By now, many of us thought that the availability of quality
espresso drinks would have been broader. We thought that,
by now, you should be able to go to any good restaurant for
breakfast and get a reasonable latte. It's certainly not
the case.
Here's the bizarre thing- in the last 5 years the consumption
of specialty coffee has spiked- more than a 40%
increase.
Where has all this business gone? Has everyone been losing
morning business to Starbucks?
Maybe so and they don't even know it. With more people eating
more meals out every year, the increases in new niches that
are occupied by the likes of Starbucks are often vaguely
visible to other restaurateurs that are busy with the same
offering they have had for years.
Pulling our magnifying glass out, let's look at this morning
coffee niche. More than 70% of coffee is consumed before
noon. The pattern is for quick consumption of high quality
coffee products and pastries. In seeking an opportunity for
your store- can you effectively address this niche in a way
that makes the customer bond with your morning identity?
Jerry Dana, who has an extremely successful Elmer's Restaurants
franchise with his brother Joe, just decided to stop selling
espresso drinks after about 10 years of offering them. He
remarked, "We didn't do enough to focus on espresso…we
didn't do it well. Our people [customers] come for meetings
and are committed to spending 30+ minutes to be here."
My hats off to the Dana brothers. They rearticulated their
niche (that they are very good at), tried melding espresso
into it and found that, to do it right, it took more to do
it well than worked for them. They also know that within
2 blocks of their Mall 205 Portland location there is more
than $3000 a day of espresso served at 2 locations that are
working for their morning espresso identity.
Back to Starbucks, with its new store propagation factor
roughly parallel to fruit flies on a banana. How can they
continue to keep this gigantic ball rolling? It's good coffee
with huge coffee identity.
They are now successfully taking it around the world. Two
of their biggest volume stores in the world are in Japan.
They are using their base in the U.K. to launch into Europe.
Starbucks has shown the world a universally successful method
of getting a huge slice of the morning hospitality trade,
with the lead identity of an Identity Coffee. They have also
addressed a fundamental shift in the way many people choose
to pattern their mornings in the U.S. Instead of a breakfast
at home or breakfast at the diner, it is a quick high quality
cup of coffee and a pastry.
Besides recognizing the basic shift in what people want
in the morning, I see some clear lessons that can be adapted
by anyone wanting in to this part of the business:
. Many people forget the hard work that
McDonald's went through to become the 'breakfast fast food
guys'. It was consistent, tough years to keep going after
they committed to the niche before it turned a profit. Now
a lot of us count on that Egg McMuffin. That is what it takes
to create an identity, a new niche. Remember, you're getting
people to create a new habit. That's a huge thing to change.
No one
wants surprises in the consistency of what they are buying.
There is no place any more important to produce this that
I know of than specialty coffee. If someone is paying $2.50
for a cup of coffee, it darn well better be worth $2.50
You may not be able
to do it with Starbuck's identity, but wherever you are,
use the coffee roaster that has the best reputation and leverage
that identity. Banners, branded cups, whatever they have
available to promote the brand, use it!
The atmosphere of 'The Third
Place' that Howard Schultz speaks of in his book about the
place other than work and home. Interestingly, in Italy it
is the corner bar and they serve great espresso and pastries
in the mornings. It's a great concept. Can your place be
the third place for your patrons? Are they comfortable coming
in for a just a latte or coffee? Remember that's the profitable
business that Starbucks has nurtured. Fast in the morning
means providing the turnaround that the customer wants and
lets you get on to the next customer.
Serving the specialty coffee niche isn't for everyone. It
takes persistence and the dedication to control the production
of a highly sensitive product. But as it's expansion continues
to march along at the rate of 8% per year, and the genXers
and Yers replace the Yuban drinkers, you will keep seeing
more opportunities capitalized on by those addressing the
needs of this expanding segment of consumers. |
