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 [â¦] You're receiving this email as part of your subscription to Crowdability. [Unsubscribe here](. [Crowdability Editorial]( [feature] Wake Up, America! Drink This Coffee for a Potential 10-Bagger Brian Eller 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 arenât going to Starbucks, where are they going? Today, Iâll reveal the answer⦠Then Iâll explain how it could help you earn 10x your money. Starbucksâ Slump Research analysts have plenty of theories to explain Starbucksâ slump. They include: Too Expensive â Starbucks has raised prices repeatedly, including three times in quick succession between fall 2021 and early 2022. Too Slow â 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 â 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 âUnicorn Frappuccino.â These drinks burden Starbucks with countless inefficiencies and costs. But thereâs also another reason Starbucks is struggling⦠And this one might explain why the companyâs 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 didnât sit well with religious consumers. - About a decade ago, the company launched a Race Together campaign, in which the storesâ 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 â 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 âexceptional quality, strong American values, and a passionate community.â And business is growing fast⦠âBe Awake, Not Wokeâ Since 2019, Blackoutâs revenues have soared. In 2019, sales totaled $130,000. Last year, sales reached seven million dollars. Thatâs an increase of more than 5,200%. Certainly, its focus on traditional values has helped sales â a pledge to âBe Awake, Not Woke,â what the company describes as the âright message in the right industry at the right moment.â 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 companyâs 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. Thatâs 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 thatâs seven times larger than its current one. And itâs partnered with GovX, an e-commerce platform offering discounts on travel, apparel, and consumer goods to military members and first responders. Itâs 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 âProsâ and âConsâ 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 âpros.â These include impressive revenue and subscriber growth, and a brand message thatâs resonating with consumers. Furthermore, the company is in a market thatâs 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 â or even more. But there are some items on the âconâ side, as well. For example, just as Starbucks is alienating many customers with its strong values, Blackout could do the same. Furthermore, the companyâs 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. Thatâs why Iâm 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 youâre intrigued by Blackoutâs business and future potential, this might be one to explore. [Learn more here »]( 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. Best Regards,
[Brian Eller]
Brian Eller
Editor
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