If you‘re a regular Subway customer, you‘ve likely pondered a question while waiting in line for your favorite footlong sub: does Subway sell coffee too? It‘s a reasonable thought. After all, many fast food chains have made selling coffee and breakfast a priority to attract morning commuters and caffeine fiends. McDonald‘s now generates 40% of its U.S. sales before 11am thanks largely to coffee beverages and its McCafé brand. And Dunkin‘ has been a coffee-first, donuts-second business ever since dropping the "Donuts" from its name in 2018.
So has Subway, the world‘s largest fast food chain by number of stores, ever tried to get into the coffee game? The answer is yes, but with extremely limited success. Despite an ambitious effort to launch the Subway Café concept in 2011, Subway has struggled to gain a foothold in the coffee market. Of the 37,000+ Subway locations worldwide today, only a tiny handful sell espresso drinks or iced lattes. Here‘s the full story of Subway‘s complicated relationship with coffee.
The Grand Opening of Subway Café
Subway first entered the coffee business with a splash in August 2011 with the launch of its first-ever Subway Café location in Alexandria, Virginia. The concept was billed as an "upscale" twist on the classic Subway sandwich shop, with a range of espresso beverages, teas, and hot chocolate rounding out the menu.
"The Subway Café concept is just one example of the many ways we are evolving our brand and business model," a company spokesperson said at the time of launch. "The café environment and selection of baked goods along with our quality coffees based on Subway‘s high standards are sure to make this concept a success."
Beverages on the Subway Café menu included:
- Espresso
- Americano
- Cappuccino
- Latte
- Caramel Macchiato
- Caramel Latte
- Mocha Latte
- White Chocolate Mocha
- Hot Chocolate
- Vanilla Chai
- Iced Coffee
- Iced Latte
- Iced Mocha
- Iced Caramel Macchiato
- Iced Chai
Prices ranged from around $1.50 for a small coffee to $3.50 for a large flavored latte. Baked goods like muffins, scones, and cookies were also available as an add-on to any beverage or sandwich.
Subway followed up the Alexandria opening with four more café locations in Washington D.C. before expanding the concept to other urban markets like San Diego, Chicago, and New York City. The company aimed to open 20-30 Subway Cafés by the end of 2011 and signaled plans for further expansion if the launch proved successful. Most café stores were concentrated in city centers and high-traffic areas like airports, hospitals, and universities.
"Subway Café is the latest example of our ongoing efforts to provide customers with greater choices and options," said Les Winograd, a company spokesperson, in a statement. "With Subway Café, customers have an inviting space to relax, enjoy a delicious cup of coffee and a variety of Subway‘s internationally recognized, made-to-order sandwiches and salads."
A Smaller Footprint and Bigger Challenge Than Expected
While Subway had lofty goals for its café concept, the massive sandwich chain soon hit some speed bumps. Logistically, the smaller footprint of a Subway restaurant made it difficult to add complex coffee equipment and additional baked goods without sacrificing efficiency. Franchisees reported challenges with offering the full café menu while still churning out subs quickly during the lunch rush.
There were also issues with consumer perception and brand fit. Many Subway customers simply didn‘t think of the chain as a coffee destination the same way they would a Starbucks or McDonald‘s. While the coffee itself got decent reviews for taste, Subway struggled to convince people to make an extra stop for their morning joe.
"It was always a tough sell," said John Gordon, a restaurant industry analyst with Pacific Management Consulting Group. "Subway means sandwiches and that‘s what their customers expect. There wasn‘t a compelling reason to go out of your way for coffee at Subway when there are already so many great options out there."
Indeed, Subway was entering into a crowded and competitive coffee market dominated by a few major players. In 2011, Starbucks controlled 57% of the U.S. coffee shop market, with Dunkin‘ and McDonald‘s holding the #2 and #3 spots respectively. Taking on the coffee giants proved to be an uphill battle for a brand so synonymous with sandwiches.
After opening around 20-25 Subway Cafés in total, expansion of the concept came to a halt. Over the following years, many café locations shuttered or converted back into traditional Subway stores. Today, only about 5 Subway Cafés remain in operation worldwide. Most of the surviving ones are in non-traditional locations like hospitals and universities, not standalone stores.
Subway‘s Second Shot with Single-Serve Pods
Despite the café concept not taking off, Subway tried its hand at coffee again a few years later through a pod partnership. In 2014, the chain announced a deal with Keurig to sell branded Subway coffee pods compatible with the company‘s popular single-serve brewing machines. The goal was to make it easier for franchisees to offer fresh-brewed coffee without needing additional equipment or barista training.
"Now guests can enjoy a freshly brewed cup of coffee with their favorite Subway breakfast sandwich," a Subway executive said of the Keurig deal.
However, the single-serve program was also short-lived and didn‘t move the needle much for Subway‘s coffee sales. Keurig was facing its own challenges at the time, with the declining popularity of pod-based brewers. By 2016, Subway had ended the Keurig partnership to re-focus on its core business of sandwiches.
Some analysts saw Subway‘s brief dalliance with pods as yet another indication that coffee was simply not a good fit for the brand. "Single-serve pods are the antithesis of what Subway stands for," said Sam Oches, Editorial Director of Food News Media. "Subway has always been about freshness and customization. Pre-packaged coffee pods don‘t really align with that mission."
The Bottom Line: Should Subway Stick to Subs?
With the Subway Café concept all but abandoned and single-serve pods off the table, it seems clear that Subway faces an uphill battle in becoming a coffee destination. But that doesn‘t necessarily mean the sandwich chain should give up on java entirely.
There could still be ways for Subway to sell coffee successfully, even if not through a full-scale café model. For example, the chain could simplify its coffee menu to just a few core offerings (e.g. regular coffee, iced coffee, and maybe one signature latte) to minimize operational complexity. Subway could also lean into its positioning as a healthier fast food alternative by offering options like oat milk, almond milk, and organic coffee beans.
Focusing on coffee quality and sourcing would be key for winning over skeptical consumers. "If Subway wants to be taken seriously as a coffee seller, they need to have a coffee product that can stand up to the likes of Starbucks and Dunkin‘," said Andrew Hetzel, a coffee industry consultant. "That means investing in high-quality beans, expert roasting, and proper barista training. You can‘t just slap a Subway label on some mediocre coffee and expect people to buy it."
Another avenue for Subway could be to partner with a well-established coffee brand for a co-branded product or in-store kiosk as McDonald‘s has done with McCafé. This would provide Subway with coffee credibility and expertise while allowing the sandwich chain to still capture some sales.
Ultimately, Subway will need to think carefully about how coffee fits into its overall brand identity and mission. Is selling coffee worth the operational challenges and potential distraction from the core business of sandwiches? Can Subway find a way to make coffee a value-add for its existing customers rather than trying to attract new ones?
The good news for Subway is that consumer demand for coffee shows no signs of slowing down. Over 150 million Americans drink coffee every day and the average coffee drinker consumes around 3 cups per day. The U.S. coffee shop market is expected to reach $45 billion by 2025, up from $36 billion in 2020. And while the COVID-19 pandemic put a dent in coffee shop visits, 72% of Americans said they plan to return to cafés and increase their coffee consumption as the virus recedes.
So the market opportunity is there for Subway, should the sandwich giant choose to take another shot at it. But after a decade of false starts and struggles in the coffee arena, many experts remain skeptical that Subway will ever be known for more than its subs.
"Subway is in the business of selling sandwiches, not experiences," said Gordon, the restaurant consultant. "People go there for a quick, affordable lunch, not to linger over a latte. That doesn‘t mean Subway can‘t sell coffee, but it will always be a side show to the main event. Trying to be something they‘re not could just alienate loyal customers."
Only time will tell if Subway takes another crack at coffee in the future. But for now, if you‘re craving a cup of joe with your footlong, you‘re probably better off making two stops.
