in the top 500 was more middle of the pack this year, the company’s nearly 26% sales growth and 18%-unit growth indicate that its strategy is working. Dutch Bros could become even more of a threat to Starbucks and Dunkin’ as it tests out breakfast items.

Better Buzz is another drive-thru coffee chain with creative drink offerings. The Californian bee-themed brand may only have 32 locations, but it is the second fastest-growing coffee chain after 7 Brew. Better Buzz offers more of a balance between the high-energy convenience of 7 Brew and Dutch Bros and a traditional café vibe, with most locations offering full seating and a drive-thru lane.

As the coffee segment trends toward quick convenience, Starbucks CEO Brian Niccol is betting on a different vision for the top coffee chain’s future: the old-school, cozy café experience. Only time will tell if this countercurrent strategy pays off.

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