What Makes Expanding a Coffee Brand to New Locations So Tough?

If there’s one industry that’s puzzled entrepreneurs for a while, it’s the unpredictable nature of coffee chains. This is surprising, considering the scale of the overall industry. As Grand View Research notes, the global coffee market size was estimated to be worth over $269.27 billion in 2024. They project that over the next five years, it should grow at a 5.3% CAGR to be worth $369.46 billion in 2030.

It’s easy to have the assumption that demand is the only factor that determines if a new location will work. However, this is not the case. There are several strategic factors that underlie the success of coffee chain businesses, especially during expansion. In this article, we’ll look at how and why success for brands in this field can feel so hit and miss.

The Very Real Cultural Differences and the Impact They Have

You can already imagine that a New York brand might not have the easiest cultural match when opening up locations in the Middle East. That said, even with similar cultures, you can never be 100% sure that new branches will succeed.

Everyone has heard of Starbucks’ failure in Australia by now. That said, did you know that even in recent years, they still haven’t figured out a way to make it work? One article from The Guardian shows that in 2024, Starbucks in Australia reported a $5.8 million financial loss. The company blamed this on “major macro environmental challenges,” which alluded to rising cost-of-living pressures.

As Remote, a global HR and payroll platform, explains, this is a factor in many fields. They point out how a lot of fintech companies are expanding into markets where engineering and product development are more popular. As a result, brands don’t understand what kind of message works best. Thus, cultural differences and solutions are something you very much want to consider.

It Takes a Lot of Effort To Launch at a New Location

Coffee operations thinking about expanding really have to crunch a ton of data and deal with unfamiliar regulations. On one hand, this can involve your typical business assessment factors like population density, buying trends, and competitor analysis. At the same time, you also have to deal with the logistics that come with setting up operations in a new place, especially if it’s abroad.

For instance, say you’re an American coffee brand and are thinking of setting up stores in the U.K. On the surface, it’s a great idea. Data from Lumina Intelligence shows that the U.K. coffee market saw a 7.1% growth in 2025. To be specific, franchise models and premium brands drove a growth of 2.4% of 12,229 outlets. What’s more, out-of-home coffee occasions in the country had reached 15.1% this year.

However, the ground realities are so much more complex. Just the handling of employment might involve a great deal of work. Sometimes, your only option might be to look for EOR services in UK. that know how to operate within local laws.

According to Remote, EOR services stand for “Employer of Record,” and it’s a service that helps businesses handle employment on your behalf.  As you can see, employment is just one of the many factors that make expansion tricky. Let’s look at a few more.

There’s a Lot of Invisible Work Behind Coffee Branches

It’s easy to forget that with a lot of chains, the brand culture is often a key factor in success. It’s not unheard of for culture injection rituals to be needed where baristas are drilled heavily on how to maintain the ‘brand image’.

Staff are trained on how long to smile and what kind of tone to take with students vs. the office workers. Likewise, they’re taught how long to actually maintain eye contact and how to upsell without being salesy.

Similarly, the work involved in getting even trained baristas to understand your brand’s recipes takes time and practice. Finally, if you thought that handling inventory and supply chain was tough, wait till a branch in another country needs help with it remotely.

Sure, these sound like singular challenges in the grand scale of things, but each factor adds up to make the overall experience of setting up new branches challenging.

At the end of the day, it’s still a highly competitive field where even giants like Starbucks have struggled. Typically, the more control you want to exert over your brand image and operations, the harder it is to set up new branches. On the contrary, if you’re willing to be a little flexible with enforcing strict brand standards, yes, things can get a little more manageable.