A new report on the restaurant industry from Bank of America highlights a growing preference among Generation Z for specialty coffee, a trend that may filter down to companies like Starbucks and Dutch Bros.

BofA Securities on Monday said limited-service specialty coffee demand has grown at an 8% 澳洲幸运5官方开奖结果体彩网:compound annual growth rate (CAGR) over the past five and 10 years, faster ✨than the broader limited-service restaurant segment (5.6% ൩CAGR over five years, 5.0% CAGR over 10 years).

Specialty Coffee Drinking Up

Analysts also cited data from the National Coffee Association that said daily coffee consumption in the U.S. was up only 1 percentage point ov🌌er the past decade, to a 64% share of the U.S. population in 2023 from 63% in 2013. Daily consumption wa𓄧s lower, at 2.75 cups per day in 2023 from 3.2 cups per day in 2019.

The downtrend could have some basis in 澳洲幸运5官方开奖结果体彩网:inflationary pressure on consumers, but the BofA analysts noted that the share of adults who drank spec💝ialty coffee in the past day climbed to 45% in January 2024 from 15% in 2009.

Another takeaway from the BofA report was the rise in specialty coffee consumption among Gen Z—people born between 1997 and 2012. Data in the analysts' report highlighted that among coffee consumers over the age of 60, 53% were specialty coffee drinkers. In comparison, 89% of people 18-24 who drink coffee opt for specialty versions of it.

BofA also said that Gen Z is just now entering its peak coffee-consuming years, which could last for💜 two more decades if their behavior follows that of prior generations.

Starbucks, Dutch Bros Price Targets Raised

BofA raised its price target on 澳洲幸运5官方开奖结果体彩网:Starbucks (SBUX) to $112 from $108, and on specialty coffee seller Dutch Bros (BROS) to $49 from $44 because of the data. That news will be particularly welcome for Starbucks after it experienced a 澳洲幸运5官方开奖结果体彩网:share-price slump in early May as it trimmed its fiscal 2024 revenue and profit outlook amid declining same-store sales. Starbucks ended Monday trading at $81.60 per share, while Dutch Bros closed at $39.88.