Gary Stern, a food and dining contributor at Forbes, said Foxtail Coffee is one example of a coffee company that is expanding while preserving culture and avoiding supply chain issues, in contrast to current issues faced by industry giant Starbucks.
“One of the key skills he needed to master in running a coffee shop was supply chain issues that encompasses many factors including sourcing material, coffee beans and refrigeration, the gamut," Stern wrote in a recent Forbes piece. "And his growth was mostly in Florida at the outset to avoid encountering complex supply issues in new states.”
"CEO and founder Alex Tchekmeian says that it had humble aspirations at the outset and started small, enabling him to self-capitalize," Stern said on Foxtail's beginnings. "Since its inception, it has grown to 71 locations including 31 company-owned and 40 franchised, and is picking up the pace of expansion."
The company is also set to start expanding into new states in 2025, according to Tchekmeian, who said the top three priorities in Foxtail are take care of his franchisees, keep customers happy, and not compromise the company's values.
Starbucks recently received the lowest possible rating from Ethical Consumer, a watchdog organization that monitors corporate social responsibility, on their supply chain practices. Ethical Consumer’s report highlighted significant concerns about human rights and labor practices within Starbucks’ supply chain, including allegations of poor working conditions and inadequate wages for workers in various parts of the world.
The company is also dealing with several active lawsuits, one of which is a dispute with Bodum, a well-known kitchenware company, over a patent infringement and contract breach related to the sale of French presses. Bodum has accused Starbucks of violating an exclusive supplier agreement and infringing on its patented design for a plunger-filter coffeemaker. The lawsuit, filed in the U.S. District Court for the Northern District of Illinois, seeks damages and injunctive relief. Starbucks has denied the allegations and plans to defend itself in court.
On July 30, 2024, Starbucks reported quarterly revenue below analysts' expectations in Q3, with net sales dropping 1% to $9.11 billion, compared to the expected $9.24 billion. The coffee giant's net income was $1.05 billion, or 93 cents per share, down from $1.14 billion, or 99 cents per share, a year earlier. U.S. traffic fell by 6%. Starbucks is exploring strategic partnerships in China to accelerate growth and opened 526 net new stores during the fiscal quarter.
The coffee company also named a new CEO, Brian Niccols, who officially joined the company on September 9.