Is it just me or does it seem like the topic of coffee is making the news a lot lately? Much of it is dominated by the market share battle between Starbucks and Dunkin Donuts - oh and who can drive down the street or pick up a paper without reading about McDonald's new coffee program. Here's a news flash for you - they are all big, they do huge numbers, and are well run businesses.

But the story of the year is the specialty coffee and tea industry. Unlike aerospace (my old world - everyone has an "old world" don't they?) or auto makers where you have two or three big players and nobody else, specialty coffee has tens of thousands of entrepreneurs just like you who manage to make ends meet working for yourself and serving a fabulous cup of Joe with a smile! SCAA would say there are roughly 30,000 independents in the US market alone.

You wonder how can this be possible that 30,000 independents can exist with the really big players? Well...from my perspective...it comes down to a simple numbers game ..... Let's just say for numbers sake that there are 40,000 locations for those big guys. Then throw in about 25,000 other big players - convenience stores and gas stations that serve coffee inside. That’s 65,000 locations and let’s just guess that they average 500 cups a day at each of those and we are a little over 37 million cups a day. Now that seems like a really big number for those really big guys.

In order to launch my StixToGo business, I needed to conduct research on single use / disposable lids to understand the market potential for my coffee plugs, stir stix and straws. One consultant told me that I should just conduct research on coffee spills - duh that's everyone, so we looked at everyone. The numbers were staggering. In 2004 there were 58 million lids used every day in the US and consumption has been growing at over 10% per year. As I have said many times before, caffeine is the drug of choice in the 13 - 29 year old demographic. Don't believe me? Drive around the perimeter of a college campus and take note of the businesses or take a walk through the campus and see what the students are juggling with their books and backpacks.

So it looks like we are at 70 some million cups a day and the big players have say, half the market. Before you jump to the conclusion that the left over 35 million cups spread across me and 29,999 others is 1166 cups a day, you have to take out the office coffee players and a few others - heck, cut it in half and you still have well over 500 cups a day.

But by now I hope you get the point, there is room for 30,000 independents amongst the giants. If you are not doing 500 cups a day, you too have room for growth :) There is plenty of room for you in the market and this should have been the story of the year!

Make it a great year!

Tom

I spent this weekend at CoffeeFest in Seattle getting to know many of you and learning about your businesses. It dawned on me that our trade shows are a tribute to the entrepreneurial spirit and passionate innovation that burns in the heart of the coffee shop or stand owner. It also occurred to me that we live in a competitive world that can constantly challenge our definition of success.

You've heard about IQ, EQ, but have you spent much time thinking about EIQ? EIQ stands for the Entrepreneurial Integrity Quotient, or the ability to be successful without compromising your values or asking your employees or suppliers to compromise theirs.

We all know it, good business is about keeping good Karma, and good karma is the result of doing the right thing every time, all the time.....and most of the time, it is not easy. Often in the pursuit of keeping commitments, providing passion for the team, "WOWing" the customer, and just staying afloat, we find ourselves standing on that very fine line of EIQ and OOB (out of business). Doing the right thing can fly out the door when you are competing with "the dark side" for the hearts and minds of your customers.

But think about it...how do you measure your own success? Are you really successful if your tactics put all your competitors out of business? Can you be proud to have the best prices if it means your beans come from suppliers whose growers can't make a sustainable living? Is it okay to trash your competitor's reputation if it means their customers will come to your shop? If imitation is the highest form of flattery, is outright copying or stealing someone else's idea ok? Of course not....but it happens every day. By way of example, there was a coffee plug at the show that is a knock off of one of our StixToGo products. Some of you probably even buy them out of California. Its all about competition, not morality. The only actions and behavior we can control are our own. Our focus needs to remain on building our own businesses and always asking ourselves - Are we doing the right thing for everyone concerned?

Good competition innovates on other's ideas and continually improves the product and people while staying in the bounds of legality (aka just doing the right thing...). Bad competition is well, just bad and we all know what that looks like when we see it. The challenge for all of us is to keep our head high and our EIQ in check. In a world of perfect competition, supply and demand would (and to a great extent does) set the prices and determine how many shops are in town, the market would define what products we serve, we would all be environmentally conscious and our customers would all be appreciative, happy, and clean up after themselves! Oh yes, and we would all live happily ever after - might as well throw that in too :)

Its not easy, but amidst all the temptation and a lot of hard work, I'm continually amazed by the overall EIQ, the integrity, kindness, the compassion, the community spirit, and the smart wisdom I encounter in our coffee shop owners and their employees. You amaze and inspire me every day and that's why I'm proud to be in this business. Thank you! Tom

I really like specialty coffee trade shows. Now mind you, you are not likely to hear me say that on the Sunday night after three days on the show floor…but when fully rested and cognizant it is how I truly feel.

Trade shows allow me to get out of my office, break free from the “day-to-day” and most importantly meet customers and potential customers face-to-face. Most of what I hear at these events is positive, some not so much – but all of it is very important. I always return home enthused and reenergized.

We’ll be at Coffee Fest in Seattle next month (November) and then at the Las Vegas Restaurant and Coffee Fest - Washington D.C. shows - both in February ’08. Hopefully you’ll stop by and say hello……

Wow….the last day of summer…..You can tell it's the beginning of fall here in the north when schools reopen, the air gets crisper, leaves begin to change color….and can you believe it….Halloween decorations, costumes and candy have already arrived in the stores…it’s hard to say what is more frightening, spooky costumes or that overwhelming urge to head south to warmer parts of the world!!!

As we “fall forward” I must say that your insights over the last few weeks have been amazing….we’ve learned how to combat slow winter months in summer tourist towns, how to best use the web for marketing, the “WOW…why didn’t I think of that” things you do to keep your regulars coming back….and, honestly…who knew a banana in a jar could be the next anti-pest superhero????

And hey, it’s really all about the relationships….beyond the way you are connecting with each other here at CoffeehouseTalk….one of coolest things that I’ve noticed is how many of you have figured out…in so many different ways…that connecting with and giving back to your community is more than just good karma….it’s good for you, your customers, your community, and usually pretty darn good for business….so my question for the day is….how do YOU connect?

I was a bit rough on the Insulair folks earlier this year as they fought some (relatively minor) quality issues and some (relatively major) supply issues. But I have to give them credit…. The quality complaints (knock on wood) are virtually non-existent and they seem to have ample inventory as we approach what we affectionately call "Hot Cup Season".

They have invested in a new manufacturing plant in South Carolina to complement their existing California facility and one of the benefits of their new ownership by Georgia Pacific is that they can take advantage of GP's network of distribution centers around the US, which makes it faster for distributors to get their product.

We hear talk of a new “stock” design or two on the horizon and look forward to those. One thing that Insulair has historically done well is provide interesting and attractive stock designs. “Encarta” (pictured above) has been a winner from day 1 and folks really seem to like their newest design “Aroma” both for its aesthetics and the fact that it contains about 13% recycled content.

Keep up the good work Insulair!

If you would have told me we would have 50 coffee shops provide features of themselves in the first month, I would have said you were crazy. It just goes to show one more time how little I know. A full web page dedicated to your business! The stories and insights have been enlightening for me. We will organize these by state, province and country soon. We will even add a mapping capability so customers can find you.

For our first month anniversary, we gave away our first Play Station 3 and to those of you who provided features, your StixToGo package is on the way. That sounds kind of like the checks in the mail doesn’t it?

And for the hundreds of you who have joined the site, but not participated in the community talk forums or provided your coffeehouse feature information, there is no time like the present to get on board!

-Tom

Here is a timely issue - I think! Please take a moment to give me your thoughts.

We (at baristaworks.com) are going to be adding a line of the new Biodegradable / PLA (corn based) clear, cold cups shortly. We've had many requests..... We essentially have two options. One - we can purchase from a domestic (USA) supplier however their cost to us (and ultimatley to you) will be higher than the other option which is to import from China / Taiwan.

We were heading down the China / Taiwan path, when all of this news about toy recalls (Mattell, lead paint, etc.) popped up over the last couple of weeks. Lots of other products (probably more than we would ever guess) come from China. Makes me wonder if either operators or their customers would be concerned about their disposables coming from this part of the world.... your thoughts?

My Story

Like Tom’s and so many of yours, my story is one of dreaming to escape corporate life and go out on my own. So here I am after 22 great years, 8 jobs, and 5 cities with International Paper…. now in my 20th month of entrepreneurship (BaristaWorks.com and BrandedCups.com). I love it (most days) and would not go back (most days) for anything.

I look forward to partnering with Tom on this new venture. Our hope and desire is to develop a new coffee oriented community, but to do it from the perspective of an entrepreneur as opposed to an association or trade periodical. My experience revolves around packaging, so look for things from me that center in that area - but the nice thing about a blog is that we are not constrained to talk about just one topic. For today though, I think I’ll stick to my knitting:)

A New "To Go" Cup for Specialty Coffee Operators?

It has been interesting to watch early feedback to the new expanded polystyrene (EPS) cups that Dart® and others have recently introduced. These new products are essentially just a Styrofoam cup with a paper wrap on the outside to allow for nicer graphics. While perfectly acceptable in QSR and C-store environments, the Specialty Coffee segment has historically steered as far away from foam as they could get.

Will the lower cost and better graphics of these new products outweigh the (real or perceived) environmental and taste concerns that most coffee entrepreneurs have had with foam??? Hard to say… but I do know that these new cups have clearly gotten the attention of the paper cup manufacturers. Best case is we’ll see some new innovations from the paper guys…. Worst case is these lower cost offerings will help keep paper prices in check – either way it should be a win for the Independent specialty coffee entrepreneur!

Welcome

I want to welcome you to the first release of CoffeehouseTalk. For the past two years I have immersed myself in the specialty coffee and tea business, and I am amazed by the entrepreneurial spirit that runs through all of you. Although many of you have helped to make my business successful, CoffeehouseTalk is not about StixToGo. Instead it has been created as a resource center to share information, highlight successful coffee houses and hopefully in some small way, to help your business continue to grow.

The Coffeehouse

Over the past decade, the Coffeehouse has become a gathering place for many reasons. The virtual workplace and home offices are fueling a need for adult interaction and a meeting place. Convenient locations and the ambience have also contributed to the growth. Lifestyle changes have allowed Coffeehouses to replace local bars and pubs as a place to meet. Young adults have also chose caffeine as the daily stimulant, witnessed by the enormous growth in coffee consumption on or near college campuses.

In our travels we visit many Coffeehouses and stands. We will feature many of these in our “Coffeehouse” section. If we haven’t found you, please feel free to find us and send your information, with fun photos of your staff, customers and of course, your shop.

We will also cover trends and topics of interest in my blog. Current news articles of interest are available and you can post others on your own. But the most important part of CoffeehouseTalk is the Forum. It is a place for you to communicate with each other. A safe haven to ask questions, provide feedback and share information with each other.

We value your feedback and the opportunity to serve you. CoffeehouseTalk will be informative and just plain fun! And the content belongs to you!