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Coffee Retailer Discussion:
The Art of Take-Away (Cont.)

Using the business experience of his main café, Ward Fowler, president of Alterra Coffee in Milwaukee gave his take on the to-go business. "We open at 6:30 am, but the main business comes between 7:30 and 9:30 am, probably," Fowler explained. "The café is filled at that time, so we're not just a revolving door with paper cups. We have multiple, everyday coffee klatch type groups that are in there for a long time. It's not a huge café, it's only about 1,000 square feet, but it's filled during those hours. At the same time there's regular people like me who have to get to work, so we see a lot of people who are buying something and leaving with it."

Fowler talked about some recent changes his main café went though the helped the flow of the line and actually ended up bringing in more business. "Although we have two registers in our store, one register manages pounds of coffee, whole bean sales. And the other register did all drinks and bakery, and that's where the problem was. Especially on most mornings, we get a line to the door and really once you line people up to the door, it's pretty much done. Only the intrepid will wait in a line that goes outside of the door. It's been our goal to manage that line down to a point where it does not look as daunting."

Fowler continued, "We started a new register and made the structural changes in the counter to accommodate it and the hiring changes to manage it. During any time that's it's busy, we run two drink registers now, plus the bean register. And that's made a huge difference in the way it looks to the customer. It's embarrassing to admit this, but we added $40-50 a day in bakery sales and $30-60 a day in just coffee sales. Our store, at 1,000 square feet is not really a three-register store. Cramming a third register into the mix… it ended up working great, but it required all kinds of changes. We set up the second register that was for basically everything but blended drinks and espresso drinks. We didn't want to lose bakery sales - we thought if we limited it to drip coffee then people are just going to get that to be quick and they're going to forgo the muffins. So we restructured the bakery setup so that it merchandised and functioned for both registers."

Fowler said right now his company isn't making any conscious efforts to grow the to stay side of the business, but he sees that as a natural reaction to a few variables, "I don't have any real sense that we're growing the takeout side of the business. I suppose that's the case because we are limited in seating and once the seating is maxed out, it's not like you can grow the in-store business a whole lot more. We do notice that in the summer time we do better than in the cold weather because we have outside seating that accommodates more people. That may be a little bit counter-intuitive, but we do better in the warm whether just by virtue of having more seating.”

Alterra will be opening a fifth store in late July and had some large-scale structural considerations they needed to work out in order to ensure the proper flow of traffic in and out of the store parking lot. Fowler talked about the process they went through: "The fifth store is a bigger project for us. We expect it to be a pretty high-volume store. Our main store is on a one-way street that is pointed the wrong direction for morning traffic, yet we still do great in the morning. We're in a neighborhood of sorts, so we get a lot of people walking over. We're definitely defying the conventional logic. But the next store is on the biggest north-south morning thoroughfare. The traffic volume is huge and we are right on the right side of the street for people heading into downtown Milwaukee. There's a big parking lot behind this building, which is a stand-alone building, and when you get into the line everything's fine. But when you need to exit the lot, it is a potential traffic pile up. We have succeeded in getting the accommodations by the Department of Public Works and County Parks and all the other bureaucracy involved in letting us basically create an egress road that's going to have the same effect as the easy off, easy on toll way. We think this road is going to be the key to managing the morning traffic." This proves that retailers not only need to be concerned about the flow of the foot traffic during the morning, rush, but they should also be mindful of auto traffic flowing in and out of their parking area.

Fowler offered his thoughts on debit cards, "If the per ticket sales increase the way the debit card people promise, then it's probably a smart idea. But there is a per transaction fee for the debit card instruments that we've looked into and they're just too high. So that's one of the things we've struggled with. But I think it's inevitable that we're going to do that at all of our stores."

Jessica Durrie, one of the owners of Small World Coffee, talked about what it's like to have a retail store near a major university and how that affects their takeout business. "Our location is pretty much across the street from Princeton University. And there is a lot of foot traffic in our area and a lot of local merchants and university-related people come into the café. The same pattern seems to be occurring, with regards to the for here business verses the takeout business. The highest percentage of take out is AM and then it decreases throughout the day. I would say in the morning it's about 60% take out, 40% for here. It evens out more as the day goes on. The later in the day the more likely they are to sit and 'chill out' in the café and not take it with them."

When managing the morning rush, Durrie explained the system they have that allows things to flow smoothly. "We have a really tight system of drink calling - and each person in their station has a set of default tasks that they know they have to do. So that allows for a really good flow. People aren't running into each other and two people aren't jumping on the same thing at the same time. They know what their 'mission critical' tasks are during the busy time."

With regards to the debit card, Durrie said they like the idea, but just haven't had the time to implement that at their store yet. "We've had a couple of customers ask us about that, particularly, for instance, teachers from the Waldorf School come here and they're buying coffee for a whole bunch of people and they've said that kind of service would help them. It's a good idea, but quite frankly, we haven’t had the time to do it. We might do it some day in the future."

With the rise of the to-go business, retailers find themselves incurring different costs. Durrie explained, "I know our disposable costs have gone up, since we've opened, quite a bit. We don't offer java jackets. If someone can't handle the heat of the cup, we double cup it for him or her. What has changed over the years is that a lot more people, even if they're staying at the café to sit down, still ask for their drink to go. That's increasing more and more. When we do raise our prices, which isn't very often, disposables are always a factor in whether or not we raise our prices, not just the cost of the bean or the milk."

As far as a future outlook, Durrie actually wishes everyone would stop rushing around and take a few minutes to sit down and enjoy their coffee. "Everyone here is already so busy as it is, I can't imagine people getting busier. I hope that that doesn't happen. I hope people take the five minutes and just sit instead of go, go, go."

Elizabeth Bouffard, director of retail at Intelligentsia Coffee Roasters noted that the take out business has "stayed pretty stable" over the last few years and amounts to about 85% of their total drink sales.

A change she has seen at their retail store in Chicago is that they are filling more whole bean coffee orders, "The takeout is going more towards whole beans and not only on just grabbing small cup of coffee in the morning to go to work. We are actually filling a lot more whole bean coffee orders."

Intelligentsia just introduced a debit card, "We're using it not only as a frequent drink card, but in lieu of gift certificates. And when you buy one at 20 dollars, you get a free drink, which I'm sure is probably a pretty common practice. That has helped loyalty. We've had customers coming back more often." In addition to the debit card, they still have a drink card to encourage customers to buy 10 drinks to get one for free.

Bouffard continued, "The debit cards also have a way to track customer loyalty and as smaller companies like Intelligentsia and privately-owned companies start buying software to work with that and loyalty cards, I just think that that will definitely increase things."

She explained that their store has "bar rules" when it comes to the heavy foot traffic they get during the morning hours. "We have one person a the register, two people making drinks, one person facilitating orders (getting pastries and getting brewed coffees), and one person constantly brewing. We also have a second register so that when the line gets really long anyone who wants simply brewed coffee can go to that second register."

The process of perfecting one’s take-away business has more to do with small, ongoing refinements rather than any particular silver bullet. As Coffee Bean & Tea Leaf’s Clark alluded to, finding the right mix of speed and service in the drink line is a fine art. Even large chains often need to make modifications to their systems on a store-to-store basis. The take away customer, obviously, is a different customer than the for here patron and has a different set of priorities, yet each needs to get the same level of service and the same great tasting beverages, or it’s their business, not the drinks, that they’ll be taking away.

Timothy J. Castle is the president of Castle Communications, a company specializing in marketing and public relations for the coffee and tea industries. He is also the co-author (with Joan Nielsen) of The Great Coffee Book, recently published by Ten Speed Press, and the author of The Perfect Cup (Perseus Books). He may be reached at: (310) 479-7370 or via E-mail at: qahwah@aol.com

Tea & Coffee - September/October 2002
Theta Ridge Coffee


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