The Wall Street Journal covered McDonalds’ plans to bring baristas and coffee bars to its 14,000 locations. Writer Wendy Bounds made an interesting observation that McDonalds will compete with Starbucks, but not necessarily the smaller shops.
Starbucks has truly created the coffee industry and made it possible for smaller chains like Cuppy’s Coffee to even exist. It is interesting, however to see how Starbucks has become more like McDonalds in that they have streamlined their processes. Because Starbucks is a public company its decisions are driven by profits. Smaller, locally owned chains like Cuppy’s Coffee can still focus on what the customers want. This means hand-pulling each espresso shot and staying true to the Italian barista-customer experience. I would not call McDonalds move into the coffee market as the saving grace for smaller shops, but I do not think they will not be able to provide what the smaller coffee shops can.
While the smaller shops gain customer loyalty through authenticity and by offering a sense of community, to some customers a cup of coffee is still just that, a cup of coffee. If McDonalds is offering gourmet coffee too, it is just one more option for consumers and it all boils down to location and convenience.
Move over Starbuck®, there’s a new cup in town, offering a different experience and taste of specialty coffee. Cuppy’s Coffee, Smoothies & More, Inc. headquartered in Fort Walton Beach, FL is positioning itself to be the coffee shop of choice when it comes to coffee connoisseur’s taste buds. In the past, consumers had a relatively small selection of coffee houses in which to purchase a latte or fruit smoothie. Most industry experts and insiders agree that Starbucks® has a lock on the specialty coffee drinking segment of the population, this being fueled by their enormous growth both nationally and internationally. But in 2008 Cuppy’s Coffee is giving America a choice. Cuppy’s Coffee, Smoothies & More offers an exciting alternative to investors, entrepreneurs and those wishing to start their own business in the specialty coffee industry. From an investor’s point of view, those who were left out in the early days of Starbucks’® now may have a second bite at that bean.
Introduced on a small scale in the late 60’s, lattes, cappuccinos and espresso based beverages have made a tremendous jump in appeal to consumer looking for a product to satisfy their caffeine addiction. Over the next several years, thanks in part to Starbucks®, consumers were introduced and educated in mass to the delights that specialty coffee has to offer. One marketing slogan, Cuppy’s Coffee proudly shouts is ‘Taste the Difference’ which is reflected not only in coffee but in the service and quality of all their products. According to 2006 statistics from the Specialty Coffee Association of America¹, the percentage of American adults consuming specialty coffee drinks stands at 16%, up 3% from 2002. The specialty coffee market size has grown annually from and $8.3 billion dollar industry to $12.27 billion dollars during the same time period. Cuppy’s Coffee has seen a spiked interest in people wanting to be apart of this growing industry. Sales over the past year have steadily risen every month since the new company was formed. So what is it that sets Cuppy’s Coffee apart from their competitor?
“Taking highly selected beans and roasting them to perfection, and making sure our franchisees have the freshly roasted beans in a timely fashion, is one of the keys to our popularity and success.” states Amy Hiller, Vice President of Operations with Cuppy’s Coffee. “Our competition relies heavily on mass roasting low grade beans and then stocking this product on shelves for months. We expect our franchisees to use only beans that have been roasted within a two week period. The taste is very noticeable” she continues.
Cuppy’s Coffee chooses not to use fully automated machines, unlike many other coffee houses, but instead elects to train and educate its franchisees on the art of being a barista. Training to be a barista is not as easy at it seems and requires dedication and a passion for coffee. Franchisees learn on semi-automatic espresso machines, the nuances of the grind and the techniques of preparing a recipe for success as well as doing all of this in a timely fashion. This training allows Cuppy’s Coffee to stand out and avoid the pitfalls of its competition. For example, in a article printed in the Wall Street Journal Howard Schultz chairman of Starbucks® questioned in a memo ‘whether Starbucks’® drive for growth and efficiency has diluted that experience. In this blunt Feb. 14 memo, he warned executives that the chain may be commoditizing its brand and making itself more vulnerable to competition from other coffee shops and fast-food chains. The nearly 800-word memo questioned whether Starbucks’ automatic espresso machines, new store designs and elimination of some in-store coffee grinding may have compromised the “romance and theatre” of a visit.’²
“People want to feel they are special” Rachel Clark, Vice President of Marketing with Cuppy’s Coffee states. “Remove the human element and you in turn remove the experience and the very thing that makes specialty coffee special. Consumers will spend the extra dollars for a great drink but they’ll give you something more when you treat them special, their loyalty.”
Cuppy’s Coffee founded in May of 2006 bought the assets of a struggling brand and quickly turned the industry on its tail. Not only offering brick and mortar cafes, Cuppy’s Coffee went after a segment of the market that has tremendous growth potential, the drive thru. Concentrating on offering a complete package, Cuppy’s Coffee decided to bring all aspects of opening and operating a coffee business in house. Franchisees have assistance in real estate, finance, marketing, purchasing product and customer service all in one location. This business format principal sets Cuppy’s Coffee apart from other competitors and allows the company to keep better records on the growth and success of its brand.
“We no longer are at the mercy of third party vendors when it comes to assisting our franchisees, we now have the ability to monitor and track all stages of our franchisees openings and successes.” Doug Hibbing, President of Cuppy’s Coffee says. These differentiating factors have paid off in terms of recognition throughout the franchising community. In May 2007, Cuppy’s Coffee was awarded the American Association of Franchise and Dealers³ highest award for fairness and dedication to franchisees. Scoring the highest in the Association’s history with a 99.5% overall rating, Cuppy’s Coffee can proudly state, “There’s a New Cup in Town”.
Cuppy’s Coffee offers the drive thru modular building and cafes, and a line of products that are designed and marketed to reach the masses. Branding the name Cuppy’s Coffee can be found at your local Friday night high school football game in the form of Cuppy’s Coffee mobile unit, or in the main foyer of your executive offices with a Cuppy’s Coffee cart or kiosk. Also, look for your local Cuppy’s Coffee when you head into the mall for a little shopping.
The population, entrepreneurs and investors are ready for a new and exciting coffee house concept. In 2008 Cuppy’s Coffee, Smoothies & More is stepping up to be that choice when it comes time to satisfy the need for a refreshing specialty coffee experience.
For more information on Cuppy’s Coffee, Smoothies & More and/or to find a store near you, visit their website at www.cuppys.com
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SOURCES:
Cuppy’s Coffee, Smoothies & More www.cuppys.com348 Miracle Strip Pkwy Ft. Walton Beach, FL 32548 (888-241-4324)
¹ Specialty Coffee Association of America www.scaa.org 330 Golden Shore, Suite 50 Long Beach, CA 90802 Phone: (562) 624-4100
² Wall Street Journal www.wsj.com online edition February 24, 2007
³ American Association of Franchisees & Dealers www.aafd.org PO Box 81887, San Diego, CA 92138-1887 (800-733-9858)
Cuppy’s is proud to sponsor the First Annual Scholarship Essay Contest for your baristas. The Grand Prize winner will receive a $500.00 Scholarship Savings Bond towards the college of their choice and publication of their essay in the Bean Street Journal.
All Cuppy's Coffee high school seniors are encouraged to enter this contest. Cuppy’s has always been about our families, community and the education of our youth. This essay will not only encourage our baristas to succeed, but also promote a family atmosphere among all our open stores nationwide. Details for entry can be found online at Cuppys.net. Show your support for our young people by encouraging them to enter.
