Morgan Stanley on Wednesday said that Starbucks’ stranglehold on the high-end coffee market is here to stay, despite some big names getting into the business.
“Given the increasing importance of super premium chains to the category, investors–both public and private–are paying closer attention,” analyst John Glass said in a note.
“Many of the high profile artisanal ‘Third Wave’ coffee brands have yet to develop significant footprints relative to Starbucks, and most highlighted here are highly concentrated in the Northeast or the West Coast.”
While they might not make a dent in Starbucks’ business just yet, Morgan Stanley is still keeping tabs on them. Nestle, after all, paid $500 million for a majority stake in Blue Bottle Coffee, even though the chain only has 40 locations.
Here are some of the smaller coffee brands Morgan Stanley thinks could be making headlines soon:
Number of locations: 16
States: New York, Pennsylvania
Colectivo Coffee Roasters
Number of locations: 17
States: Wisconsin, Illinois
Number of locations: 18
States: Missouri, Georgia