The Food Scout

Raise your hand if you weren’t eating at least a bagel a day in the early 1990s.

If you lived or worked in an urban area, chances are you bought that bagel from a specialty bagel shop, where bagels were made fresh (gasp) daily. And you had numerous varieties to choose from, like chocolate chip, spinach asiago, blueberry, multigrain, cinnamon sugar, etc.

Bagels were a DESTINATION, and bagel shops proliferated around the country. But it wasn’t long before every restaurant from Burger King to Pancake House was selling bagels, and bagels stopped being the gourmet, fresh-baked delicacy they started as, and instead became more of a mass-produced bread staple to accompany other foods and beverages. Bagel shops began to struggle and expand their menu offerings, and consumers found cheaper and more convenient ways to get their bagel fix, if they still had one.

Now specialty coffee and coffeehouses seem to be headed down that same path. Don’t get me wrong. I’m not suggesting that coffee consumption is going to start dropping (as bagel consumption has), but upscale coffee destinations appear to be losing their appeal as places like McDonald’s and 7Eleven pour more premium, and cheaper, coffees, and consumers opt to make specialty coffee concoctions less of a daily habit. Heck, even the bagel stores like Einstein that have managed to hold on are repositioning themselves as a “cafe” concept that serves premium coffee.

And as I suspect that latecomers to the bagel trend failed to enjoy the wild growth and profit margins that attracted everyone to the category in the first place, it appears that McDonald’s saw a peak and decline in specialty coffee sales just a few weeks after introducing them in certain markets this summer, according to Wall St. Journal reports about internal documents.

Some would say that this shift from specialty coffee destinations to more convenient and value-priced coffee in recent months will shift back to the coffeehouses when consumers are feeling less conservative about their spending. But I say that consumers will have learned that they can have canned, bottled, home-brewed or QSR-made specialty coffee that’s good enough, and that those expensive destinations aren’t the only source of java magic. Even if consumers are ready to return in 6 to 12 months, those coffeehouses may not be able to wait that long.