Florida Gov. Ron DeSantis (R) on Monday urged young Americans to ditch sugary coffee concoctions and opt for plain brews, weighing in after a report found that younger drinkers are increasingly preferring sweet, flavored beverages.
DeSantis Pushes Simpler, Cheaper Coffee Habits
"I humbly recommend to young people to try drinking black coffee without any bells and whistles. It's cheaper — and once you get used to it you will not want to add in all the other stuff," DeSantis wrote on X.
Gen Z Tastes Challenge Coffee Market Leaders
The Journal's analysis said evolving tastes, especially among Gen Z, are fueling growth for Starbucks Corp.'s (NASDAQ:SBUX) rivals built around colorful, customizable drinks. Dutch Bros Inc. (NYSE:BROS), a Pacific Northwest chain with approximately 1,000 drive-thru locations, has leaned into this shift, with about half of its frequent customers being Gen Z or millennials, and 94% of its orders being cold, according to the report.
For now, Starbucks and Dunkin Brands Group Inc. (NASDAQ:DNKN) still control about 85% of the U.S. coffee market by sales, according to Morgan Stanley data cited by the report, but a new wave of competitors and fast-food chains adding profitable caffeinated beverages are challenging the category leader.
DeSantis's pitch also nodded to price. U.S. retail coffee costs have climbed sharply. Government figures show the average price of a pound of ground coffee in September was $9.14, up 41% from a year earlier, amid poor harvests and higher import duties.
Why It Matters
Starbucks, meanwhile, just posted its first positive global same-store sales in nearly two years, though U.S. comps were flat. The company has emphasized service fixes and product tweaks as part of a wider turnaround.
In a separate strategic move, Starbucks agreed to sell a 60% stake in its China retail business to Boyu Capital in a $4 billion deal, retaining brand ownership and a 40% stake as a joint venture seeks renewed growth amid fierce local competition.
Price Action: Starbucks shares were up 0.36% in after-hours, trading at $81.25 at the time of publication on Tuesday, according to Benzinga Pro.
Benzinga's Edge Stock Rankings show poor scores in the SBUX's Momentum, Value, and Growth scores, with a negative price trend across short, medium, and long terms. Here’s how it stacks up against other coffee rivals.
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