The
Espresso Drive-thru and its Place
in the Specialty Coffee Industry
by Mal Montoya
While
Starbucks, Java City, Second Cup and other in-line retailers are filling
the American landscape with espresso cafes, a relatively new and growing
distribution channel for specialty coffee is making its presence known:
The espresso drive-thru. What started in the Northwest in small sheds
bought at the home improvement store, is evolving into one of the industry’s
fastest growing service-delivery models. The expansion of drive-thru
operations southward into California and eastward across the country
has sparked curiosity in the minds of business owners and consumers
alike. The new drive-thrus are architecturally designed, adding flare
and pizzazz to "the look of specialty coffee." And the quality
of the products is just as appealing as the buildings.
Companies such as Starbucks have helped introduce
consumers to the world of specialty coffee and espresso-based drinks.
Every mall and strip center has numerous coffee cafes, and most neighborhoods
have a corner cafe within walking distance. In the past year we have
seen an increase in the number of espresso businesses opening their
doors and an even greater number of people preparing to enter the
market.
With the fast-paced lifestyles that so many of
us have become accustomed to there is less and less time to stop and
relax with a shot of espresso and read the paper. The espresso drive-thru
provides an alternative. By offering a high quality product in an
easily accessible environment, espresso drive-thru owners are redirecting
the consumer market previously owned by in-line cafes.
And what a natural match. Coffee has been with
us for hundreds of years. The success of McDonalds and Burger King
has proven the viability of drive-thrus. So, what could be a more
natural union than coffee and drive-thrus? Once thought to be a fad,
espresso drive-thrus have succeeded and are growing in popularity,
proving that a marriage between quality espresso-based drinks and
the drive-thru concept is one that will last for many years. Truly,
it is a "blend" made in heaven.
While
the concept is undeniably a natural blend, one must decide if he or
she wants to add the "whip cream" on top and open a drive-thru
of his or her own. For an espresso drive-thru owner, annual gross
profits can be very attractive if he or she pays proper attention
to the viability of the site, demographics and traffic counts. Compared
to other small business opportunities, the return on investment in
the espresso drive-thru industry is better than most. When placed
in a good location, an espresso drive-thru can serve 300 cars daily
with an average ticket of $3.25 per car. This can generate annual
gross revenues of $343,200. If you are an owner/operator, an efficient
manager and "watch those pennies," you have the potential
to net pre-tax between $75,000 and $100,000 per year. On the expenditure
side, development costs can vary from city to city and state to state.
For example, in California your total development costs, including
the drive-thru building, equipment and startup inventory, site cost,
etc., typically run between $150,000 and $200,000. These numbers will
vary depending on building design, site cost, desired equipment, etc.
Although a fun and rewarding business venture,
espresso drive-thrus are not without their challenges. As with anything
worth having, the opening of an espresso drive-thru will require a
great deal of work and perseverance. The old real estate saying, "Location,
Location, Location," also rings true for the drive-thru industry.
Locating a viable site is the owner’s first priority. Many variables
contribute to the viability of a site, including planning and zoning
restrictions, building and health regulations, traffic counts, demographics,
etc. The next critical step, and perhaps the most important one, is
working through lease negotiations. Signing a well written and agreed
upon lease can save you thousands if not hundreds of thousands of
dollars. It is well worth the investment to seek the services of an
individual or firm to negotiate a lease on your behalf. Other challenges
will include developing a business plan, obtaining financing and the
appropriate permits. However, for an owner committed to a successful
business, overcoming these challenges can prove to be well worth the
effort.
The future of the espresso drive-thru industry
looks very promising from both the owner’s and consumer’s
view point. The specialty coffee industry is growing at a healthy
pace and the drive-thru market is still virtually untouched, especially
as you move east across the country. If you want to be self-employed,
enjoy working and interacting with people, and have the persistence
to overcome the business challenges, an espresso drive-thru business
is a rewarding and profitable venture to pursue.
And now is the time to get in on the ground floor
of this new and rapidly growing service-delivery model to fulfill
the demand of a commuting clientele, by supplying what we as a nation
of coffee consumers want: Coffee, made specifically for us, that is
quickly and efficiently accessible from our cars.
Mal Montoya is a partner in Java Espresso Concepts,
LLC a consulting and manufacturing company, based in Yuba City, California.
He can be reached at 530.751.7700 or visit http://www.espressoconcepts.com
.
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