Treat yo' self... A pair of coffee stocks are enjoying record highs — Dunkin' is up 29% this year and Starbucks has risen 30%. An analyst who doesn't even drink coffee (more of a "tea and hot chocolate" guy) just upgraded where he thinks Dunkin's shares can go thanks to a 4-part java strategy.
"I'll have what she's having" — Starbucks... It looks like Dunkin's rival ordered the same 4-part coffee growth plan:
- Streamlined menus: The faster customers can figure out what obscure Arabica bean combo they want, "the happier they'll be" (according to one of Starbucks' menu engineers).
- More espresso-based drinks: For the 1st time ever, consumers under 35 drank more espresso drinks (like lattés) than hot drip coffee, in 2017.
- Super loyalty programs: We're talking "MCommerce." Mobile commerce. The ability to see a full menu, order ahead, and gamify buying with rewards leads to orders that are bigger and more frequent.
- Tech delivery partnerships: Both coffee brands signed delivery deals with Grubhub.
Coffee consumption isn’t a commodity... Oil, copper, coffee — All commodities because they aren't differentiated (one bean's pretty much the same as another). But coffee-buying experiences are different. Through apps, delivery, and Zombie Frappuccino, Starbucks and Dunkin' can charge a premium for coffee, thereby un-commodifying it.
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