In 1998, The Onion published a hilarious satirical article headlined "New Starbucks Opens In Rest Room Of Existing Starbucks." Poking fun at the chain's rapid expansion, the piece underscored just how ubiquitous Starbucks (NASDAQ:SBUX) was becoming.
"In addition to offering specialty coffees from around the world, it will serve freshly baked pastries ... as well as the rest room's usual selection of toilet paper and soap," according to the article.
That was 17 years ago. With the exception of some store closings surrounding the Great Recession and founder Howard Schultz's return to the helm as CEO, the company's expansion plans have continued unabated during that time.
You could be forgiven, then, for thinking Starbucks was the world's -- or at least the United States' -- largest coffee seller. You would, however, be wrong.
Do we really like bad coffee?
Before talking about coffee quality, I have a confession to make: Every winter, my wife, daughter, and I live in a tiny mountain village in Costa Rica. We spend the bulk of our free time volunteering on an organic, permaculture coffee farm where the quality of the coffee produced is second to none.
Before coming to Costa Rica five years ago, I'd never been a regular coffee drinker. So coming of age -- so to speak -- as a java consumer on the farm meant I paid a lot of attention to the quality of coffee.
Starbucks hopes more people join my ranks, as the company is experimenting high-end coffee offerings. Anyone who knows about coffee quality will tell you ground coffee is supremely inferior to the whole bean variety, which is only ground seconds before being brewed.
But do Americans really care about coffee quality? Apparently not.
According to an article in The Washington Post earlier this week, "People in this country, on the whole, are actually drinking worse coffee today than they have in the past. And the reason appears to be that they value cheapness over quality -- and convenience over everything."
With our fast-paced lifestyle, that shouldn't be surprising. And with convenience being the No. 1 factor in our coffee-purchasing decisions, it should be no surprise that Starbucks isn't the top coffee seller in the world. Instead, that honor goes to Keurig Green Mountain (NASDAQ:GMCR), maker of the eponymous at-home brewers and single-serve coffee pods.
According to Euromonitor, here are the top five coffee sellers, by sales, in the United States.
This is astounding. A decade ago, coffee pods were just in the early adoption stage, and many might have thought the fad would pass quickly. Fast-forward to today, and Keurig has a market share of over 20%.
Many assumed that expiration of Keurig's K-Cup patents would doom the company. But that hasn't been the case, thanks to shrewd partnerships with coffee companies and the enormous advantage built up by being the first-mover in the subindustry.
That's not to say Keurig will always be the king of coffee. But for the time being, it provides the thing most valued by American coffee drinkers -- not taste, but incredible convenience.
Brian Stoffel owns shares of Starbucks. The Motley Fool recommends Keurig Green Mountain and Starbucks. The Motley Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.