How Important Is The Americas Segment To Starbucks?

by Trefis Team
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Starbucks‘s (NASDAQ: SBUX) Americas segment contributed $18.3 billion to its 2019 (ended September 2019) revenues, making up 69% of Starbucks’ $26.5 billion in revenues for 2019. The International segment’s contribution was about one-third of the Americas segment’s, and provided $6.2 billion, that is 23% of the $26.5 billion in total revenue the company generated in 2019. This Americas segment growth has been key to Starbucks’ 57% price appreciation in the last 3 years, further helped by increasing revenues and better margins. We discuss Starbucks’ valuation and Starbucks’ Revenue analysis in full, separately.

Below we discuss Starbucks’ business model, followed by sections that review past performance and focuses on the geographical segments the company generates its revenue from. Please visit our interactive dashboard – Where does Starbucks’ make money from?

Starbucks Business Model

What Does Starbucks offer?

  • Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in 78 markets. Formed in 1985, Starbucks purchases and roasts high-quality coffees that they sell, along with handcrafted coffee, tea, and other beverages, and a variety of high-quality food items through company-operated stores. They also sell a variety of coffee and tea products and license its trademarks through other channels such as licensed stores, grocery, and foodservice accounts. In addition to their flagship Starbucks Coffee brand, they sell goods and services under the following brands: Teavana, Seattle’s Best Coffee, Evolution Fresh, La Boulange, Ethos, Starbucks Reserve, and Princi.

Has 3 Operating Segments-

  • Americas, which is inclusive of the U.S., Canada, and Latin America: Americas segment include both company-operated and licensed stores. The Americas segment is the most mature business and has achieved significant scale.
  • International: China & Asia-Pacific (CAP), Europe, Middle East and Africa (EMEA) segments include both company-operated and licensed stores. Certain markets within the CAP and EMEA operations are either in various stages of development or undergoing transformations of their business models.
  • Channel Development: Channel Development segment includes roasted whole bean and ground coffees, Seattle’s Best Coffee ® , Starbucks- and Teavana-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino ® , Starbucks Doubleshot ® , Starbucks Refreshers ® beverages, and Teavana TM/MC iced tea, and other branded products sold worldwide outside of the company-operated and licensed stores.

What Are The Alternatives?

  • Major competitors are companies like Dunkin’ Brands, Luckin Coffee, and other coffee chains.

What Is The Basis of Competition?

  • The specialty coffee market is intensely competitive, including with respect to product quality, innovation, service, convenience, such as delivery service and mobile ordering, and price, and there is a continuous increase in competition in all these areas with the company’s channels and markets.

Starbucks’ Total Revenue has grown by 24.4% from $21.3 billion in 2016 to $26.5 billion in 2019

  • Starbucks’ Total Revenue has grown by 24.4% from $21.3 billion in 2016 to $26.5 billion in 2019 (ended September 2019) with the highest contribution to the increase in absolute terms coming from Americas Segment.
  • The Americas segment has seen the highest increase in absolute terms as the segment revenue increased by $3.5 billion from $14.8 billion in 2016 to $18.3 billion in 2019 (ended September 2019).
  • International segment has seen the highest increase in percentage terms as the segment revenue went up by 54.4% from $4 billion in 2016 to $6.2 billion in 2019 (ended September 2019).
  • Over the years the Channel Development and Corporate and others segment has seen a fall in revenue from $2.5 billion in 2016 to $2.1 billion in 2019 (ended September 2019).



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