Starbucks just ousted its CEO.
Makes sense. The coffee chain has been struggling. In fact, its stock fell nearly twenty percent in the first half of this year.
The thing is, according to the National Coffee Association, U.S. daily coffee consumption is at its highest level in more than twenty years.
So if coffee drinkers aren’t going to Starbucks, where are they going?
Today, I’ll reveal the answer…
Then I’ll explain how it could help you earn 10x your money.
Starbucks’ Slump
Research analysts have plenty of theories to explain Starbucks’ slump. They include:
Too Expensive — Starbucks has raised prices repeatedly, including three times in quick succession between fall 2021 and early 2022.
Too Slow — In 2019, as reported in Bloomberg, eighty percent of guests waited less than five minutes for their order. In Q1 2024, less than sixty percent got served that quickly. And nearly ten percent had to wait upwards of thirty minutes.
Too Complicated — Per The Wall Street Journal, eighty-five percent of beverage sales are for complicated drinks, including the Matcha Sweet Cream Cold Foam, Iced Vanilla Chai, and “Unicorn Frappuccino.” These drinks burden Starbucks with countless inefficiencies and costs.
But there’s also another reason Starbucks is struggling…
And this one might explain why the company’s sales are falling, and why its stock is dropping.
Too Liberal?
Over the past several years, Starbucks has gained a reputation for being highly liberal. And this stance has alienated a large number of potential customers.
For example:
- Every year, Starbucks releases a line of holiday-themed mugs. But recently it stopped creating mugs with Christian messaging. This didn’t sit well with religious consumers.
- About a decade ago, the company launched a Race Together campaign, in which the stores’ baristas were encouraged to talk about race with customers.
- In 2016, then-CEO Howard Schultz endorsed Hillary Clinton for President, upsetting a number of conservative voters. A year later, Schultz announced plans to hire 10,000 refugees, which angered those who believed the company should look to hire U.S. veterans instead.
This explains why a growing number of consumers are shunning Starbucks, In fact, #BoycottStarbucks often trends on social-media platforms.
Instead, many customers are choosing to get their coffee elsewhere — including from a company whose values align more closely with their own…
Introducing Blackout Coffee
Blackout Coffee is a coffee startup.
Founded in Florida in 2018, it focuses on “exceptional quality, strong American values, and a passionate community.”
And business is growing fast…
“Be Awake, Not Woke”
Since 2019, Blackout’s revenues have soared.
In 2019, sales totaled $130,000. Last year, sales reached seven million dollars. That’s an increase of more than 5,200%.
Certainly, its focus on traditional values has helped sales — a pledge to “Be Awake, Not Woke,” what the company describes as the “right message in the right industry at the right moment.”
But sales have also been helped by its affordable, great-tasting coffee.
Blackout sells six blends, all made in-house. They range from light roasts (called Smooth Finish) to medium roasts (called Morning Reaper) to dark roasts (called Brewtal Awakening).
You can buy individual bags, or you can join the company’s subscription service. More than 12,000 people already subscribe.
No matter what you buy, Blackout will ship it to you in less than forty-eight hours. That’s important because coffee is at peak freshness for about three days after roasting.
Starbucks, meanwhile, lets coffee sit in bags for thirty-four weeks!
Future Plans
As reported by the Specialty Coffee Association, the U.S. coffee market is valued at around forty-eight billion dollars. And specialty coffee makes up more than half of that. Subscription services, meanwhile, are valued at more than $685 million.
These are the markets Blackout Coffee is targeting for growth.
To support its growth, the company invested in a manufacturing facility that’s seven times larger than its current one. And it’s partnered with GovX, an e-commerce platform offering discounts on travel, apparel, and consumer goods to military members and first responders.
It’s also developing ready-to-drink products and single-serve instant premium coffee pouches.
To support these initiatives, Blackout is currently raising capital from investors like you…
The “Pros” and “Cons” of an Investment
Blackout is raising up to $7.5 million at a valuation of about sixty-four million dollars. The minimum investment is $500.
Should you invest?
This opportunity certainly has a number of “pros.” These include impressive revenue and subscriber growth, and a brand message that’s resonating with consumers. Furthermore, the company is in a market that’s experiencing notable M&A activity.
For example, in 2023, Chobani acquired La Colombe coffee for $900 million. That same year, General Atlantic acquired Joe & the Juice, a coffee chain, for $641 million. And in 2017, Nestle acquired a sixty-eight-percent stake in Blue Bottle Coffee for a reported $700 million.
If Blackout gets acquired at a similar price tag, investors today could be sitting on gains of 10x — or even more.
But there are some items on the “con” side, as well.
For example, just as Starbucks is alienating many customers with its strong values, Blackout could do the same.
Furthermore, the company’s valuation is already relatively high. So if it gets acquired at a lower price than the ones mentioned above, your profit potential could be limited.
That’s why I’m not recommending that you rush out to invest in Blackout Coffee. Make sure to do plenty of research before you consider pulling the trigger!
But if you’re intrigued by Blackout’s business and future potential, this might be one to explore.
Happy investing.
Please note: Crowdability has no relationship with any of the startups or investment platforms we write about. We're an independent provider of education and research on startups and alternative investments.
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Crowdability.com
