P i s t a c h i o

Published in Foodservice & Hospitality Magazine, January, 2008

A $15 cup of coffee hit a few select cafés in Toronto and Vancouver this spring. The Panamanian Esmerelda brand is apparently so alluring that it sparked a bidding war that set a record — US$21 a pound, nearly 30 times the cost of commercial grade coffee.

How much better could that cup of coffee possibly taste?

A blind taste-test last fall lined up four coffees for scrutiny by four credible palates: an executive chef, a custom coffee-roaster, an independent espresso-bar owner and an importer of green coffee. The clear winner was McDonald’s. The also-rans, in order of descending scores, were Starbucks, Timothy’s and Coke’s new coffee.

What happened?

McDonald’s introduced a new blend last year, a prelude to the company’s redesign, which borrows heavily from the coffee shop model. “Lingering zones” is the name for designated areas in renovated stores that are furnished with comfortable stuffed chairs, fireplaces and flatscreen TVs, quite a departure for the grab ‘n’ go giant.

“Coffee is very big in our ongoing individual quest to define ourselves,” says Susan Abbott, a specialist in branded customer experience. In what Abbott calls “the new language of coffee,” McDonald’s spokesman Louis Payette spells it out, loud and clear: “We’re confident we can give our customers the experience they’re looking for when they visit us,” which appears to be all about comfortable lingering.

For William’s Coffee Pub, the customer experience of lingering was confronted with some ingenuity.

“First of all,” insists Neal Muschett, Vice-President of Marketing “we’re not a coffee shop. Coffee is just part of our name,” which a fair statement given the chain’s solid position in the fast-casual segment. Strong in hot food and service, with 45 stores in southern Ontario, William’s expects to double that figure in three years.

In the meantime, and possibly contrary to Muschett’s passionate clarification of the chain’s name, William’s has introduced a unique approach for dealing with customers who linger for hours over a cup of coffee while locked in a concentrated gaze onto a computer screen.

The company calls it “laptop alley” — bar-style seating with individual electrical outlets for solo customers and their laptops, and free Wi-Fi thrown in for good measure. “This frees up our tables of four,” points out Muschett, but this is only the practical side of a great idea. The other side is that good, old-fashioned dose of giving customers what they want. (Despite the prevalence of hotspots, many of these locations are light on electrical outlets. What an unhappy customer experience it is for the brand-loyal lap-topper to feel forced to look elsewhere for a place to plug in.)

What about that loitering patron who nurses a single cup of coffee all afternoon, enjoying the free Wi-Fi and the homey comforts of the chain’s warm décor? “It’s not an issue,” assures Muschett. “We don’t care, because that customer is going to come back again and again, and that’s where our business is.”

Not everyone is jumping blindly onto the free Wi-Fi bandwagon; neither heavyweights Starbucks nor Second Cup are willing to go there.

“Free Wi-Fi isn’t free,” says Karen Gold, Second Cup’s Vice-President of Marketing. “Someone is paying for it, and we don’t want it to be the franchisees.”  Gold explains that there are many complex issues holding them back, such as fees variable with traffic and service fees associated with transmission. “But we’re reviewing all the options,” Gold assures. She is also quick to add that Second Cup has changed its hotspot fees and now charges per minute rather than by the hour.

Free Wi-Fi was a gimme for Country Style, the Cinderella rescue operation of the year. The rebranding was a long time in the making, and some have said long overdue. “We had a sense that the chain was old and tired, and that the issues hadn’t been faced,” confesses President Rick Martens, “and on a corporate level, you know what you have to do, but you want to hear it from your customers first.”

The customer research was brutal, and Martens courageously calls it like he heard it.

The bad news: “People didn’t like our brand,” he begins. “They thought it was old, not contemporary, not warm or welcoming. Fewer and fewer identified Country Style as a place they wanted to go. We got ‘sterile’ and ‘like a cafeteria’ a lot. We got a lot of  ‘You’re yesterday and not with it.’ And ‘not with it’ became very important to us.”

The good news: “The customers love the product, and they’re fiercely loyal,” a fact Martens delivers with pride.  For the company, this translated into an unwavering decision to maintain their value proposition. “It was very important not raise our prices,” stresses Martens, and he is good on his word.

For Second Cup, a recent refreshing of product and policy shines some light on the franchisee’s need to distinguish herself among others sharing the brand.

“We like to get the owners out of the corporate box.” says Gold, referring to how the company encourages franchisees to come out from behind the counter to mingle and form relationships with customers; to use a community-style bulletin board to develop the shop as a neighbourhood hub; to hang personal and family photos in the shops, with frames provided by the company; to sponsor neighbourhood sports teams under their own names, alongside the Second Cup brand.

“And we do a lot of local marketing,” continues Gold, such as sourcing local bakers to provide sweets for the pastry case, “using their logos and adding information about their business to the signage.”

Further to the language of coffee, with McDonald’s “lingering zone” and William’s “lap-top alley,” Second Cup has “hang value,” the quality of the brand’s ambience for being a great place to hang.

“We’ve got great hang value,” declares Gold, laughing at the irony that great hang value doesn’t pay. “We originally thought that the people who were going to hang around a while would spend more,” reports Gold,  “but instead, people who take out spend considerably more.”

No wonder the expediency of quick-pay is the next major milestone. In September, Tim Horton’s brought in MasterCard to quicken its pay options, and a month later came the Tim Card, a preloaded swipe to keep the line moving fast. The technology is widely used, at various stages of rollout, depending on the company.

The final frontier remains the computer chip, a subject Second Cup’s Gold is very excited about. “I have a great idea for this,” she says, “a travel mug with an embedded chip. You fill it up, swipe and go. No cups, no paper, no cards, no plastic.”  Watch for it.

In the meantime, the next hot point in the coffee-shop customer experience is “the meeting room.” William’s deliberately installed a meeting room in its new Bolton, Ont., store. Second Cup has a busy Toronto location that has a large table at one end of its shop. “The store gets these calls all the time,” reports Gold, “coming from the offices upstairs, something like, “Is the big table free? I’d like to reserve it. I’m coming down,  and I’m bringing the team.’”