Are specialty coffee shops overthinking the basics?

Specialty coffee shops have two essential purposes: to serve excellent coffee and offer exceptional customer service.

But as global specialty coffee consumption has grown, the market has become fiercely competitive. Businesses need a point of differentiation, often found through forward-thinking marketing strategies, creative signature and customised drinks, or the latest brewing technology.

In a bid to stand out, it can be all too easy to overlook or overthink the “basics” of core coffee offerings and hospitality. However, cafés that don’t invest in these essentials risk losing loyal and potential customers.

Chris Deferio of Keys to the Shop, Darleen Scherer of Black Sheep Coffee Collab, and Jack Pawlik of Dripos share their thoughts.

You may also like our article on why customer service will always be the most important thing in specialty coffee.

Great coffee & customer service have long been the backbone of specialty coffee

Third wave coffee culture was built on the premise of excellent coffee and hospitality. These two components have been central to the industry since the late 1990s and early 2000s.

During this time, passionate and aspirational café and roastery operators built their brands on craftsmanship, artisanry, quality, and transparency. Countering the convenience and “soullessness” of larger chains, third wave coffee shops offered spaces for consumers to connect with coffee in new ways, creating a sense of community that helped these businesses thrive.

Baristas emphasised the influence of origin, processing, variety, and altitude on flavour, advocating for a higher culinary appreciation of coffee. Transparency took centre stage as consumers demanded to know more about the “story” behind their beans. 

Roasting and brewing skills also gained more respect, encouraging consumers to appreciate the human-driven expertise and efforts invested in the supply chain. This helped create a sense of connection with high-quality coffee products, aligning them with self-expression, identity, and values.

As specialty coffee proliferated in the mid-2000s, it drove coffee quality and customer service to new heights. First defined by Erna Knutsen in the early 1970s (effectively predating the third wave) to describe more unique and higher-quality coffees grown in microclimates, specialty coffee also encompasses more holistic characterising factors, such as traceability and sustainability, as consumers have expressed a growing interest in learning about the wider supply chain.

Over the last two decades, the industry has continued to mature and evolve, shifting its hands-on approach towards automation and consistency – the latter of which still remains a key factor in “traditional” customer service. These changes, however, appear to reflect a more scientific approach to coffee preparation, as baristas strive for excellence and precision in their craft, often relying on automated equipment and gadgets to assist the process.

While some believe that automation frees up baristas’ time to focus on service, others argue that it undermines human-driven skills and expertise, ultimately altering the specialty coffee customer experience. 

Market maturation has changed the industry’s priorities

Despite its young age, the specialty coffee industry has grown at a remarkable rate. Specialty coffee consumption recently reached a 14-year high in the US, signalling further maturation of the market. 

However, this presents a double-edged sword. As market competitiveness increases, brands need to stand out even more. The rising costs across the coffee industry, namely record-high C prices and increasing expenses for nearly every essential, from milk to equipment, present more barriers to growth.

These economic pressures add another layer of complexity for those striving to build a unique brand identity in an already oversaturated market.

“Most coffee shop owners aren’t overthinking their core objective; serving high-quality drinks is inherently difficult and always top of mind. What we’re seeing instead is owners working hard to adapt and grow in a competitive landscape,” says Jack Pawlik, the co-founder of Dripos, a software development company focused on the specialty coffee industry. 

“Delivering a great product is just one part of running a successful business. Many are experimenting with ways to differentiate themselves, create more value for their customers, and build a more sustainable operation.”

In a market like specialty coffee, brand differentiation takes many forms. Some cafés and roasters focus on high-end micro lots and competition coffees to cater to niche markets, while others tap into trends like customised drinks to attract a wider audience.

“The reason this is changing is that customer expectations have fundamentally shifted,” says Darleen Scherer, the founder of Black Sheep Coffee Collab consultancy. “What they’re seeking is a distinctive experience that aligns with their identity and values. 

“Successful coffee businesses now must create meaningful connections through their brand story, physical space, community involvement, and overall experience,” she adds. “This evolution reflects a broader consumer desire for authenticity and connection in an increasingly digital world.”

Larger coffee chains are reshaping the customer experience

Specialty coffee shops, once outliers, have become increasingly mainstream in many countries. Brands like Japan’s % Arabica and California’s Reborn Coffee have recently secured millions in investment to fuel international expansion, including in emerging markets.

As these investment-backed specialty coffee chains proliferate, more customers are exposed to higher-quality coffee options, further evolving their demands and preferences. Expectations for coffee quality and customer service have been raised, and coffee shops must meet them.

While smaller, independent specialty coffee brands benefit from this exposure, it also intensifies market competition. Not only do these companies have to stand out from one another, but they also have to contend with the influence of larger chains, which have stronger branding and marketing power while offering comparable products.

To keep up with ever-changing consumer needs, some specialty coffee shops are embracing the growing trend of beverage customisation. Following in the footsteps of notable brands like Blank Street, Blue Bottle, and Black Sheep, smaller-scale cafés are expanding their menu options to include non-coffee drinks, such as matcha and lemonades, while still maintaining a focus on high-quality coffee offerings. This enables them to retain their core consumer base while attracting new customers, particularly Gen Z, who these drinks appeal to.

“It seems an overwhelming majority of shops are trying to catch as many customers as possible, so they add these menu items in a bid to hedge their bets and, in their mind, increase the chance of success,” says Chris Deferio, the founder of podcast and coffee shop consultancy Keys to the Shop. 

“The ability for owners and operators to look at other cafés via social media and the internet, or through travel, is also why we see a lot of changing concepts that often don’t work to bring the desired success,” he adds. “The one thing we have seen little of is a well-thought-out menu meant to serve the customer in the community the shop is operating in.”

The influence of larger chains and trends is also reflected in customer service. Connection, storytelling, and traditional hospitality are increasingly being replaced by QR codes and mobile ordering to expedite the coffee shop experience, catering to increasingly fast-paced lifestyles. But on the flip side, they create “faceless” businesses that fundamentally reshape how baristas interact with customers.

A shift toward “hyper-specialty”

Conversely, as part of efforts to differentiate from “mainstream” specialty coffee, some high-end coffee shops are adopting a more scientific and precise approach to brewing, influenced by competitions like the World Barista Championship.

Having a meticulous focus on serving ultra-rare coffees and tightly controlling extraction variables helps elevate quality standards at these establishments, and also influences broader industry trends.

These cafés serve an important purpose in specialty coffee, bringing consumers closer to excellence and prestige that’s often reserved for competition stages only. But simultaneously, they can easily escalate into pretentiousness and hauteur if hospitality isn’t a constant priority and help to the same standards as the coffee served.

The constant push for excellence and insatiable appetite for exclusivity can quickly obscure the underlying need for consistently great customer service.

“Market saturation isn’t merely the presence of a physical coffee house, but in terms of excellent experiences. The experience is the substance, not the building or the brand,” Chris says. “By that standard, we are far away from market saturation.

“Excellent branding, nice equipment, champion baristas, award-winning roasters, and clever marketing are fine, but not when you can’t deliver in daily business operations, and when baristas disappoint the expectations of the customer.”

Focusing on the essentials: serving people

With a more diverse range of specialty coffee businesses than ever before, it’s clear that different types of coffee shops have distinct needs. Ultimately, however, the true tipping point between success and failure in the coffee industry comes down to one constant: the customer. 

“After seeing thousands of shops operate, one thing is clear: it’s the simple, human moments that matter most,” Jack says. “A friendly barista, a warm welcome at the register – these small interactions instantly shape how someone feels in a space. Coffee shops are, at their core, social environments. Every customer touchpoint is a chance to create a connection and brighten someone’s day, even in a small way.”

Consumer loyalty, choices, and daily habits dictate whether a business thrives or fades away. Building a base of returning customers is one of the most powerful drivers of long-term success for any coffee business, no matter its brand identity.

“Simply serving exceptional coffee is no longer enough to attract loyal customers and scale successfully,” Darleen says. “The most successful coffee businesses understand that standing out requires creating a distinctive brand experience around their coffee service.

“The coffee industry is full of imitators, so breaking from the herd with a clear strategic vision is essential. Remember that exceptional coffee is your foundation, but your distinctive approach to serving it and your commitment to evolving alongside your customers become your competitive advantage,” Darleen adds.

At the core of lasting success is an unwavering focus on customer experience, understanding their evolving needs and consistently delivering solutions that exceed expectations.

“Simple drinks and kind service done well in a clean, comfortable space consistently at all hours of operation over the years. Study people more than coffee, serve them well, and they will support you,” explains Chris. “Fail to serve, and you will find yourself relying on the mechanisms we often use to divert the blame away from us and pretend it is a matter of unravelling the mysterious world of branding, marketing, novelty, and gimmicks.”

The best-performing shops treat customer service as a craft in itself. They’re not just focused on speed or efficiency; they prioritise true hospitality. Consistency, attentiveness, and genuine friendliness remain the pillars of great service. No matter how much the industry evolves, those fundamentals remain timeless.

“Customer preferences are not as mysterious as they’re made out to be. Local taste is what should concern most operators, but they instead choose national trend data and overlook their own backyard,” Chris tells me. “Customers want simple and excellent quality menus, a reasonable and well-thought-out level of menu variety that can be executed well, and options for customisation, but also a level of constraint, curation, and confidence from a café.”

Hospitality has always been, and will continue to be, a cornerstone of speciality coffee. As it faces one of the most challenging times in its recent history, specialty coffee needs to ensure that consistently excellent customer service remains at the forefront of daily operations.

“The future belongs to coffee businesses that can articulate not just what they do, but why it matters and how it’s different in ways that are relevant to consumers,” Darleen concludes. “Those who master this will not just survive the current competitive landscape but thrive within it, building loyal customers who become vocal brand ambassadors.”

Enjoyed this? Then read our article on the future of hospitality and customer service in specialty coffee.

Perfect Daily Grind

Photo credits: Brewpoint Coffee

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