Coffee bars cater to growing market

Sponsored by WhiteWave Foods.

Coffee bars are popping up in restaurants, onsite foodservice operations and a multitude of convenience settings as Americans in growing numbers seek out a satisfying cup o' Joe while operators with an eye to the bottom line cater to their demands.

“Coffee is a commonly consumed beverage that cuts across many age and socioeconomic groups. It’s also a status symbol for many people,” says Amy Myrdal Miller, president of Farmer’s Daughter Consulting, a culinary and nutrition communication firm.

“There are endless opportunities for customizing a program and offering guests something special, something different,” Myrdal Miller says. “And — the best part — coffee programs, like other beverage programs, can be very lucrative.”

Clearly all statistics point to a continued robust coffee market. The average consumption in the United States — the largest consumer of coffee in the world — is 3.1 cups per day, according to the New York-based National Coffee Association.

More than 50 percent of Americans over the age of 18 drink coffee every day, which represents more than 150 million people. Specialty coffee sales are increasing by 20 percent annually and account for nearly 8 percent of the $18 billion U.S. market.

Currently, there are about 24,000 coffee shops in the U.S., but that number is expected to more than double in the coming years.

These trend lines bode well for entrepreneurs who want to capture a share of that business by running a successful coffee bar program — one that allows guests to enjoy a customized beverage.

“We continue to see the importance of customization and the concept of 'Fast, Fresh, Mine' resonating with away-from-home consumers — they want to get a fresh cup of coffee quickly and prepared just the way they like it,” says Tim Gira. brand manager for Denver-based WhiteWave Foods, parent company of International Delight. “We’re seeing this with both hot and iced coffee and believe this trend will continue as new formats [i.e., cold brew] help drive category excitement and growth in away-from-home channels.”

At the same time, Gira adds, “Considering nearly 60 percent of consumers aged 18-plus drink coffee daily and more than 80 percent use both creamer and sweeteners, it’s imperative that operators have the right mix of cream and flavor options that can help satisfy current customers’ needs while also attracting new consumers.

Lorna Donatone, region chair for North America and chief executive schools worldwide for Sodexo, agrees. “Add-in’s are very important,” she says. “Heat variations, blend variations and, of course, flavor variations.”

Maeve Webster, president of Menu Matters and trends analyst, says businesses can take steps to ensure a coffee bar’s success.

The right fit

“First, an operator has to make sure a coffee bar makes sense to their operation if they are, in fact, not a cafe. An Italian-style coffee bar in a Mexican restaurant would make no sense and could throw off the experience unnecessarily,” she says. “Second, the coffee bar can't be too complicated so as to create other operational issues such as labor, service time, etc. Finally, the operator needs to know the customer and what makes sense to them. A high-end, trendy coffee bar likely would make little sense to a customer base that's predominantly boomers.”

Dennis Lombardi, consultant and president Insight Dynamics LLC, cautions a successful coffee bar operation shouldn’t try to be all things to all people right out of the gate. “This is a walk before you run exercise. To start, pick a small subset of what you think you might eventually offer. Think about the equipment, what you think your customers will want, your operations and how that breaks down,” he says. “In most cases it will be part of food theater and visible to the customers.”

Ken Toong, executive director at UMass Auxiliary Enterprises, says successful coffee bars have a story to tell. “I think you need to tell the story why your coffee bar is better than others in a crowded setting. Students, faculty, and staff all tend to be creatures of habit, it’s very important to use marketing that drives them to the location or they will be hard to divert from their routine,” he says.

Satisfy customer cravings

Aside from bringing extra dollars to the bottom line and giving guests a larger choice of craveable beverages, Myrdal Miller sees another upside to coffee bars.

“The big benefits of coffee bar programs compared to many others are the sensory experiences. Aromas alone can let diners know you have a coffee bar program, which is a lovely upside. But aroma alone won’t make a coffee program successful,” she says.

Promote it!

Myrdal Miller says it is important to promote and let guests know about the coffee program through signage, on menus, and via service staff and existing outreach programs.

“If you have an email program, use that to begin with. It’s fast, inexpensive and can help reach a larger audience very quickly. Yes, promotions will help drive new and repeat beverage sales, but so will really great coffee,” she says. “If you have a great sourcing story such as single origin, sustainable or fair trade, tell that story. That type of outreach will resonate with millennials.”

Watch it closely

WhiteWave’s Gira says a great coffee bar program is a work in progress and must be monitored closely.

“There are a variety of factors that affect how an operation manages its coffee program. Those that are known for offering good coffee and/or those that recognize the profitability and overall importance of their coffee program invest money and resources to satisfy the needs of their current customers and work to attract new customers,” he says.

For example, Gira explains, as younger consumers begin drinking coffee, they tend to use more cream than older generations. “Having an optimized coffee bar with the right assortment of flavored creamers is critical as these consumers enter the coffee category.

“It’s critical restaurants frequently evaluate how they’re doing relative to the needs of their current customers, the customers they’d like to attract and their competitive set — they can then work closely with their manufacturer partners to explore new and exciting ways to grow their beverage sales,” Gira says.

Toong says get creative and market coffee like wine, especially to millennials. “Our students want to know the story behind the coffee, the more information we can share, the better — the farms where the beans are grown, the process,” he says. “They also like tasting notes: similar to wine — Sumatran beans are earthy, toasted and south American beans are bright, punchy. Basically describe your coffee in three words.”

Train the team

Employee training is also imperative to a successful coffee bar program as Americans have become accustomed to the coffee culture.

“Don’t do a program like this unless you and your vendor partners are committed to training your team members to ensure every guest gets a great coffee experience,” advises Myrdal Miller.

Webster says it’s likely the number of coffee options can vary greatly from operation to operation depending on what makes sense.

“If the coffee bar is going to be a key element to the overall customer experience, then there should be more options. That said, there are trendy cafes that offer only a few options even though that's the main focus,” she says. “Excellent quality traditional options can be enough if they are well executed. Trendy options will come and go so an operator that focuses on those needs to be ready to make changes quickly.”