Of course your business is doing well. Everyone needs coffee. We hear it from customers every day as they enter our bustling coffeehouses. Although it is true that specialty coffeehouse sales have outperformed overall US foodservice operations (according to the most recent SCAA Quarterly Sector Report, specialty coffeehouses are growing 5–10% compared to flat sales in foodservice), selling coffee has become more difficult. The cost of doing business has increased significantly, with menu price increases that are not able to keep up with the cost of inflation. Even though relief appears to be on the way in 2012 due to moderating coffee and dairy costs, many coffee retailers are playing financial catch up while exploring ways to diversify their product offerings and expand sales opportunities throughout the day. Yes, coffee has survived, but not without retail making some necessary changes. What does specialty coffee retail look like now, and what does it take to succeed?
As the co-owner of Coffee By Design (CBD), a small specialty coffee roaster/retailer company, I’ve often struggled with how one defines success. Opening the doors to our first coffeehouse in Portland, Maine, in 1994, we began a community coffee company as a husband/wife team and one part-timer with the belief that a great cup of coffee can change the world. Today, we employ 45 people in four retail locations in Portland and Freeport, Maine, and a coffee micro roastery, which roasts over 30 specialty coffees. We are having our best year yet—both in sales and profitability—but it’s been a journey, especially since the financial crisis began.
Having opened our business during a recession, we knew well that coffee was a luxury, but felt that it was a relatively reasonably priced indulgence, that brought joy. Over the years, we have experienced our share of highs and lows. But at no other time in our business as a coffee retailer have we been more challenged than when the most recent recession began and coffee prices (along with everything else) reached historic highs. We, like many others, were faced with a multitude of decisions regarding which direction to go in order to grow. Many people we know shuttered their doors; others continue to struggle.
What we have found throughout 18 years of business is that times like these give us the opportunity to dig deep inside (not bury our heads), rediscover why we are in the business in the first place, and remember what makes our coffeehouse(s) unique in a highly competitive marketplace. Many of these points are basic….but it’s amazing how often in the busyness of business, we forget them. Whether you are new to specialty coffee or have been in it for some time, you will hopefully gain something from the lessons that we have learned that have allowed us to enjoy continued success (yes, success) as a specialty coffee retailer.