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Coffee Retailer Discussion:
The Art of Take-Away


It is hard to remember the day that the to-go or take-away segment of the specialty coffee trade was not the dominant segment. The phenomenon has come to its full fruition in the U.S., of course, but the idea is still slightly alien throughout much of Europe and parts of Asia. Many Japanese still think the combined activities of walking while ingesting (food or drink) should be engaged in only by certain types of livestock (this would include Americans). Although the inspiration for much of the current take-away business in the U.S. came via the visit of an ex-Brooklynite to an Italian espresso bar, the custom at those bars is to quickly consume one’s drink while still at the bar. Americans, in large part, take their drinks and consume them elsewhere, or while going elsewhere - while walking or driving, ascending an escalator, descending in an elevator, riding a bus, traveling on a train, etc., etc. The numbers (the sales and cash flow projections) that justify and sustain many of the coffee bars throughout the U.S. could not be achieved, in fact, if people did not buy their drinks and leave the stores, thus making room for more customers.

The successful (so far) debut of Starbucks in many foreign markets leads one to believe, however, that take-away will continue to thrive and, probably, spread into new markets. Given that, there is hope that coffee consumption will increase world wide because many new markets for take-away do not already have a custom of drinking coffee at home that take-away would otherwise be replacing, as it has done in the U.S.

The advent of the to-go drink and prepared beverages in general have had a powerful impact on the on the direction of the specialty coffee business over the past 15-20 years. Indeed, what is more relevant now is that the focus of the business has become the preparation of ready-to-drink, portable beverages rather than an emphasis on a particular product (it used to be coffee, remember?).

In order to assess the state of the take-away art, we spoke with several people who are trying to perfect it on a daily basis. The first was Jay McDonald, director of operations at the Los Angeles-based The Coffee Bean & Tea Leaf. He began by talking about how the industry has really moved towards more takeout in the last few years. "Over the last year or two I think that the industry in and of itself is mostly take out. I've been here three years and I was at Starbucks for about five or six before that. Ours is actually a little more 'for here' than most because we tend to build our stores a little bit more comfortable if the people want to stay. And we also have real cups and real plates for people if they want to stay 'for here.' They don't always like to use them, but we have them if they need them."

McDonald notes that the takeout business depends on the store location and other variations. He offered a general idea of those percentages: "I would say we have upwards of some stores where maybe 40% of the business is 'for here,' down to probably 10%, which means 60 and 90 would be to go, depending upon the store and depending upon the location."

He explained some of the variables that dictate which type of business a particular store serves most. "The sit-down ones tend to be in more of a neighborhood type of situation. You know how difficult it is to park, particularly in Los Angeles, if you are not going to a mall. If there's things in a given area where people can walk to, then it tends to be more of a neighborhood and [the shop] tends to be a hangout. If there's restaurants around there as well as some shopping, it will be more of a 'for here' business."

Whereas some stores may have more sit-down business than take out, commuter business tends to be a constant. "The commuter business is kind of a given in every store," McDonald said. "It depends on if it's a driving commuter - [which] we get from the stores in the Valley and the stores on the outskirts, farther from the central core of L.A. But even the stores in L.A., like Beverly Hills or on the west side and even downtown, there's the commuters - they get in the office, they come in and then they go right back to their office.... We also do some fountains in some locations to kind of encourage the afternoon business as well. You put the fire pit in, particularly in the evenings, so they come and hang out and listen to music, have some dessert or meet friends there.”

McDonald talked about the advantages of the debit card that Peet’s Coffee & Tea has employed for many years and that Starbuck’s recently adopted. "Primarily it enables us to hopefully speed the service a little bit and people can move on through without fumbling with the cash. Also I think it adds a little value from the customer's point of view and to the brand for carrying something in their wallet that they want to carry and that they want to put their money on and want to spend money in a particular location."

And McDonald is always looking at things beyond such things as the debit card to speed the flow of lines. "When people want coffee, for the most part, it's in the morning. So you have these real crunch of lines where you're trying to get a large amount of people through with a varied amount of different types of drinks and you try and get them through in a relatively short period. Whether that's operational systems, whether that's technical, whether that's high tech, whether that's screens, there's lots of things that we're trying to do to try to come up with the best bang for the buck, so to speak. To get more people through, it enables them to be happier and coming back to us so that we don't lose out on that morning business."

McDonald summed up his thoughts on the takeout business: "I think that as much as over the years people have tried to make the coffeehouse environment one of kind of a hangout that's always going to be there, unfortunately, with society today, as much as people really enjoy doing that, most of them don't get to. And they don't want to give up on their coffee, so a lot of it is going to continue to be take out. I think the shops like us and Starbucks and Peet's and anybody else just need to continue to figure out ways to make it as convenient for people as possible while still giving them the best product."

One of McDonald’s colleagues, Tami Clark, director of marketing and strategic alliances for The Coffee Bean & Tea Leaf added, "A lot of people are moving towards drinking their coffee that way - in a paper cup. They're so used to it. They may still get a takeout, but they'll sit down at a table. I think a paper cup and our recyclable plastic ice blended cups provide people with a sense of convenience. They can get up and go, they can sit down and relax. It's just a matter of preference. So many of our drinks are made custom, though. It takes some time and it's a constant battle between quality and length of service. And they're willing to wait in line because they want their chai latte made with an extra scoop of powder."

Continued on next page...


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