Philz: Changing the local coffee scene, one cup at a time

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Philz Coffee received $15 million in Series B funding last year to expand its locations. One of these new locations is in our neighborhood, and this got us wondering: is Philz changing local coffee markets?

Specifically, we wanted to know:

1. Whether Philz grows local coffee markets

• Where Philz gets its customers
• If nearby Starbucks, Peet’s, and local coffee shops lose customers to Philz

We looked at five locations where Philz recently opened in the San Francisco Bay Area: San Mateo, Sunnyvale, Los Gatos, Redwood City, and Oakland.

We found:

1. Philz helped grow local coffee markets.
   
   More people drank coffee in these cities after Philz opened: monthly coffee drinkers at these companies^[1] grew 15-50% from 10 months before Philz opened to 10 months after. Controlling for changes in populations and growth in nationwide coffee consumption, local coffee sales followed the same trend.
2. Philz attracted coffee-drinkers to local markets, and these customers make up a high percentage of their customer base.
   
3. In the new market, coffee-drinkers take advantage of choice. A higher percentage of customers visit more than one coffee shop in a month; there are also fewer loyalists with Peet’s and, to a lesser extent, with Starbucks. Interestingly, loyalists increased among smaller local coffee shops.
   

Philz has been able to grow and change local coffee markets in the Bay Area^[2], but will it be able to shift local tastes as it expands beyond California? Request a demo to find out more about local markets.