Coffee and Tea Trends in all 50 States, New Restaurant Wage Data, and Breakfast Performance

The Q1 2024 Restaurant Trends report examines coffee and tea trends in all 50 states, breakfast transactions in 20 U.S. cities, and restaurant employee wage data. 

Key takeaways:  

• In Q1 2024, guests across the U.S. paid an average of $3.08 for a cup of regular coffee, $5.14 for cold brew, $5.46 for lattes, and $3.74 for tea.1
• Tea is more popular than regular coffee in 31 states.2
• Saturday breakfast transactions grew 6% YOY (year-over-year), and Mondays dipped 4% YOY.3
• In Chicago, servers and bartenders at full-service restaurants earned a median hourly wage of $9.48 in Q1 2024, which is up from $9.00 in Q1 2022.4
• In Washington, D.C., servers and bartenders at full-service restaurants earned a median wage of approximately $8 in Q1 2024, up from $5.05 in Q1 2022.4
• In April, quick-service restaurant workers’ hourly wages in California increased 4% month-over-month, from $17 to $17.75.5
• Delaware was the most generous state overall for tipping, with an average total tipping percentage of 22.1%.6
  
  

The price of coffee, tea, cold brew, and lattes in all 50 states

Menu insights for the Restaurant Trends Report are powered by a Toast benchmarking tool, which leverages an AI-based classification tool and allows users to compare restaurant and menu category performance against aggregated data from Toast restaurants.

Whether it’s a hot cup of joe, a delicately crafted latte, or a comforting cup of tea, Americans are known for their love of caffeinated beverages. But in recent months, there’s been an increased focus on the price of coffee in particular, as extreme weather has affected harvests and sent global coffee prices soaring, according to the Wall Street Journal.

To understand how much Americans pay per cup, Toast analyzed the average price of regular coffee, cold brew, lattes, and tea in each U.S. state. On average, consumers paid $3.08 for a cup of regular coffee, $5.14 for cold brew, $5.46 for lattes, and $3.74 for tea in Q1 2024.

1Toast analyzed transactions at restaurants on the Toast platform from January 1, 2024, to March 31, 2024, to determine the price of drinks labeled “regular coffee,” “cold brew coffee,” “latte,” and “tea.” Drinks in the “tea” category include specialty, iced, black, herbal, and green tea. Milk tea is not included in this analysis.

Hawaii had the most expensive coffee in the country, with an average price of $4.89 — approximately 59% higher than the national average. California was the second-most expensive, averaging about $1 less than Hawaii at $3.88, which is  26% higher than the national average. On the other end of the spectrum, the average price for a cup of coffee in Nebraska in Q1 2024 was just $2.12 — 31% lower than the national average.

Toast noticed similar trends with cold brew and tea, with Hawaii and California pushing the top end of pricing, but Alaska bumped California out of the number two spot for the most expensive latte at $6.09. What is the average price of a latte in Hawaii? A whopping $6.69. The sky-high prices of lattes in Hawaii and Alaska are likely driven by the price of milk and the remoteness of the two states. Prices for milk in these states are among the highest in the nation, and shipping goods such as espresso to these regions only increases those prices.

Are you a coffee or tea person?

So what’s more popular? Coffee or tea? That depends on what state you live in.

Toast analyzed the popularity of 10 different coffee and tea types (regular coffee, iced coffee, cold brew, mocha, latte, cappuccino, espresso, Americano, tea, and milk tea) at quick-service restaurants and cafes to determine the five most popular beverages in every state. 

There was a clear divide, with the Northeast mostly favoring regular coffee as their go-to caffeinated beverage. The Midwest and Western United States were split, with some states favoring tea, while much of the South and Southwest were team tea all the way. 

2 Toast analyzed transactions on the Toast platform from April 28, 2023, to March 31, 2024, to determine the popularity of drinks labeled “regular coffee,” “cold brew coffee,” “iced coffee,” “latte,” “espresso,” “cappuccino,” “mocha,” “Americano,” “milk, tea” and “tea.” Drinks in the “tea” category include specialty, iced, black, herbal, and green tea. Analysis dates were increased beyond Q1 to remove seasonality ordering preferences.

Breakfast transactions are up in Minneapolis, Chicago, and NYC but down in Atlanta, Charlotte, Philadelphia, and Denver

Speaking of coffee — Toast analyzed same-store breakfast transactions and GMV (Gross Merchandise Volume) at restaurants on the Toast platform in Q1 2024 compared to Q1 2023. Toast measures transaction growth to gauge how busy restaurants are — if same-store transaction counts are up, restaurants are likely serving more guests. If GMV is up (or the total value of goods sold), restaurants are either selling more items or they are charging more for those items. 

Cities like Minneapolis (+8%), New York City (+6%), and Chicago (+5%) all saw a healthy increase in breakfast transactions, while Atlanta (-7%), Charlotte (-6%), Philadelphia (-4%), and Denver (-4%) decreased transactions YOY. 

The cities with the highest YOY breakfast transaction increases also saw the largest increase in GMV during breakfast hours, with the exception of New Orleans, which decreased its breakfast transaction volume by 1% but grew GMV by 8%. 

7Toast analyzed restaurant breakfast transactions in 20 cities on the Toast platform from 5 a.m. to 11 a.m. in Q1 2023 compared to Q1 2024. Toast used a cohort of same-store restaurants on the platform since Q4 2022. 

The busiest hours for breakfast transactions

Diving deeper into breakfast trends, cities on the West Coast, like Los Angeles, San Francisco, and Seattle, had more early-morning transactions than the rest of the country.7 Despite these early-morning transactions, most cities were busiest for breakfast between 9 a.m. and 11 a.m., especially for full-service restaurants. Residents of Richmond especially like to sleep in if they’re going out to breakfast — 55% of its FSR breakfast transactions occurred between 10 a.m. and 11 a.m.

Among the East Coast cities, Boston had the highest number of transactions before 8 a.m. — 20% of its breakfast transactions at QSRs and 17% of its FSR transactions occurred between 5 a.m. and 7 a.m.

Regardless of the type of eatery or the city, restaurants really start to get busy for breakfast at 8 a.m.

7Toast analyzed restaurant breakfast transactions in 20 cities on the Toast platform from 5 a.m. to 11 a.m. in Q1 2023 compared to Q1 2024. Toast used a cohort of same-store restaurants on the platform since Q4 2022. 

So, which days are diners going to grab breakfast? QSRs were busiest for breakfast in Q1 2024, Wednesday through Saturday, with transactions peaking on Friday (17%).3 FSRs were busiest for breakfast Friday through Sunday, with the highest number of transactions (19%) occurring on Saturday.

Interestingly,  when you compare Q1 2024 breakfast transactions to Q1 2023, transactions dipped 4% on Mondays, 2% on Tuesdays, and 1% on Fridays. Saturday saw 6% more transactions in Q1 2024 than in 2023, and Wednesdays ticked up just 1% when compared to the prior year. Sundays and Thursdays remained flat YOY. 

3Toast analyzed transactions in quick- and full-service restaurants on the Toast platform from 5 a.m. to 11 a.m. in Q1 2023 compared to Q1 2024. Toast used a cohort of same-store restaurants on the platform since Q4 2022. 

Pay changes for fast-food and tipped restaurant workers

A big topic of conversation in the restaurant industry right now is pay, as several state and local governments have recently passed legislation to raise the minimum wage for fast-food and tipped restaurant workers.

The federal minimum wage for tipped employees is $2.13 per hour as long as the “amount combined with the tips received at least equals the federal minimum wage,” according to the Department of Labor. This is known as a “tip credit.” The maximum tip credit against the federal minimum wage is currently $5.12 to meet the federal Basic Combined Cash & Tip Minimum Wage Rate of $7.25 per hour. 

However, local municipalities and states can pass laws to increase the minimum wage for tipped employees, such as in California, where the minimum cash wage is currently set at $16 an hour, and employers are not offered a tip credit. 

In Chicago, the One Fair Wage Ordinance was passed and implemented, which will phase out subminimum wages for tipped workers. Removing the tip credit in Chicago is gradual and is expected to be fully eliminated by June 30, 2028. 

The city of Washington, D.C., imposed a similar measure that went into effect in May 2023. It’s a gradual increase and will raise its minimum wage for tipped workers from $8 per hour to $10 per hour in July 2024. 

To determine how these local laws are affecting restaurants in the U.S., Toast analyzed both hourly wages and tips per hour for workers with the job titles “server,” “bartender,” or included the word “wait” at full-service Toast restaurants utilizing Toast Payroll & Team Management.

4Data from applicable same-store full-service restaurants on the Toast platform from January 1, 2022, to March 31, 2024. Salaried, overtime, and bonus wages are not included. Paid time off is not included. Servers and bartenders included in the analysis worked a minimum of five hours in the payroll period and received tips greater than zero. Servers and bartender job titles included a version of the words "bartender," "server" or "wait."  Hourly wages do not include tips. Base wages are the total wages divided by the number of hours. Tips per hour are the total reported tips divided by the number of hours.

In Chicago, servers and bartenders earned a median hourly base wage, excluding tips, of $9.48 in Q1 2024, up from $9 in Q1 2022. Washington, D.C., saw a much larger increase over the two-year period. Servers and bartenders earned a median wage of approximately $8 in Q1 2024, up from $5.05 in Q1 2022. That’s a 58% increase in just two years.4  

Tips per hour for servers and bartenders have increased in recent quarters in both Chicago and Washington, D.C. Several factors can affect this, including the number of employees, inflated menu prices, service fees, an increase in transactions, and, of course, great service. 

Some guests have expressed frustration in not knowing how they should tip workers following these changes, especially if restaurants implement service charges to help offset the cost of paying employees more per hour. 

In Los Angeles, where the minimum wage for tipped employees is $16.78 per hour, and there is no tip credit, Toast found that servers and bartenders at FSRs were making a median wage of $16.78 per hour. While Californians tend to be the stingiest when it comes to tipping, servers and bartenders made median tips per hour of $29.66 in Q1 2024, which is 37% above the national average of $21.63 per hour.

How California's fast-food pay changes are affecting restaurants

In California, another legislation change is impacting fast-food workers. Starting April 1, 2024, the state of California increased the minimum wage for “fast food restaurant employees” to $20 per hour. To be eligible, the restaurant must offer limited or no table service, have 60 or more establishments nationwide, and primarily sell food and beverages for immediate consumption.

While many quick-service restaurants are exempt from this requirement, operators may need to keep up with this wage increase to attract talent and stay competitive with larger chains. 

5Data from applicable same-store quick-service restaurants on the Toast platform from January 1, 2022, to March 31, 2024. Salaried, overtime, and bonus wages are not included. Paid time off is not included. Employees included in the analysis worked a minimum of five hours in the payroll period. Employees who received tips were included, but tips were not included in the analysis. Base wages are the total wages divided by the number of hours.

California quick-service restaurant workers made a median hourly wage (excluding tips) of $17 as of Q1 2024, which is 17% higher than the national average of $14.50 per hour. In April, median hourly wages jumped by approximately 4% month-over-month to $17.75 for California quick-service restaurant workers, while the national average dropped to $14.42.5

Tipping has steadied after dipping from pandemic highs

Tipping rates are from applicable restaurants on the Toast platform where a tip was added to the order via a card or digital payment. Cash tips and transactions without tips are not included in the analysis.

Overall, tips remained generally flat in Q1 2024 compared to Q4 2023, which is good news for restaurant employees. Total tips averaged 18.9% in Q1 2024, the same as Q4 2023. Full-service restaurant tips also remained flat at 19.4%., and so did quick-service restaurant tips, which averaged 16% in Q1 2024. 

Total average tips and tips at full-service restaurants have remained flat since Q2 2023. Quick-service restaurant tips have remained relatively unchanged, hovering between 16.1% and 16% since Q2 2023. 

When the hourly base wage for tipped employees went into effect in May 2023 in Washington, D.C., average tip rates for full-service restaurants dipped by .5% between Q1 2023 and Q3 2023. Rates have since recovered slightly to 18.2% in Q1 2024.

6Data from applicable full-service restaurants on the Toast platform where a tip was added to the order via a card or digital payment from January 1, 2022, to March 31, 2024. Cash tips are not included in the analysis.

So how do individual states tip? In Q1 2024, Delaware was the most generous overall, with an average total tipping percentage of 22.1%. The state also has the highest tips for full-service restaurants, tipping an average of 22.5%, and quick-service restaurants, averaging 19.1%.6 

Overall, California tips the least of all states, especially for full-service restaurants, where the average tip was 17.9%.  However, the state that tips the least generous at quick-service restaurants is New Jersey, with an average tip percentage of 13.8% in Q1 2024.