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Coffee shops with a “Smooth” Business Plan
By Shane Murphy

With the economy in a near unprecedented meltdown and more coffee shops on most every corner, it is critical for independent retail specialty coffee house and drive-thru owners to diversify their menu to attract more customers in the off season and slower times of the day. Start with smoothies.

In part, financial survival is dependent on adding additional products to the menu that have a demand while appealing to the vast untapped health and diet conscious consumer. The product line that can profile perfectly to those criteria is a real fresh fruit smoothie.

Americans consumed $2 billion in smoothies in 2007, according to Mintel International Group; with one analyst predicting the demand for smoothies will increase in annual sales by two-thirds from 2005 to 2010. So what's behind this smooth trend in America?

It can easily be explained: convenience, taste and healthy lifestyle choices. From teenagers who love the taste to boomers who are looking for a healthy beverage alternative, smoothies are the answer. There is, however, a vast difference between “healthy” smoothies and popular sugar-laden fruit smoothies with little more nutritional benefit than a C-store slush drink. The growing popularity of smoothies in the U.S. can be attributed to juice bars in health food stores and smoothie chains, such as Jamba Juice and Smoothie King opening up locations across the country. The large chains promote “tasty, nutritious blends that are ideal for a healthy snack or as a meal replacement.” There is, in fact, a real opportunity to make this promise an honest product benefited by creating vitamin-rich smoothies in a variety of real fruit flavors, blends and nutritional additive value.

A coffee and smoothie shop located in a convenient spot where one can quickly pick up a healthy snack or an alternative to breakfast or lunch promises to have a better chance of making a profit in these tough economic times - if it is done with originality. Imagine bringing together the Starbucks and Jamba Juice brands, combined in one double-sided drive-thru utilizing the same employees trained to serve both product lines. The fact is, it was quietly tested in a neighboring Seattle area B market, before Starbucks rolled out its new nutrition based smoothie program.

Now imagine how you can keep the quality control, the speed and consistency of both espresso coffee and real fruit smoothies without sacrificing quality in either one. Such a company has created exactly that: Java Espress and Juice Jungle drive thrus. The parent company Kool Beanz, Inc., Idaho Falls, Idaho, has designed a building and menu concept with two distinct brands under one roof. The concept isn’t hard to imagine if you picture that KFC, A&W and Taco Bell have begun to share the same store with their dual brand concepts.

Yes, you offer smoothies, but does the Jamba Juice and King Smoothie customer think of your specialty coffee branded business as a smoothie destination without menu and barista prompting?

My company first opened Java Espress in 1993 as a single location in an 8’x10’ two-window drive-thru building, and grew to six stores in Idaho. In 2001, I recognized the importance of having a diversified product line and saw the growing trend toward smoothies and health drinks. I then added another brand to my Java Espress drive thrus.

Juice Jungle came to life and has became a brand of its own today with proprietary real fruit drink combinations and a line of Koffee Kickers, a frozen blended coffee smoothie with non-fat yogurts. With such an immediate customer response, the current single brand Java Espress drive thrus became obsolete, and a new design was eminent in order to sustain profitability in the midst of this severe and growing recession.

Being located in a climate with four seasons, the beverage combination enabled the sales to average throughout the year, while cold temperatures encouraged coffee sales and the warmer days created more demand for smoothies. Obviously, adding a cold drink destination alternative also works great in sunny locations like Southern California, Phoenix and Florida.

With our two-brand destination concept we have literally created “the perfect blend” of fresh real fruit smoothies and “the excellence in gourmet coffees” for an expanded customer base. The sales of each product line peaks at different times throughout the day.

The goal is to keep the traffic flowing consistently all day, every day, all year long. Sound easy to implement? It can be difficult to add smoothies to the menu.

There are a myriad of things to consider in the transition to a smoothie menu line-up. First and foremost is always space for equipment and preparation. To add real fresh fruit smoothies, a store you will need adequate freezer space for yogurts and fruit, dipping wells, juice machines, counter space and blenders. For this reason, many shops take a shortcut into smoothie production by using a variety of premixed products that are available from various suppliers around the country. Most of these simply are a frozen sugar-filled puree, that when blended with ice will create a textured frozen drink. While this is the most common smoothie, it is best to use only fresh ingredients. Even the major smoothie chains would never use a pre-mixed product. Likewise, Starbucks, like Java Espress and most other coffee shops would never serve a version of an instant coffee or espresso. So why should you use fresh ingredients in your store? Customers will know the difference and will pay for the health and taste benefit of having a fresh treat made just for them.

As with your coffee shop, smoothie branding is central to establishing your business as a duel destination. For my retail business, I didn’t want Java Espress to be serving smoothies like every other specialty coffee business in the market. Instead, I wanted to create a unique and separate brand for the smoothie side of my drive-thrus and soon-to-open coffee houses. With that decision made I landed on the Juice Jungle concept.

Having a unique brand enables Java Espress and Juice Jungle to create their own recognition and establish their own customer base. When a customer recognizes your brand they recognize more than just your business name, they recognize your building, your products, your marketing and your staff. A good brand will tell the story about who you are and what you offer by simply looking at your facility. McDonald’s, for example, has the “golden arches” to tell their story. In fact, it is hard to even see the words McDonald’s spelled out on the arches; they can simply fly solo and have a recognized brand. The arches tell the whole story, and everyone is familiar with who they are and what they serve. Having a great logo, menu design and unique ambience or building design will tell your customers that story. Establishing a great second brand will also make marketing and business unique in a sea of common building designs and menus.

Juice Jungle uses a number of ploys in its branding, including the menu with named drinks to tell its story, like the Orangutango, Chocolate Monkey, Berry Baloo, Tsunami Splash or a Jungle Fever loaded with supplements.

Kool Beanz, Inc., is now franchising our Java Espress and Juice Jungle drive-thru shops that offer the great benefit of two brand destinations in one location. New drive-thru design has grown from the first 8’x10’ store to the new franchise store, measuring 44’x 12’. The new design has four windows, two on each side, enabling the customer to order at one and pick up at the other. The new store design is ergonomically functional with two barista stations positioning dual espresso machines on one side and a smoothie production line on the other. Four people can work comfortably and make drinks in rapid order. “We love this building design,” said Mike Kinghorn, franchise sales manager for Kool Beans Inc. “We can really move the customers through during peak busy times while still giving them the one-on-one attention that they deserve at each window. It has taken time to design and understand the even flow of products without sacrificing the customer service and speed of the business.”

Having a great duel brand can double your exposure, and ultimately, the bottom line.

Shane Murphy is founder/owner of Kool Beanz Inc., Idaho Falls, Idaho. He can be contacted at smurphy@javaespress.com or +1(208) 521-4564.


Tea & Coffee - December, 2008
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