For big brands, coffee market in Maine is ‘a dogfight’

Posted June 08, 2013, at 5:14 p.m.
Jamie Myers sits in his Tim Horton's franchise on Broadway in Bangor on Saturday. The Canadian chain has carved out a place for itself in Maine's increasingly competitive and crowded coffee market.
Mario Moretto | BDN
Jamie Myers sits in his Tim Horton's franchise on Broadway in Bangor on Saturday. The Canadian chain has carved out a place for itself in Maine's increasingly competitive and crowded coffee market.
Customers line up in front of a display case Saturday at the Broadway Tim Horton's in Bangor.
Mario Moretto | BDN
Customers line up in front of a display case Saturday at the Broadway Tim Horton's in Bangor.

BANGOR, Maine — There’s a war waging over your morning routine.

More than 80 percent of Americans drink coffee, and more than half of American adults drink it every day. Most coffee drinkers are particular about how they like their daily pick-me-up, and once they settle into a caffeinated ritual, they rarely break it.

The dedication with which we drink coffee — and frequent businesses that sell us our fix — makes each and every coffee-swilling American a hot commodity for retailers operating in an increasingly competitive market.

“There’s definitely coffee wars here in Maine at every level,” said Kristel Wagner, a spokeswoman for McDonald’s, recently. The Golden Arches may be known for burgers and fries, but in recent years they’ve made an aggressive push into the morning market.

And McDonald’s isn’t the only one. Mainers of a certain age will easily remember a time when Dunkin Donuts was the only name for coffee in the state. And while New England’s home-grown coffee giant is still the most prevalent brand in the state, others are edging into the market.

Aside from the growing number of independent, small cafes and micro-roasting operations, there are a handful of big players in Maine’s coffee landscape:

Topping the list is Dunkin Donuts, whose first store in Maine opened more than 50 years ago in Lewiston, with a whopping 141 locations throughout the state.

With 58 restaurants in Maine, McDonald’s now competes with the more coffee-centric brands after making a push with new products and specials.

The newcomer from the north, Tim Horton’s, opened its first Maine restaurant in South Portland in 1998. After a big growth spurt in the mid-aughts, it now has 30 franchise locations across the state.

Starbucks, the worldwide coffee behemoth, has a relatively limited presence in the Pine Tree State, with 15 corporate locations and 10 licensed cafes, such as those found inside Target. Unlike the other three companies listed here, which operate in all three of Maine’s designated market areas (Portland, Bangor and Presque Isle), Starbucks operates nearly exclusively in southern Maine.

In interviews with representatives for each company, none would provide any financial information broken down by state. Reputable data is hard to come by, but a widely cited 2012 study that suggests each American spends around $1,000 a year on coffee, shows there’s lots of money to be made, even in a state as small as Maine.

Jamie Myers is a franchisee for Tim Horton’s. He and his wife, Jayne, own restaurants in Bangor, Newport and Old Town. Myers was a big part of the company’s mid-2000s expansion in the state. His Newport location opened in 2006, and his restaurant was the Canadian brand’s first foray into the Bangor market.

Myers said getting people to try something new often requires giving the first cup away for free.

“We compete against a couple of giants who are very well known, but we’re able to hold our own,” he said Saturday. “We’re in a dogfight with all these brands. … The hardest thing for us to do, as the new player on the block, is to get people to try it. But if we can get them to try it, we can hook them.”

Myers also said that while Dunkin Donuts may seem like the obvious competitor for Tim Horton’s, McDonald’s is the restaurant on his radar.

“People will naturally think that’s Dunkin’s, because we both do coffee and breakfast, but McDonald’s is the much bigger competitor,” he said. ““We both do breakfast and lunch, we’re going after the same customer.”

McDonald’s made a bigger push into the coffee market in 2005, when it launched a New England-centric coffee campaign that began with the introduction of Newman’s Own Organic Coffee. Since then, the store has also introduced McCafe, a line of espresso-based drinks such as lattes and cappuccinos.

To win over even more coffee drinkers, for the past year, the company has given away any size hot coffee for just $1. Soon, they’ll do the same for iced coffee.

Many McDonald’s are even starting to look like cafes, with interior redesigns featuring armchairs, decorative lighting, wood-colored hues and free Wi-Fi. In an email, the company said its new design is meant to be more social, to allow customers to “linger.”

It’s a play straight out of Starbuck’s book. That company popularized the idea of the coffee shop as a “third place,” where people spend their time when they aren’t at work or at home..

Starbucks does not make franchise agreements, opting instead to control the brand entirely from its headquarters in Seattle. Efforts to speak with a spokesman this week were unsuccessful, but the company has expanded in recent years, especially in Portland. Just this spring, a new Starbucks opened on Commercial Street, just a five minute walk from the Middle Street location.

Myers said Starbucks is a different beast than the other companies. Starbucks has made its billions by billing its products as luxury items. Myers said that means they’re attracting a separate group of customers.

“There are a group of people out there who want to walk around with that little white cup and they think it’s a status symbol,” he said. “As much as we want to get every customer we can, that’s not really our customer.”

Dana Reid, field marketing manager for Dunkin Donuts, said that while the number of companies in the coffee market has grown, her company enjoys the benefits of longevity and affinity. Maine was the first state outside Massachusetts to have a Dunkin Donuts, and judging by the fact that there are more Dunkin Donuts than the other three brands combined, Mainers are sticking with what they know.

“Starbucks might be a little more premium and Tim Horton’s might be a little more Canadian, but Dunkin Donuts is the benchmark,” she said.

Follow Mario Moretto on Twitter at @riocarmine.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in Business