Perking Up: The Coffee Economy Awakes

PERKING UP: THE COFFEE ECONOMY AWAKES AFTER A RECESSION-FUELED LULL IN 2009, SPENDING AT COFFEE SHOPS HAS REBOUNDED STEADILY OVER THE PAST FEW MONTHS. COFFEE-LOVERS HAVE INCREASED THE FREQUENCY OF THEIR PURCHASES, EVEN AS OUTSIDE TEMPERATURES HAVE RISEN THROUGH THE SPRING SEASON. mintcom +25% +20% MONTHLY COFFEE +15% SPENDING PER PERSON +10% COFFEE SHOPS HAVE SEEN SIGNIFICANT GROWTH OVER LAST YEAR'S NUMBERS, +5% WITH A DRAMATIC INCREASE IN JANUARY 2010. THE OVERALL INCREASE IS OWED TO 0% MORE FREQUENT PURCHASES, AS COFFEE PRICES HAVE FALLEN SLIGHTLY SINCE -5% 2009. -10% % CHANGE O 01 2010 VS 01 2009 JANUARY 2009 APRIL 2010 SOURCE: MINT.COM IT IS NO SURPRISE THAT THE NORTHWEST AND NORTHEAST REGIONS LEAD THE MONTHLY TRANSACTIONS PER USER COUNTRY IN COFFEE PURCHASES, WITH MAJOR WEST COAST CITIES TOPPING Q1 2010 THE LIST OF HIGHEST SPENDING PER PERSON. 8- 10 10.1 - 12 12.1 - 14 14.1 - 16 TOP 10 COFFEE CITIES: AVG MONTHLY SPENDING $36 * SEATTLE $34 * SAN JOSE $33 * PORTLAND $33 * PHOENIX $32 * LAS VEGAS $32 * DENVER $30 * SAN ANTONIO $30 * DALLAS $30 * SAN FRANCISCO $29 * TUCSON SOURCE: MINT.COM 01 2010 VS 01 2009 25% STARBUCKS VS OTHERS 21.1% 20.6% 20% 15% • STARBUCKS • ALL COFFEE SHOPS 10% STARBUCKS HAS NOT BEEN ABLE TO KEEP 5% 3,4%. PACE WITH ITS PEERS IN EARLY 2010. AMONG MINT.COM USERS, THE AVERAGE -0.4% -0.3% -5% TRANSACTION AMOUNT HAS DECREASED -3.6% MORE THAN OTHER SHOPS, BUT THEY ARE NOT WINNING BACK TRANSACTIONS SPEND PER SPENDING PER USER TRANSACTION PER USER CUSTOMERS AS QUICKLY. SOURCE: MINT.COM STARBUCKS RESPONDS .............. In the last two quarters, Starbucks has seen a significant year-over-year increase in the number of customers visiting our stores, resulting in some of the strongest financial results in our history. This growth is at odds with Mint.com's survey results. One reason for that discrep- ancy is that a large percentage of Starbucks customers pay for their beverages with gift cards or cash, two payment methods not fully accounted for in the Mint.com report. The report doesn't reflect all Starbucks licensed store purchases, nor does it account for Starbucks' packaged coffee and Starbucks VIA® sales in other retail channels. The data does support our belief that the coffee industry overall is gaining strength, and we are confident that we are playing a significant role in that growth. 5PDA TE