Why Coffee Delivery Is the Future of On-Demand Ordering

January 25, 2016

by Gloria Dawson @ Eater
Jan 14, 2016, 12:00p
http://www.eater.com/2016/1/14/10758072/starbucks-delivery-dunkin-donuts-office

It’s never been easier for consumers to get things delivered. So why not coffee?

Imagine a piping hot coffee delivered to your office or home at the proverbial “click of a button.” For consumers, it’s perfect. For the coffee companies attempting to provide these services, it’s a bit more complicated. But two of the major chains, Starbucks and Dunkin’ Donuts, are ready to give it a try.

2015 was a big year for Starbucks, which added several services designed to be quick and convenient. In September, the company rolled out nationwide availability of Mobile Order & Pay through its apps, which allows customers to order ahead on the app and pick up in-store without waiting. In October, Starbucks announced a pilot project: It started bringing coffee and other items to employees of the Empire State Building through an in-house service, Starbucks Green Apron Delivery, which promised items “delivered by Starbucks baristas right to your office.” And in December, Starbucks officially debuted its previously announced partnership with start-up Postmates, allowing customers in Seattle to order delivery using the Starbucks app.

It’s not just Starbucks getting into the delivery game. In November, Dunkin’ Donuts launched two programs designed to “make it even easier and more convenient for people to run on Dunkin’ from morning to night,” announced a company press release. On-the-go ordering — which works with the company’s app in a similar style to Starbucks Mobile Order & Pay — first launched in Portland, Maine. Dunkin’ Delivery, meanwhile, first launched in Dallas as a partnership with the on-demand delivery start-up DoorDash, and both services have expanded into other cities.

Although fast-food and coffee chains have great convenience, the expectation by consumers to get food delivered is increasing.

But why coffee delivery? “Both ordering methods are simply new ways to… meet customers where they are in their day,” says Starbucks spokesperson Maggie Jantzen. Apparently, the most-asked-for service on the My Starbucks Idea blog was, “When will Starbucks just bring me coffee?”

According to Darren Tristano, the president of food industry research firm Technomic, “with the rise of on-demand delivery services like Postmates and others, many operators have researched the opportunity to outsource or build delivery services,” and that includes brands already known for convenience. “Although fast-food and coffee chains have great convenience — including in-store and drive-through options — the expectation by consumers to get restaurant food delivered is increasing,” he says, “and broadening across new segments.”

But anyone who has waited longer than expected for a food delivery, received a dish that had cooled in transit, or not received what was ordered, understands that delivery logistics are complicated. Unlike Amazon shipments, there’s only a brief window of time that most food items can be delivered before getting cold or spoiling, and some might say that the window is even shorter for coffee.

“The flavor and aroma characteristics of hot, brewed coffee drinks change quite rapidly as the temperature decreases,” says Nick Brown, editor of Roast Magazine‘s Daily Coffee News. “And while everyone drinks their beverage at a different pace, the most loyal of customers may have some sensory expectations tied to their favorite drinks. Time and temperature seem to be the two biggest obstacles here in repeating the experiences consumers have come to expect within the brick-and-mortar retail locations.”

“Given the number of locations that each brand has, it should be relatively easy to develop delivery options,” Tristano says of the logistics. “Challenges facing both operators will include peak time service, logistics in-house, and managing the delivery in a way that doesn’t impact the on-premise operation or the brand quality as products leave the store.”

Starbucks’s rollout of Green Apron delivery seems to take these concerns into consideration. The company used existing infrastructure for its Empire State Building delivery: The building already had a Starbucks café, and the company uses a separate kitchen for the Green Apron orders. There are more than 12,000 employees in the building, but they are all just an elevator ride away. Customers place orders on a fairly simple website. Orders arrive in approximately 30 minutes, according to the company. But Ashley Fleishman, a lawyer who works in the Empire State Building, reported coffee delivered in 10 minutes. And yes, “the coffee is still hot,” she says.

Starbucks’s “Green Apron Delivery” service is designed for deskside deliveries within large high-rise buildings.

Green Apron Delivery partners are discouraged from accepting cash tips, says a company rep, but the company is working on adding digital tip options to the website. And although Starbucks did not share plans for expanding Green Apron, Jantzen describes the service as one “for customers within a designated high-rise building.”

The company has, at least, one new customer. Fleishman used to get her caffeine fix from her office’s Keurig machine. “I am not a religious coffee drinker,” she says. “So with Starbucks, I probably drink more than I previously did before delivery was offered.”

While the Green Apron delivery seems to focus on office delivery, “customers aren’t just in office buildings,” according to a Starbucks press release announcing the Postmates partnership in Seattle. “They’re at soccer games with their kids, at home with family, or gathering at the park with friends.” To get those skinny lattes to soccer games, Starbucks teamed with Postmates, a delivery company that has a love-hate relationship with the restaurant industry. (Postmates often offers delivery from restaurants without their consent.) Despite the complicated relationship with restaurants, Starbucks considers Postmates “an industry leader in the on-demand delivery space,” writes Jantzen. “They have the technology and expertise to scale this program with Starbucks.”

It’s safe to say Postmates is committed to the relationship: According to the company, they’ve designed a new carrier “so that we could ensure that the coffee would arrive the way it left the store.” Customers order through the Starbucks app, which has been modified to use Postmates’ ordering and delivery technology, the first and only food company app to do so. Users in Seattle and elsewhere can still order through Postmates directly, but having delivery built into Starbucks app allows customers to customize orders, the company said in a press release. For Postmates deliveries, Starbucks charges a $5.99 delivery fee.

Jantzen also says that Starbucks has “no additional plans to share in regards to other food delivery companies.” But it would not be uncommon for large chains to test our various food delivery options. For example, 7-Eleven is working with both Postmates and DoorDash in different cities. In terms of logistics, Slurpees have a lot in common with coffee — a delivery that’s just a few minutes late can be problematic.

Dunkin’ Delivery customers can order only through the DoorDash app — DoorDash has experience working with chains including Taco Bell and Kentucky Fried Chicken. The partnership probably made getting the program of the ground easier for Dunkin’ Donuts, but will most likely limit the information they can gather from their customers. For the partnership, DoorDash began deliveries at 7 a.m. or 8 a.m., a few hours earlier than the typical 10 a.m. start time, in order to serve breakfast. Breakfast and food in general is a growing category for many fast food companies, according to Brown.

“This strikes me as a relatively low-risk channel to explore, especially if the technology bears out.”

“While breakfast has been a strong suit, we’ve seen roughly one-third of coffee orders come after lunch,” says Prahar Shah, the head of business development at DoorDash. Office deliveries are popular. “We see three to four folks on a team doing the ‘coffee run,’ but doing it with DoorDash.” Dunkin’ Donuts’ Box ‘O Joe, which holds 10 cups of coffee in a box, are popular with the late-afternoon office crowd, says Shah.

This partnership has expanded from Dallas to Washington DC, Chicago, Atlanta, and Los Angeles/Orange County. And Dunkin’ Donuts is looking to expand delivery, with or without DoorDash. “As we continue to test Dunkin’ Delivery, we will look to explore options for other partnerships and integrations with the DD Mobile App,” writes Sherrill Kaplan, who works on digital marketing and innovation at Dunkin’ Brands.

“Both companies have made big strides in their app development and mobile ordering platforms, and it makes perfect sense that they would try to leverage that loyalty through a new channel,” such as delivery, writes Brown, the Roast editor. “This strikes me as a relatively low-risk channel to explore, especially if the technology bears out.”


Snacking and Healthier Options are on the Rise

October 30, 2015

pictureSnacking is a growing trend and consumers are snacking more frequently. About half of today’s consumers (51 percent) say they eat snacks at least twice a day and 31 percent say they’re snacking more frequently than they were two years ago.

According to Technomic, Americans also are broadening their definition of a snack to encompass a wider range of foods and beverages.

Smoothies are they a snack or a meal? According to Vitamix and ORC International, 59 percent is snack, 25 percent is part of a meal and 18 percent meal.

“Snacking occasions represent a growth channel for restaurant operators. The retail market is aggressively promoting snacks, but there’s plenty of room for restaurants to expand their snack programs and grab share. By providing more innovative, healthy and easily portable snacks, and boosting variety, restaurants can position themselves to increase incremental traffic and sales –particularly among a younger customer base.” Darren Tristano, executive vice president of Technomic.

In an article by WholeFoods Magazine called “Healthy Snacking on the Rise in the US” this article reports that more Americans are snacking more than ever before – but are also make smarter snacking choices. In a recent survey taken, 33% of the survey population is snacking on healthier foods than they were last year. This number has steadily risen with time, and is something that only stands to increase with nearly a third of all parents surveyed mentioning that they are serving healthier snacks to their children.

What a great opportunity for any restaurant, café, juice or smoothie bar to take advantage of this growing trend. Now more than ever it is important to offer customers what they want and that is healthier options.

The healthy trend is also dominating menus. Gone are the days of serving only indulgent foods or offering calorie laden menu items. The most prominent industry buzzword over that last decade is healthy which appears in various forms on today’s menus. This change has been inspired by the growing public awareness of healthy attributes in food and consumers are leaning on restaurants to go beyond adding a side salad to create a healthy meal.


How Jonathan Smiga Crafted Barnie Coffee & Tea’s Turnaround

March 27, 2015

Anjali Fluker
http://upstart.bizjournals.com/entrepreneurs/hot-shots/2015/03/21/how-jonathan-smiga-crafted-barnie-coffee-teas.html?page=allbarnies-centerpiece15-304xx3654-2448-42-0
© 2015 American City Business Journals, Inc. All rights reserved.

J onathan Smiga wasn’t sure quite what he was getting into when he took over the helm as president and CEO of the then-struggling Barnie’s Coffee & Tea Co. in 2010.

The Winter Park, Fla.-based firm’s board had just fired founder Barnie “Phil” Jones Jr. after falling from 120 cafes in 15 states during the early 2000s to about 50. Sales also had declined to $5 million-$6 million from a peak of $67.3 million in 2005.

But rather than trying to compete with coffee giant Starbucks by opening new cafes in every trendy city, Smiga instead pared down the store count to just two — the original store on Park Avenue in Winter Park and one in downtown Orlando’s CityArts Factory — and put a heavier focus on branding and expanding its high-quality products that target socially and environmentally responsible consumers. The idea was to put the new Barnie’s CoffeeKitchen into the movement known as the third wave of coffee, where coffee is looked at as an artisanal culinary specialty from production to brewed cup, rather than a commodity.

The result: The company’s products now are available in grocery stores, convenience stores and specialty stores in 22 states. And 2014 was a breakout year for the new-and-improved Barnie’s, where revenue doubled and earnings were up by $2 million year-over-year.

Today, Barnie’s is in its 35th year and expects to see sales back up to about $20 million this year, up 50-80 percent from 2014.

“We’re breaking out from being that regional coffee shop in town,” Smiga told Orlando Business Journal in an exclusive interview. “We bring the nimbleness of a third wave of coffee company — from production to our talent to our intellectual property — married with a mature company which allows for us to take our business to a national scale.”

No pain, no gain

The first year Smiga was top executive at Barnie’s wasn’t easy. Stores had to shutter, employees were let go and revenue dropped by one-third.

And things appeared bleak when stores started to close because of what had happened in Barnie’s history: The company in 2006 sold off 56 shops mostly in malls, cutting sales nearly in half.

But Smiga said the Barnie’s team hunkered down and focused on building its intellectual property, brand and figuring out the best way to shed its former reputation. Rather than being known as the local Starbucks competitor, the firm wanted a more global reach by making its products the first thing people think of when they hear Barnie’s.

“We stayed in that zone a couple of years, but we were not dormant,” Smiga said. “We were figuring out the puzzle pieces.”

It all paid off, as last year the firm achieved positive cash flow without venture funding.

Much of the growth came from signing deals to sell its packaged products in large retail chains. And last year, Barnie’s relaunched its website to capitalize on the growing e-commerce industry with online sales, which today represents about 10 percent of the company’s sales. It has been known to draw buyers fro m as far away as Germany.

Java culture

Along with bringing an analytical look at the coffee business, Smiga also brought a change to the culture at Barnie’s CoffeeKitchen, according to Senior Vice President of Sales and Marketing Sonya Hardy, who has worked for the company for more than 20 years.

Barnie’s originated as a company that celebrated the purity of international coffees, but got away from that as it ventured into growing its store count.

“Smiga really got us to refocus on the coffee and getting us into the third wave of coffee movement,” Hardy said. “Then we were able to work that into the guest experience.”

Reining in growth

Now that the company is back on a growth trajectory, the difficult part is not falling into that same trap of trying to grow by opening a slew of new stores, Smiga said.

Though Barnie’s is looking at potential new stores in strategic areas in the Southeast, Midwest and Texas, Smiga said the focus still will be on Barnie’s coffee and tea products. The firm will continue to create new Barnie’s-branded packaged products, including a new cold-brewed bottled drink expected to hit the market later this year.

“We’re next going to focus internally on strategy in the small business sense,” he said. “When you’re underwater, you only want to get to the surface. You’re focused on surviving. But once you get to the surface, you can start making executive decisions.”

However, there’s still room to add stores, according to Darren Tristano, executive vice president of food industry research firm Technomic Inc.

Making a mark in the highly competitive coffee house industry won’t be easy, but it is possible, he said. About 27,000 coffee houses in the U.S. generated $23.5 billion in sales last year, mostly dominated by mega-chain Starbucks and then Dunkin’ Donuts, Technomic reported. “Barnie’s focus has been more on retail, and they’ve been doing well with the restaurants or stores they currently have,” Tristano said. “They should have opportunities on the retail side as a smaller brand to continue to expand as profitability rises.”

Background: Grew up in the food business in Sarasota and Palm Beach; was co-director of education at the Culinary Institute of America in Hyde Park, N.Y.; recruited by Darden Restaurants Inc. to oversee a turnaround for Olive Garden in the mid-1990s; was general manager of a Robert Mondavi Winery-oriented attraction at the 55-acre Disney’s California Adventure theme park in Disneyland Resort

Education: MBA, New York University; master’s in hotel administration, Cornell University

Projected 2015 revenue: $20 million

Employees: 60

Contact: barniescoffeekitchen.com

Barnie’s CoffeeKitchen cafes are no longer the only place to get a cup of your favorite java or tea. Here’s where else you can find your favorite flavors and brews:

On the web: Order any of Barnie’s products on the company’s website at http://bizj.us/1bp5gd or search for coffee and related products on Amazon.com.

In stores: Barnie’s can be found on the shelves in supermarkets and retail locations, including Publix Super Markets, Winn-Dixie, Sweetbay, H-E-B Grocery, Food Lion, Hannaford Supermarkets and Harveys.

In cafes: Two full-service cafes still exist, 118 S. Park Ave. in Winter Park and 29 S. Orange Ave. in downtown Orlando’s CityArts Factory.

Dr. Phillips Center for the Performing Arts: Two Barnie’s coffee bars can be found in downtown Orlando’s arts center.

New products

Some original products created by Barnie’s CoffeeKitchen:

CupUp: A single-cup brewing machine compatible capsule that holds 30 percent more coffee than other leading brands. Features a patent-pending channel design to create a particular extraction of flavor and aroma. Available in several of Barnie’s most popular flavors.

Brewsticks: Single-serve liquid instant coffee that comes in portable packets. Features 100 percent cold-brewed Arabica coffee soluble in hot, iced or bottled water.

Publix Premium Ice Cream: Publix-branded ice cream in Barnie’s CoffeeKitchen flavors, including Barnie’s Coffee and Santa’s White Christmas

Publix Premium Espresso Chip Frozen Yogurt: Barnie’s Santa’s White Christmas coffee-flavored frozen yogurt with chocolate espresso chips

Publix Premium Indulgent Yogurt: Barnie’s Santa’s White Christmas coffee-flavored yogurt with mocha chips

Sources: Barnie’s CoffeeKitchen, Publix Super Markets Inc.

By the numbers

Stats on Barnie’s CoffeeKitchen:

120: Total U.S. stores at its peak

60: Employees

22: States where you can buy its products in convenience, grocery and specialty stores

4: Barnie’s ice cream flavors you can get at Publix supermarkets

2: Remaining stores under the firm’s new business strategy

Source: Barnie’s CoffeeKitchen


Starting From Scratch With Better Coffee

February 25, 2015

Joan Verdon

https://global.factiva.com/du/article.aspx/?accessionno=WPATHN0020150220eb2k0005u&fcpil=en&napc=T&sa_from=&cat=a

Copyright 2015 Herald News (Woodland Park, NJ). Distributed by NewsBank, inc.

The food-services company Mascott has fed its growth by introducing other people’s restaurant and food franchise ideas to North Jersey. Now it wants to build a beverage and food concept from the ground up.

Hillside-based Mascott, which brought the first Smashburger and Noodles & Co. restaurants to Bergen and Passaic counties, is launching a coffee-shop business called Ground Connection that it hopes will become a home-grown New Jersey hit. The company opened the first Ground Connection last week at The Shops at Riverside in Hackensack and plans to open three more locations in Livingston and Jersey City in the spring and summer.

Just as Smashburger sizzled as the “better burger” trend exploded, Mascott Chief Executive Officer Scott Gillman is betting the “better coffee” movement will create demand for Ground Connection. The shops serve small-batch roasts, use specially sourced milk and flavorings, and buy its sandwich breads, salads and other foods from local suppliers.

Gillman said he is trying to bring the coffee connoisseur experience found at some of the hot big-city artisanal coffee chains such as Blue Bottle Coffee, Stumptown Coffee Roasters and Intelligentsia Coffee to the suburbs, with prices and an atmosphere friendlier to suburban shoppers.

“There’s a huge movement into specialty coffee,” Gillman said. “It’s a better quality coffee. Often it’s handpicked. It’s relationship coffee,” he said, with the roasters developing a relationship with small farms.

Rather than trying to become a franchisee for an existing artisanal coffee brand, just as he did with burgers and Smashburger, this time Gillman decided to create his own response to a trend.

“I wanted to do what I thought would sell the best, and also what would sell the best in the suburbs,” he said. Brands like Blue Bottle, while it has millennials lining up and willing to wait for single-brewed cups, probably would be too expensive and too slow-paced to succeed with suburban mall shoppers. The Ground Connection’s prices are comparable to Starbucks’, at $1.75 for an 8-ounce cup and $2.75 for a 16-ounce, but are 50 cents to 75 cents lower than other specialty coffee brands.

Gillman and Mascott are entering the coffee field at a time when the competition is heating up, according to research firm IBISWorld, which noted in a report in December that the two biggest coffee chains, Starbucks and Dunkin’ Donuts, plan to open hundreds of stores over the next five years.

While the artisanal “better” coffee chains are growing their sales by more than 20 percent a year, big players such as Starbucks are hoping to cut into those sales by introducing their own better brands. Starbucks recently rolled out the Starbucks Reserve brand in some 500 of its more than 20,000 stores worldwide, and is selling the small-batch roasts through the mail to subscribers.

Gillman has a proven track record in the food-service industry and a reputation as one of the smartest franchise operators in New Jersey. His company owns an upscale restaurant in Jersey City, Markers, and has operated dozens of franchise restaurants over the past two decades, ranging from Popeye’s Chicken and Biscuits, Cinnabon, and Seattle’s Best Coffee, to more recently Smashburger and Noodles & Co.

Mascott opened the first Smashburger in New Jersey in 2010 in Glen Ridge and built the franchise into 14 locations, before selling them back to the Smashburger Corp., which wanted the high-performing stores in its corporate portfolio.

With the Ground Connection, “I wanted to do something that took everything I learned over 25 years,” and put his own stamp on a concept, Gillman said. He hired Casey Killo, a 21-year-old who already had a half-dozen years of barista experience, to train his baristas. Steve Parker, the corporate chef for Mascott, developed a breakfast and lunch menu that included muffins and pastries baked in a separate kitchen elsewhere in the mall, as well as soups, flatbread pizzas, sandwiches served heated, and salads.

The restaurant serves coffee from Toby’s Estate, a Brooklyn small-batch roaster. The lattes and cappuccinos use milk delivered fresh from Battenkill Valley Creamery in upstate New York, because it is richer than commercially available milk. Central Bakery in Hackensack supplies the sandwich breads, Gillman said. He estimated his start-up costs to open the Riverside location at $500,000.

Curtis Nassau, of Ripco Real Estate in Lyndhurst, which brokered the Riverside lease for Mascott, said Ripco “sees terrific growth potential” for the Ground Connection. Coffee, he said, “is a well-established, yet still expanding category in New Jersey retail.”

The Ground Connection was drawing a healthy lunch crowd on Thursday, and Gillman said the first week’s sales exceeded his expectations.

But success at Riverside could increase his risk from Starbucks, said Darren Tristano, executive vice president of food-industry research firm Technomics. “It isn’t just build them where Starbucks isn’t,” Tristano said. “Once you’ve built it, that kind of gives Starbucks a reason to build one there,” he said. “You’ve proven that the demand is there, and all they would do is come in and take your business away.”

But, Tristano said, there are customers looking for coffee shops that have more of an independent feel than Starbucks. “Although Starbucks fans are very loyal, there’s some really good opportunity to even go beyond that,” he said.

Grounds for expansion; * $30.2 billion – annual U.S. coffee and snack-shop revenue, 2014; * $1.8 billion – profit, 2014; * 2.7 percent – annual growth rate, 2009-14; * 3.8 percent – projected annual growth rate, 2014-19; * 42.4 percent – market share of dominant player Starbucks; * 25.5 percent – market share of second-largest competitor, Dunkin’ Donuts; Source: IBISWorld Coffee & Snack Shops in the U.S., December 2014

 


February 18, 2015

barnies-centerpiece15-304xx3654-2448-42-0Anjali Fluker
http://www.bizjournals.com/orlando/print-edition/2015/02/13/coffee-culture-how-jonathan-smiga-s-company-plans.html
© 2015 American City Business Journals, Inc. All rights reserved.

Jonathan Smiga wasn’t sure quite what he was getting into when he took over the helm as president and CEO of the then-struggling Barnie’s Coffee & Tea Co. in 2010.

The Winter Park-based firm’s board had just fired founder Barnie “Phil” Jones Jr. after falling from 120 cafes in 15 states during the early 2000s to about 50. Sales also had declined to $5 million-$6 million from a peak of $67.3 million in 2005.

But rather than trying to compete with coffee giant Starbucks by opening new cafes in every trendy city, Smiga instead pared down the store count to just two — the original store on Park Avenue in Winter Park and one in downtown Orlando’s CityArts Factory — and put a heavier focus on branding and expanding its high-quality products that target socially and environmentally responsible consumers. The idea was to put the new Barnie’s CoffeeKitchen into the movement known as the third wave of coffee, where coffee is looked at as an artisanal culinary specialty from production to brewed cup, rather than a commodity.

The result: The company’s products now are available in grocery stores, convenience stores and specialty stores in 22 states. And 2014 was a breakout year for the new-and-improved Barnie’s, where revenue doubled and earnings were up by $2 million year-over-year.

Today, Barnie’s is in its 35th year and expects to see sales back up to about $20 million this year, up 50-80 percent from 2014.

“We’re breaking out from being that regional coffee shop in town,” Smiga told Orlando Business Journal in an exclusive interview. “We bring the nimbleness of a third wave of coffee company — from production to our talent to our intellectual property — married with a mature company which allows for us to take our business to a national scale.”

No pain, no gain

The first year Smiga was top executive at Barnie’s wasn’t easy. Stores had to shutter, employees were let go and revenue dropped by one-third.

And things appeared bleak when stores started to close because of what had happened in Barnie’s history: The company in 2006 sold off 56 shops mostly in malls, cutting sales nearly in half.

But Smiga said the Barnie’s team hunkered down and focused on building its intellectual property, brand and figuring out the best way to shed its former reputation. Rather than being known as the local Starbucks competitor, the firm wanted a more global reach by making its products the first thing people think of when they hear Barnie’s.

“We stayed in that zone a couple of years, but we were not dormant,” Smiga said. “We were figuring out the puzzle pieces.”

It all paid off, as last year the firm achieved positive cash flow without venture funding.

Much of the growth came from signing deals to sell its packaged products in large retail chains. And last year, Barnie’s relaunched its website to capitalize on the growing e-commerce industry with online sales, which today represents about 10 percent of the company’s sales. It has been known to draw buyers fro m as far away as Germany.

Java culture

Along with bringing an analytical look at the coffee business, Smiga also brought a change to the culture at Barnie’s CoffeeKitchen, according to Senior Vice President of Sales and Marketing Sonya Hardy, who has worked for the company for more than 20 years.

Barnie’s originated as a company that celebrated the purity of international coffees, but got away from that as it ventured into growing its store count.

“Smiga really got us to refocus on the coffee and getting us into the third wave of coffee movement,” Hardy said. “Then we were able to work that into the guest experience.”

Reining in growth

Now that the company is back on a growth trajectory, the difficult part is not falling into that same trap of trying to grow by opening a slew of new stores, Smiga said.

Though Barnie’s is looking at potential new stores in strategic areas in the Southeast, Midwest and Texas, Smiga said the focus still will be on Barnie’s coffee and tea products. The firm will continue to create new Barnie’s-branded packaged products, including a new cold-brewed bottled drink expected to hit the market later this year.

“We’re next going to focus internally on strategy in the small business sense,” he said. “When you’re underwater, you only want to get to the surface. You’re focused on surviving. But once you get to the surface, you can start making executive decisions.”

However, there’s still room to add stores, according to Darren Tristano, executive vice president of food industry research firm Technomic Inc.

Making a mark in the highly competitive coffee house industry won’t be easy, but it is possible, he said. About 27,000 coffee houses in the U.S. generated $23.5 billion in sales last year, mostly dominated by mega-chain Starbucks and then Dunkin’ Donuts, Technomic reported. “Barnie’s focus has been more on retail, and they’ve been doing well with the restaurants or stores they currently have,” Tristano said. “They should have opportunities on the retail side as a smaller brand to continue to expand as profitability rises.”

Jonathan Smiga

Title: president and CEO, Barnie’s CoffeeKitchen

Age: 57

Background: Grew up in the food business in Sarasota and Palm Beach; was co-director of education at the Culinary Institute of America in Hyde Park, N.Y.; recruited by Darden Restaurants Inc. to oversee a turnaround for Olive Garden in the mid-1990s; was general manager of a Robert Mondavi Winery-oriented attraction at the 55-acre Disney’s California Adventure theme park in Disneyland Resort

Education: MBA, New York University; master’s in hotel administration, Cornell University

Projected 2015 revenue: $20 million

Employees: 60

Contact: barniescoffeekitchen.com

Barnie’s CoffeeKitchen cafes are no longer the only place to get a cup of your favorite java or tea. Here’s where else you can find your favorite flavors and brews:

On the web: Order any of Barnie’s products on the company’s website at http://bizj.us/1bp5gd or search for coffee and related products on Amazon.com.

In stores: Barnie’s can be found on the shelves in supermarkets and retail locations, including Publix Super Markets, Winn-Dixie, Sweetbay, H-E-B Grocery, Food Lion, Hannaford Supermarkets and Harveys.

In cafes: Two full-service cafes still exist, 118 S. Park Ave. in Winter Park and 29 S. Orange Ave. in downtown Orlando’s CityArts Factory.

Dr. Phillips Center for the Performing Arts: Two Barnie’s coffee bars can be found in downtown Orlando’s arts center.

New products

Some original products created by Barnie’s CoffeeKitchen:

CupUp: A single-cup brewing machine compatible capsule that holds 30 percent more coffee than other leading brands. Features a patent-pending channel design to create a particular extraction of flavor and aroma. Available in several of Barnie’s most popular flavors.

Brewsticks: Single-serve liquid instant coffee that comes in portable packets. Features 100 percent cold-brewed Arabica coffee soluble in hot, iced or bottled water.

Publix Premium Ice Cream: Publix-branded ice cream in Barnie’s CoffeeKitchen flavors, including Barnie’s Coffee and Santa’s White Christmas

Publix Premium Espresso Chip Frozen Yogurt: Barnie’s Santa’s White Christmas coffee-flavored frozen yogurt with chocolate espresso chips

Publix Premium Indulgent Yogurt: Barnie’s Santa’s White Christmas coffee-flavored yogurt with mocha chips

Sources: Barnie’s CoffeeKitchen, Publix Super Markets Inc.

By the numbers

Stats on Barnie’s CoffeeKitchen:

120: Total U.S. stores at its peak

60: Employees

22: States where you can buy its products in convenience, grocery and specialty stores

4: Barnie’s ice cream flavors you can get at Publix supermarkets

2: Remaining stores under the firm’s new business strategy


Starbucks Sells 37 Million Gifts Cards During the Holidays

January 13, 2015

pictureStarbucks Corp. (SBUX) sold about 16 percent more gift cards in the U.S. during the 2014 holiday season as shoppers increasingly defaulted to the fail-safe option of treating their loved ones to lattes and Frappuccinos.

About 37 million gift cards were sold during the holiday season this year, up from about 32 million last year, the Seattle-based company said in an e-mail. More than $1.1 billion was loaded onto Starbucks gift cards between Nov. 3 and Dec. 25 in the U.S. and Canada, where a combined 40 million cards were sold, Starbucks said.

The world’s largest coffee-shop chain, with almost 12,000 cafes in the U.S., is an easy choice for consumers seeking the convenience of gift cards, said Darren Tristano, executive vice president at Chicago-based research firm Technomic Inc. Its stores are everywhere, and many customers visit almost daily.

“It becomes a safe bet,” he said. “We don’t want to give gift cards to people that we’re not sure they’re going to use.”

In 2013, Starbucks customers across the globe loaded $1.4 billion onto gift cards, including $1.3 billion in the U.S. and Canada, between October and December. Starbucks hasn’t yet released numbers for the corresponding period in 2014.

Starbucks said almost 2.5 million gift cards were activated on Christmas Eve this year, up from nearly 2 million sold that day last year. More than $20 billion has been loaded onto Starbucks gift cards since the program originated 13 years ago, the company said in a press release before Christmas.

The gift-card program reached new heights this year when the coffee chain sold a $200 Starbucks Card keychain that’s made with sterling silver and comes loaded with $50. The item sold out online and was available only in limited quantities at certain stores nationwide. Starbucks also offers monogrammed cards for $5.

Gift cards increase the amount of money customers spend when they’re in a Starbucks store, and the company should see a boost in sales in the first part of the year as coffee drinkers start to redeem the cards, Tristano said.

“It’s a significant part of what they do,” he said.


A Big Production

December 12, 2014

Legacy chains employ large-scale marketing stunts to generate long-term buzz.tim-hortons_2

This summer, Canadian coffee chain Tim Hortons made quite the splash: The brand covered one of its Québec locations in blackout materials to promote its new dark roast coffee. Equipped with night-vision goggles, employees handed guests samples of the brew, and the action was all captured in two-minute videos, later posted on YouTube to the tune of 2.6 million–plus views.

Tim Hortons’ head marketer, Peter Nowlan, found the experience a big success for the chain. “The dark roast is Tim Hortons’ first new blend in the company’s 50-year history, and we wanted to put it to the ultimate test: allowing guests to try it in the dark, limiting their sense of sight, and enhancing their senses of taste and smell,” he says.

Large-scale marketing stunts like these are few and far between, but when a quick-service brand does employ them, consumers take note.

“Many brands, especially older legacy brands, have to work harder to stay relevant to a younger generation of less loyal customers constantly looking for what’s cool and what’s next,” says Darren Tristano, executive vice president at Technomic. Whatever the expense to companies may be, the resulting public-relations blitz usually pays dividends, he adds.

Advertisers today are focusing heavily on social media and buzz marketing, so anything a brand does locally on a grand scale will likely be shared and tweeted to people far and wide, Tristano says. “This reminds consumers about brands and their role within the restaurant industry,” he says.