Lack of innovation

the business of coffee houses

Lack of innovation

Postby Gary McGann on Thu Apr 12, 2007 4:42 am

Here is the UK the high street and mall land the coffee scene is becoming increasingly homogenous! In most countries its not much different. Landlords giving the sites to the big boys and the big boys pretty much serve the same slop in different formats.

A recent meeting with a potential customer led to a conversation about the lack if innovation in retail coffee over the last few years. This got me thinking that in the main they were right and though there are exceptions as always I wanted to rattle your collective brains and ask what it the most innovative thing you have seen in coffee retailing over the last few years!

Cheers

Gary :?:
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Postby phaelon56 on Thu Apr 12, 2007 5:51 am

Can't speak for elsewhere but here in the States at the retail level I think the adoption of the Clover machine with single farm and/or single estate varietals on the menu is the most exciting new innovation I've seen recently.

The new Cafe Grumpy location in Manhattan is a great example. The only equipment, gear, coffee etc. visible above counter level is a three group Synesso, the tops of the two Clover machines, three espresso grinders (one decaf, one house blend and one for single origin espresso) and a Mahlkonig grinder for the Clover coffee. No conventional drip coffee, no syrup bottles, no airpots, no containers of coffee on the back shelf.

So yes.... pared down simplicity is the innovation.
Last edited by phaelon56 on Fri Apr 13, 2007 5:16 am, edited 1 time in total.
Owen O'Neill
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Postby Gary McGann on Thu Apr 12, 2007 5:59 am

Cheers Owen,

If I was a betting man I would have won as I had a feeling that Clover would have been first out of the hat. I have heard of the Grumpy site in Manhattan and tried to get there when passing through New York in March but Continental managed to delay my flight and I ran out of time.

While paired down simplicity is perhaps the way to go with an increasing emphasis on the coffee is location even more important in terms of making the cafe viable from a commercial standing?

Gary
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Postby onocoffee on Thu Apr 12, 2007 6:40 am

While much credit has been given lately to Stumptown for bringing it to the Third Wave spotlight, the coffee whole bean retail shop seems to be one of the biggest innovations in 2006. A place devoid of espresso production where a customer can come in and sample a wide range of coffee offerings.

Another innovation is the emergence of The Clover. While the price point keeps it from spreading like a wildfire, it's an innovative brewing technology and I'm hoping the company can sell enough units to keep itself viable and around for the long haul.

Another innovation that's also being led under the Stumptown banner is their partnership with the Ace Hotel to provide coffee and espresso service to their in-room clientele.

Something that I'm curious to see for myself in coffee retail is the usage of computerized ordering systems in a McDonald's-esque fashion where the barista is fed order details via a computer monitor that I've seen in photos from Intelligentsia's new shops in Chicago.

Perhaps it's not what some would consider an "innovation" but I like this continuing trend of openness, transparency and working to improve the lives of farmers that's been pioneered by the likes of Intelligentsia, Stumptown and Counter Culture.

While I haven't been able to travel to see things for myself, the news I keep hearing about the Nordic Barista Cup challenges our craft and our practices which, ostensibly, leads to innovation within our profession.

There's a guy in Seattle who's got something updated and exciting coming. But I can't say what yet. All I can say is that I have to have one.

Then there's that guy between Portland and Seattle that's always brewing up something innovative and on time.


In the end, I agree that much of what we are seeing in the marketplace is blase and boring. However, I think this is meant to be. The average consumer doesn't want inventive and cutting-edge, they want predictable and conventional and that's what the marketplace provides.

The innovation is going to come from a small group of people who are pushing the edges of their interests. I'm looking forward to seeing what they're gonna come up with.
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Postby Gary McGann on Fri Apr 13, 2007 1:35 am

HI Jay,

Thanks for the input. The McDonads type of ordering system has been used by a couple of operators over here for a few years now. The original place I saw it was in a crepe bar in Dublin Ireland where they had a touch screen monitor in front of each (4) crepe stations where the orders could be relayed and instructions given. The owner had planned another step which was when the order was ready the guy making the crep hit a button which displayed that the finished order was ready for the customer to collect on a large plasma screen - for some reason this element is yet to be used.

Recently Tinderbox Espresso Bar new site in Glasgow has adopted the technology and uses it to send the drinks orders to the barista - seems to be working well. You can see a couple of images Stephen Morriseys flickr account from the Glasgow barista jam http://www.flickr.com/photos/dublinbari ... 83430366/-


I like the sound of the Stumptown/Ace hotel link up - its a step up from staying in a Marriot and getting a Starbucks in the lobby. I met GM Lizz at the last Nordic Cup - nice poeple and nice company.

Look forward to further news on the Seattle must have and for further updates on the Portland scene!

Cheers

Gary :lol:
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Postby phaelon56 on Fri Apr 13, 2007 7:09 am

Gary McGann wrote:While pared down simplicity is perhaps the way to go with an increasing emphasis on the coffee is location even more important in terms of making the cafe viable from a commercial standing?


I'm in a non-urban market myself - a smallish city (150,000 down from the 200,000 we had thirty years ago). With no more than 1,000 to 2,000 people actually living in the "urban core" of our city it's safe to call this a non-pedestrian community. Add to that the fact that winter starts in early to mid November and lasts until April (we have snow predicted this weekend and I've seen as much as 6" to 8" fall in one day in early May).

Location for a business is absolutely crucial in our area. And that doesn't just mean being on a street/road that gets plenty of automobile traffic - it also has to be easy to get in and out of your parking area. Very few people around here are willing to walk very far for better quality and a surprising number will also walk out of your shop and go elsewhere if it appears that they'll have to wait more than 2 to 4 minutes to get up to the counter to place their order (that's not just in the shop I work in - I've seen it in other people's shops as well).

My point is that although an increased emphasis on coffee quality and espresso drink quality could definitely provide some competitive advantage - even in a fairly backward market like this one - if it's not coupled with a really viable location it will be a challenge to be profitable enough to survive and thrive. And you have to somehow create a hybrid structure such that people can get the relatively rapid service they have come to expect but also have the option a more esoteric approach that dictates a longer wait time and slightly higher price for better quality (e.g. a Clover for coffee and a Synesso with manual grinding, tamping etc. for espresso drinks).

I've been in some of the busiest and most successful cafe's in NYC, Seattle, Portland, Vancouver, San Franciso, Washington DC and the LA area. The dynamic and demographic in a small, less than properous, traditionally blue collar Rust Belt city like mine is radically different than in those other markets.

Heck - it's even radically different than Ithaca NY - which is only 60 miles away and can be reach in about one hour by car. I think there's a hybrid coffee business model that could be highly successful in this market but I'm just not sure I'm ready to commmit to staying in this area long term to do it. Then there's this issue: Do I walk away from a reltviely enjoyable, cushy and well paying day job with great benefits at age 51 to do coffee full time or do I stay in it part time as I am now? But I digress and all of this is best left for a different thread.

Grumpy's Manhattan location is not in a high traffic area. It's half way down the block on 20th - and more or less midway between two of the subway stations that are on 8th ( a bit closer to the 23rd Street station). But there's a small neighborhood police precinct on the block and also a fairly large number of people living within a one or two block walk of the shop. Add to that the higher level of food/drink sophistication and savvy that one can expect to find in the average resident of the Chelsea neighborhood and then factor in higher discretionary income levels than you'll find in most other cities. If they took on a space in some parts of Manhattan where the potential customer traffic is higher by a 10X or 20X factor but the rents are also staggeringly high - it might be a far greater challenge to pull off what they appear to be doing very successfully in Chelsea.

It was never jammed when I was in there (from about 9:30 AM until 11:00 AM on a weekday)but the customer traffic was fairly constant. The two people on the counter said it's steady all day and they also add staff on Saturday to keep up with the much busier traffic levels that day. I've heard (just rumor) that about half the volume in that store is Clover coffee.

Rent is probably cheaper than in many other Manhattan locations. I think it would be tough to make it a highly profitable location if it were the only one you had but with a multi-location operation it would be a goood fit.
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Postby Gary McGann on Fri Apr 13, 2007 7:31 am

Hey Owen,

I like your writing style- the coffee business more than most is tough to make a decent living out of. I liked the recent piece in Time on Starbucks http://www.time.com/time/business/artic ... 23,00.html

I dont agree with everything he says - don't believe it was ever a killer place for coffee but you can see the trend with the baked goods and the Sheryl Crow CD. Just the fact that they are moving further into music says it all. Do you remember the ill fated 'we can sell the furniture that you sit on in store phase' that was shortlived.

A close friend in the coffee business researches the hell out of his locations - he reckons you need an urban village - good residential concentration mixed with some retail and office to give you a longer day to sweat your assets! After all the rent is such a big factor in making money or not.

Here's to the people pushing the envelope and the customers that are supporting them.

Here's to better coffee, made better by passionate people.

Here's to giving the grower a living and to getting more people away from the milk based chains

etc etc etc.
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Postby phaelon56 on Fri Apr 13, 2007 9:42 am

Funny you mention that... the folks I work for part time have four stores and do their own roasting (what I should say is that I do their roasting). When I was delivering beans yesterday one of our more senior and experienced barista's was chatting with me about sales levels at the various stores. One comment of interest was that she believes her average daily sales per shift is better than that of her co-workers at that store and the others because she pushes sales of whole bean coffee.

I won't get started on lack of merchandising, training issues etc. that exist in these stores because it's not my place to comment. But in a market where the average customer gets a single $1.50 or $1.75 cup of coffeee per day and nothing else (75% of the sales on my two hour weekday morning shift fit that criteria) you must sell a LOT of coffee to make reasonable revenue numbers.

Finding something else to sell would appear to be the solution. But the slippery slope is finding things that are a goodenough fit for both the retailer and the customer such that the business becomes viable yet one does not lose the focus on quality or dilute the message that is being delivered by offering such quality.

Where do you draw the line? For me the focus has to be high quality espresso and coffee beverages but the reality is thatnon-alcoholic bottled beverages, juice, yogurt and fruit for the healthy-breakfast-on-the run crowd, a few pre-made wraps or sandwiches of exceedingly high quality, high end single origin chocolate bars and a balanced selection of frozen blended drinks are all items I'll have to consider offering if I open a retail cafe in this local market. Unless I'm willing to starve for the sake of my art - which is not an option.

If I continue on this tangent I'll drag the thread off topic - but look for me to start a new topic soon that will focus on these issues (I actually started writing it a few weeks ago but it still languishes in Notepad waiting for me to get back to it!).
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