Starbucks Competitors: Dunkin', McDonald's, and More

Starbucks (SBUX) is the world’s largest coffeehouse chain. With over 39,000 locations, it dominates the global coffee market. The company’s consolidated net revenues reflect strong demand and brand loyalty. Starbucks competes with major players like Dunkin’ Donuts and McDonald’s, standing out through its upscale, experience-driven approach. Meanwhile, Dunkin’ leans into its “All-American” image and McDonald’s attracts customers with its fast-food convenience. Each brand’s distinct strategy shapes its success in the competitive coffee and beverage industry.

Key Takeaways

Starbucks leads the coffee industry with over 39,000 locations around the world.
Dunkin', with 13,700 locations globally, was acquired by Inspire Brands.
McDonald's competes with Starbucks through its McCafe line, boasting over 41,000 locations globally.
Nestlé's Nespresso and Keurig Dr Pepper's products rival Starbucks in the in-home coffee market.
Tim Hortons, part of Restaurant Brands International, is a strong competitor in Canada with more than 4,500 locations.

Dunkin' Donuts: A Legacy Competitor to Starbucks

Dunkin' Donuts—founded in Massachusetts in 1950–peacefully co-existed with Starbucks for decades. When the spokesperson for the company's ad campaigns retired in the late 1990s, however, Dunkin began to transition away from coffee and in the direction of donuts. By the early 2000s, the company had introduced its first specialty coffee line and slowly began to make a name for itself as a destination coffee shop.

Fast Fact

As of 2024, Dunkin' Donuts has more than 13,700 restaurants in nearly 40 global markets.

In 2006, Dunkin' upped the ante and declared war against Starbucks when it launched its "America Runs on Dunkin'" ad campaign. While Starbucks has created an intentionally chic and upscale environment, Dunkin' Donuts represents itself as an All-American brand.

In December 2020, Inspire Brands completed an $11.3 billion acquisition of Dunkin' Brands. The coffee and donut chain now has more than 13,700 locations in 38 global markets.

As Inspire Brands—which also owns Arby’s, Buffalo Wild Wings, Jimmy John’s, and SONIC—is a private company, it is not required to publicly disclose many financial metrics, but the company reported $13.3 billion in Dunkin' sales during fiscal year 2023.

In February 2024, Bloomberg reported that Inspire Brands could be considering an initial public offering and could be valued at about $20 billion—which would still be well below Starbucks' $107.44 billion market cap.

How McDonald's Challenges Starbucks in the Coffee Market

McDonald's (MCD)—which surpasses Starbucks with a market cap of $199.77 billion—has long been known as a fast-food restaurant, but the global franchise joined in on the emerging coffee craze by introducing flavored and iced coffees in the mid-2000s. The McCafe menu has grown to about 20 different drink offerings.

Fast Fact

McDonald's operates more than 41,000 restaurants across 100 countries.

McDonald's reported that global sales grew 9% in fiscal year 2023 and grew over 30% since 2019, with total revenue reaching $25.49 billion for the year.

McDonald's remains committed to the long-term success of its coffee line, noting in its 2023 annual report that the company "continues to see a significant opportunity with coffee." The company has also said it faces "sustained, intense competition" from other fast-casual restaurants, as well as grocery stores, convenience stores, and coffee shops.

In 2023, McDonald's opened the first location of CosMc's, which it described as a "small-format, beverage-led concept." The CosMc's menu includes cold brew, a turmeric spiced latte, and blackberry mint green tea, posing more competition to the Starbucks drink selection. McDonald's said it planned to open 10 CosMc's locations by the end of 2024.

Tim Hortons: Canada's Coffee Powerhouse vs. Starbucks

Tim Hortons, a Canadian coffee and fast-food chain, is a subsidiary of Restaurant Brands International (QSR), a multinational fast-food holding company that also owns Burger King and Popeyes. Founded in 1964, Tim Hortons began as a donut shop before expanding its menu to include coffee, breakfast items, and lunch offerings. The brand quickly became a Canadian staple.

Tim Hortons had more than 4,500 locations as of June 2024. Restaurant Brands—with a market cap of $31.91 billion—reported system-wide sales growth of 12.2% in 2023, with Tim Hortons seeing sales growth of 11% that year. The chain reported total revenues of $3.97 billion for 2023.

Tim Hortons primarily operates in Canada, where the company says it is the largest restaurant chain, serving more than 5 million cups of coffee per day.

When it comes to product offerings, Tim Hortons is known for its coffee, donuts, and other baked goods. Starbucks offers a more diverse menu with a focus on specialty coffee beverages, including lattes, cappuccinos, and cold brews. The brand emphasizes premium, handcrafted drinks.

Competitors in In-Home Coffee Products

Nestlé and Its Impact on Starbucks' Coffee Market Share

Nespresso, a premium coffee brand, was launched by Nestlé (NESN) in 1986. It changed the way people consume coffee by introducing the concept of single-serve espresso. Nespresso offers a wide range of coffee capsules, and its business model is unique in that it primarily sells its products directly to consumers through its own boutiques, online platforms, and a subscription service.

In 2017, Nestle acquired a majority stake in Blue Bottle Coffee, a premium coffee chain with storefronts around the U.S., known for its high-quality beans and artisanal brewing methods. In 2018, Nestlé acquired the rights to sell Starbucks' packaged coffee and tea products globally and in 2022, Starbucks entered into an agreement to sell Seattle’s Best Coffee Brand to Nestlé, further strengthening its position in the coffee market.

Nestle is one of the largest food and beverage companies globally and a major competitor in the coffee product market. The company has a market cap of 229.53 billion Swiss Francs, which equates to about $265 billion.

Keurig Dr Pepper: Brewing Competition for Starbucks

Keurig is the flagship coffee brand of Keurig Dr Pepper (KDP), known for its single-serve brewing systems and K-Cup pods. Founded in 1992 as a division of Green Mountain Coffee Roasters, Keurig was a pioneer in the single-serve coffee market, changing the way people brew and consume coffee at home and in the office. The Keurig system allows users to brew a fresh cup of coffee in seconds by inserting a K-Cup pod into the machine, which is then punctured, brewed, and dispensed directly into a cup.

The brand offers an extensive range of K-Cup pods, featuring coffee from well-known brands like Starbucks, Dunkin’, and Green Mountain Coffee, as well as Keurig's own blends. Keurig has expanded its portfolio beyond coffee to include tea, hot chocolate, and other beverages.

Keurig has a market cap of $47.99 billion and reported revenue of $14.81 billion for fiscal year 2023.

Kraft Heinz's Maxwell House: A Traditional Rival for Starbucks

Maxwell House, founded in 1892 and now owned by Kraft Heinz (KHC) is one of the oldest and most recognizable coffee brands in the United States. The brand offers a range of coffee products, including ground coffee, instant coffee, and single-serve pods, catering to both traditional coffee drinkers and those seeking convenience.

The brand is widely available in grocery stores and online, making it a household staple. Despite the growth of specialty coffee and premium brands, Maxwell House remains popular due to its consistent quality, affordability, and strong brand.

Kraft Heinz currently has a market cap of $41.86 billion and reported revenue of $26.64 billion for fiscal year 2023.

Fast Fact

Kraft Heinz has previously evaluated whether or not to sell the Maxwell House product line. For now, the subsidiary remains with the company.

J.M. Smucker’s Coffee Portfolio Competing with Starbucks

The J.M. Smucker Company (SJM) is a significant player in the U.S. coffee market, with a diverse portfolio of well-known coffee brands, including Folgers, Dunkin’, and Café Bustelo. The company entered the coffee business in 2008 with the acquisition of Folgers from Procter & Gamble, marking a major expansion beyond its traditional spreads and condiments business.

Through a licensing partnership with Dunkin' Donuts, J.M. Smucker produces and distributes Dunkin’-branded coffee products for retail sale, including ground coffee, whole beans, and K-Cup pods. Café Bustelo was acquired by Smucker in 2011. Available in ground, brick-pack, and K-Cup pod formats, Café Bustelo is known for its rich, full-bodied flavor, making it a staple in many households that prefer a stronger coffee.

The J.M. Smucker Company has a market capitalization of $12.65 billion and reported revenue of $8.18 billion for fiscal year 2023.

Who Is Starbucks' Biggest International Competitor?

With physical locations around the world, Starbucks competes with McDonald's and Dunkin' Donuts in dozens of international storefronts.

How Does Starbucks Differentiate Itself From Competitors?

Starbucks differentiates itself by creating a "third home" value proposition. In addition to home and work, the company strives to have a welcoming, warm location for customers to consume their products. Alternatively, competitors like McDonald's and Dunkin' Donuts strive for lower prices for goods more likely to be consumed offsite.

How Much More Popular Is Starbucks Over Its Competition?

Starbucks is the largest coffee company in the world. With an annual revenue of over $‪35.95 billion, Starbucks has surpassed McDonald's, which has ‪an annual revenue of $25.49 billion.‬

The Bottom Line

Starbucks faces strong competition in its cafés and retail coffee products. In the café space, its main rivals include Dunkin’ Donuts and McDonald’s, while brands like Nespresso, Folgers, Keurig, and Maxwell House compete in packaged and at-home coffee offerings. This competitive landscape challenges Starbucks to maintain its market leadership across multiple channels.