the Independent Coffee Retailer in 2007
by Bruce Milletto
the early years of retail specialty coffee, few independents
developed savvy marketing programs or strategized about how to
grab market share. The industry was still new and the biggest
challenge retailers faced was how to educate the public about
the difference between a mocha and a cappuccino.
Competitive challenges, that were not problematic or did not
exist at all a dozen years ago, loom for the specialty coffee
retailer in most parts of the U.S today. These challenges are
certainly not impossible to overcome, nor should they dissuade
budding entrepreneurs from opening a new business or expanding
an existing one. However, they must be taken seriously to stay
The biggest challenge is how to compete against the chains. At
one time there was only one actual national chain… Starbucks.
Today, there are hundreds of smaller chains that you must consider
in your overall and ever-changing business plan.
I have written and lectured many times on exactly how to out-market
a large national chain. I often use the following analogy: “You
are the skateboard and they are the semi truck and both of you
are trying to get through traffic in New York City. Maneuvering
a skateboard is much easier.” This is still true, but your
skateboard will get you there faster and your movement will be
swifter around obstacles only if you plan your course well and
do everything to near perfection.
When you are marketing against a smaller regional chain, your
battle may be much more difficult. You may not have the advantage
of changing course faster than they do and you may not be able
to market yourself as understanding the local playing field better
than they can.
A final challenge that retailers now face in almost every part
of the U.S. is increased competition with other independents.
Ten years ago there may have been only a few coffee establishments
in Columbus, Ohio, but today there may be dozens upon dozens.
There is no single magic bullet to success. However, no matter
how formidable the competition, only hard work, a great location
and savvy business practices will lead you to true success.
Two of our clients, who opened their business in an area with
impressive competition, contacted us recently. The young couple,
whose coffeehouse is less than 2,000 square feet and has been
open three months, is averaging about $1,800 a day during the
week and over $3,000 on weekends. Their numbers are improving
each month, and I speculate that they are not even close to reaching
the top of their growth curve. During the next two years, if
they continue to do what they have done since conception, they
should see huge growth.
At our first meeting with these clients they told us they knew
they would have an uphill battle for success, and that growth
would require hard work. They knew their product, operational
systems, marketing, layout and design, customer service and ambiance
had to be better than that of their existing competition. They
listened to professionals and actually heeded advice, which is
almost unheard of today.
The year 2007 is a time in the life cycle of the U.S. specialty
coffee industry where as an independent the only way to see growth
and success is to manage your business as though your business
life depends on it, because it does. To be successful, you must
hire smart, train well, and maintain and monitor every aspect
of your business. There is no doubt you must work harder and
smarter, because even though the challenges are more formidable,
there is still success to be had in the challenging retail specialty
Milletto is the President of Bellissimo
Coffee InfoGroup and
Founder of the American
Barista & Coffee School.