The Breakdown

Explaining Southern California's economy

The Coffee Bean & Tea Leaf names new CEO

The Coffee Bean & Tea Leaf named John Dawson, a former Dunkin' Donuts executive, as its new CEO. He becomes CEO next year.
The Coffee Bean & Tea Leaf named John Dawson, a former Dunkin' Donuts executive, as its new CEO. He becomes CEO next year.

The Coffee Bean & Tea Leaf named a prominent Dunkin' Donuts executive as its new CEO on Wednesday.

John Dawson will take over the reins as CEO of the Los Angeles-based coffee and tea chain on Jan. 1. Dawson last served as global development officer for Dunkin' Brands, where he oversaw day-to-day operations for franchising, development and construction. He was key in Dunkin's rapid expansion and will be an asset to Coffee Bean, analysts said.

"To recruit John Dawson, one of the best people in the business is a real strategic coup for Coffee Bean," said Burt Flickinger, III, managing director for Strategic Resource Group, a retail consulting firm.  “John has been a big part of Dunkin’ Donuts success in keeping prices low, in keeping sales high and making money based on volumes."

Dawson's experience could play a big factor in Coffee Bean's plans to expand in Southeast Asia and Southern California. He said in a statement he looks forward to leading the company to its "next phase of growth."

"My primary focus will be on increasing our existing sales and store base, supporting our franchisees, delivering outstanding product quality and providing excellent customer experiences," Dawson said. He was unavailable for an interview on Wednesday.

Flickinger said as Coffee Bean continues to increase stores, it could take market share from competitors like Starbucks, especially in the Western United States, Asia and college campuses.

Many coffee companies see Asia as a strong and lucrative market, in part due to the region's lower labor costs, said Nick Setyan, an analyst with Wedbush Securities. He credits Starbucks as being a pioneer for U.S. coffee companies in China.

"If companies were to follow suit, it would be a relatively low fruit to pick," Setyan said.

Coffee Bean says it is the nation's largest privately-held specialty coffee and tea chain. It has 944 franchise and company-owned stores worldwide, 311 of which are in the United States, the company said. In the Asia Pacific region, Coffee Bean has just 2.4 percent of the market share or nearly $238 million in sales in the specialist coffee shop category, according to research firm Euromonitor International.

Dawson will officially be CEO next year. Prior to that he will work on the transition with current CEO Mel Elias, who will join the company's board of directors.

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