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REGIONAL UPDATE Drinks for Non-Coffee Drinkers ...... because not everyone is in the mood for coffee at the coffeehouse.by Bridget Falbo In neighborhood locations and in coffeehouses that serve lunches, the non-coffee drink selection, more often than not, consists of bottled fruit juices and soft drinks. From fresh-squeezed orange juice to locally produced root beer, the non-coffee beverage menus vary widely. Choices about what to carry are often determined by what a favorite vendor or distributor offers, what the competition doesn't sell, and what customers request. It seems as though it is useful for retailers to know what nearby competitors offer, whether it is a coffeehouse or a grocery store next door. Most operators interviewed say they don't offer drinks offered by the local grocery or drug store because those stores can typically sell their bottled drinks at lower prices because of volume discounts. This has led some coffee retailers to offer, instead, fresh-squeezed orange juice and lemonade, or more unique drinks like ginger beer or organic fruit beverages. Although many retailers interviewed say they want to offer such unique drinks, they say it can be difficult to find a distributor or that it doesn't make sense to bring in yet another vendor for just one specialty item to add to the books. Since most retailers focus all their marketing efforts on selling coffee and espresso drinks, and non-coffee drinks are not the driving force behind the business, the marketing of non-coffee drinks is generally left to displays of the product. Cooler and counter displays seem to be effective, timesaving techniques, allowing the customers to know what's available without having to ask the barista. Non-coffee drinks seem to be priced no different than other food and coffee items. Most retailers interviewed say their juices and smoothies are priced based on a 30 percent to 50 percent cost of goods. In developing fruit smoothies or other drinks with numerous ingredients, retailers say that checking out the competition helped in setting a fair price. From conversations with retailers, one of the criteria in selecting beverages is to keep it within the character of the coffeehouse. A coffeehouse in Toronto with an Italian espresso bar theme emphasizes Italian soda. A roaster/retailer in New York who roasts beans in the coffeehouse serves fresh-squeezed orange juice. A retailer in South Dakota who sells more than 20 different specialty desserts developed his own specialty iced tea. Specialty coffee retailers know customers enjoy their unique atmosphere. They've also come to understand that if customers aren't drinking specialty coffee beverages, the other choices have to be just as special and unique to the environment. NorthwestKiddie CocktailsThe popular non-coffee drinks at the Coffee Nook in Lake Oswego, Ore., are mixed drinksnot made with alcohol, but with cider or fruit. Owner Julie Abbot doesn't offer many already-bottled drinks in her store. Rather, her customers prefer hot caramel apple cider in the winter or fruit smoothies in the summer. Only about 10 percent of her sales are made up of non-coffee drinks. In the cozy Coffee Nook with its leather couches and overstuffed chairs, customers typically relax with a cup of specialty coffee or a flavored latte. In the summer, she receives many more requests for smoothies, 10 or 15 a day, as compared to 10 a week in the winter. Her location plays a big role in her decision to carry juices and very little else in bottles. The store is located within a neighborhood. "I have a lot of families that come in and I like to carry juice so the children have something to drink," says Abbot. She says that children are the main consumers of her juice drinks. Being in a building that connects to a grocery store also contributes to her choice in beverages. That location provides her an immense amount of foot traffic for coffee. But she decided not to carry gourmet-bottled juices and drinks because people could buy them at the grocery store, and probably at a better price than she could sell them. By avoiding bottled drinks, it keeps her inventory low and doesn't put her in direct competition with the grocery store. Abbot buys her juice from United Grocers, where she buys many of her supplies. She tastes the juices before she buys them, but chooses only a basic assortment that small children would probably enjoy. The juices are displayed in a cooler, which is the only advertisement. She prices juices at a 50-percent markup, as she does with her pastries and other non-coffee items. The winter favorite of non-coffee drinkers is the caramel apple cider. To hot apple cider, Abbot adds a dollop of caramel, tops it with whipped cream and a drizzle of caramel. She sells the 12-ounce drink for $2.50, the 16-ounce size for $3 and the jumbo 20-ounce version for $3.50. Pairing Desserts With Iced TeasAlong with specialty coffee, Sweet Indulgence in Sioux Falls, S.D., serves up more than 20 different gourmet desserts. "We've become known as a specialty dessert place," says co-owner James Luther. He and Sandra Granberg have owned the store, which is located in a mall of exclusive shops, for about two years. In keeping with their store philosophy of offering specialty items, Sweet Indulgence offers unique non-coffee drinks as well. One favorite is Tropical Iced Tea, a big seller in the summer. Luther says he and his partner provide customers with a large menu that includes two pages of espresso creations and one page of iced drinks. That page includes the Tropical Iced Tea, as well as Italian sodas, lemonade, regular ice tea, flavored milks, and Sioux City Sarsaparilla. Luther also sells a bottled soft drink, Buddy Soda, in orange, strawberry and grape flavors. When it comes to hot drinks, Luther says chai lattes, hot chocolate and flavored steamed milk, like the Steamed Milk Fantasy listed on the hot drink menu, sell very well. Many of Luther's customers are from an older generation, which is why Sweet Indulgence caters to those who prefer a smoother blend of coffees. The chai and flavored steamed milk offerings also fit in quite well with the clientele. Because Luther likes to offer customers something new every time they come in, the non-coffee beverage menu is always evolving. Employees bring ideas for different steamed milk concoctions or bottle drinks they've enjoyed, and the staff has a tasting session to develop new drinks. "We like to be original," says Luther. "We experiment and make changes so that drinks are unique to Sweet Indulgence." When pricing newly developed drinks, Luther says he considers the cost to make them and adds in overhead, generally marking them up by 50 percent to reach the selling price. NortheastCompetition Narrows OfferingsKeeping an eye on the competition has helped Kevin LaPlante, owner of Adirondack Coffee, Clinton, N.Y., decide what type of non-coffee drinks to serve customers. Although his closest competitor doesn't offer coffee, the drug store features a display of six coolers in its front window with all types of juices and soft drinks at a price LaPlante says he can't match. But that's okay with him, he says. LaPlante designed Adirondack Coffee Company to be more like a bistro than an espresso bar. He serves breakfast and lunch (and dinner on Fridays), with wait staff bringing food to the table. Six different breads for sandwiches are baked on site, and coffee is roasted in the store fresh. For non-coffee drinks, LaPlante offers fountain drinks and juice served by the glass. Customers can choose from orange, apple, cranberry and V-8 tomato juice. Serving juice by the glass and offering fountain drinks for non-coffee drinkers fits in well with the café-style of the establishment. LaPlante says he keeps his prices in line with what other restaurants in the area charge for drinks. "Our non-coffee drinks make up in excess of 40 percent of our drink sales," says LaPlante. "We sell juices, fountain drinks and tea. The chai business has grown like crazy." Bottled juices once sat in a display cooler at Adirondack, but they didn't generate enough in sales to keep them in inventory. LaPlante explains that anyone looking for a bottled drink would stop in the drug store next door instead. "The store could sell it cheaper than I could because they were buying in much larger quantities," says LaPlante. New Owner Plans Menu ChangesSamantha Parks recently purchased Perk Up in Grand Ledge, Mich., and already has made some non-coffee-drink purchasing decisions. Parks managed the coffeehouse for more than a year before becoming the owner in January. She says her customers will be the biggest influence on what she decides to sell, but adds that she's not afraid to try something new that hasn't been tried in the area. Chai is a big seller for Perk Up, second to coffee and espresso drinks. She plans to add more flavors and the organic variety of Oregon Chai. One of the most popular winter drinks is Perk Up's Cider Chai, using apple cider to replace the milk of a chai latte. Parks continues to carry bottled soft drinks. Her customers prefer the specialty soft drinks, like bottled IBC root beer and Orange Crush, rather than the fountain soft drinks. Another planned change to the drink menu is to bring in more bottled juices with natural ingredients. Parks thinks the current juice drink the previous owner carried is too sweet and too expensive. "I'm going to be offering a lot of new things," says Parks. "Some will catch on and some won't, but the customers will let me know what's going to work." SouthwestGoing With a Local BrandInforming customers about items not related to coffee has always been a hard sell for Janet Duncas, owner of Rosie's Espresso Bar and Café, Scots Valley, Calif. The neighborhood coffeehouse was established 13 years ago; Duncas bought it from the original owner just under five years ago, and was an employee of the operation before that. "The coffee brings them into the house, but trying to let them know we have other things is hard," says Duncas. "They always seem so overwhelmedthey don't even know we sell sandwiches and burritos." Training employees so they can explain to customers what non-coffee drinks are available is one way to inform, using photos is another. "I think it has to be visual so they see what's available," says Duncas. The problem with that is the bar area can become so crowded nothing stands out. "I have had pictures up when we add new things like smoothies, but it gets crowded and I take them down. Then a whole new crop of people come in that don't know what we have." The non-coffee drinks that sell best for Duncas are fruit smoothies and Odwalla bottled drinks. She chose Odwalla because the company was started nearby in Santa Cruz, Calif., even though it was recently sold to Coca-Cola Company. Duncas says Odwalla drinks generally sell well because it's a known brand in the area and she houses them in an Odwalla cooler that's highly visible to customers. The problem with selling the brand for Duncas, however, is that the food market next door also sells it. Duncas says she sells the drink a few cents less than the market but close to the suggested retail price by the Odwalla company. Other popular cold drinks offered by Rosie's Espresso Bar include fruit smoothies made with real fruit puree and ice. Duncas says they're a favorite with the moms and kids in the neighborhood. Yerba Maté on the MenuAlthough coffee is the main course at Cafe Mundi in Austin, Texas, owner Jessica Nieri has created unique fruit and maté drinks. When choosing non-coffee drinks to offer her customers, Nieri bases her decisions on listening to her customers and employees, and keeping tuned into what's new in the market. The drink also has to fit in with the philosophy of her coffeehouse. She features drinks and food from around the world and tries to use natural ingredients. One of the most popular drinks at Cafe Mundi is yerba maté. "It's an alternative to coffee and it has green tea in it, but also vitamins and minerals," explains Nieri. For a warm winter drink, the coffeehouse created the Mint Maté Latte. This green version of a latte mixes yerba maté with steamed milk, mint syrup and honey. In the heat of a Texas summer, the Agua Fresca is often requested. Named in deference to Nieri's many Hispanic customers, the drink is a blend of fresh fruit and water, sweetened with sugar. A big glass jar of Agua Fresca displayed on the counter is the marketing tool Nieri uses to entice customers to try the beverage. Fruited lemonades served in mug-sized glass jars also ring up sales in the summer. Nieri mixes fresh-squeezed lemonade with cranberry, pineapple and orange juice for her signature lemonade. Another non-coffee specialty drink at Cafe Mundi is made from the hibiscus flower. Nieri says hibiscus is the most vitamin C-packed ingredient in all the drinks they serve. The hibiscus is brewed with fresh mint, blended with white grapefruit juice and served with grated ginger. "It's sweet and tart and tangy," describes Nieri. To price these creative drinks, Nieri figures the cost of goods at 30 percent of the final price. She also checks with other coffeehouses in the area to see what they are charging for specialty drinks. "I want to include enough for overhead, but don't want to be too under or too over what other coffeehouses in town charge," she says. SoutheastFresh-SqueezedFresh is the order of business at Grey Friars Coffee and Tea, Chattanooga, Tenn. Owner Ian Goodman serves espresso drinks and roasts on site. He also serves fresh-squeezed orange juice and lemonade. Goodman opened the coffeehouse just over five years ago in a neighborhood near a university. The long hours, from 6:30 a.m. to midnight, bring in a variety of customers, from mothers with small children to students studying late. Because Goodman roasts in-house and wants to concentrate his business on his coffee and a wide selection of tea, he decided not to offer bottled drinks. "Basically to carry bottled juices I would have had to line up another new vendor, and the juices had only OK margins, so I went with fresh-squeezed," he says. The juices are made with an electric juicer; orange juice sells for $2.50 a glass, lemonade is $1.50 a glass. The cost is approximately 28 percent of the sale, says Goodman. He lists the items on his drink menu behind the bar on the wall and also on the paper menu customers can pick up. Goodman figures juices and smoothies provide only about 5 percent of his sales. "Most of what we sell is coffee or tea, in any given form, making up about 70 percent of sales," he adds. Grey Friars Coffee and Tea features 20 varieties of loose-leaf teas. The coffeehouse does not carry flavored tea or flavored coffee. "All our teas are estate teas," explains Goodman. "We have a few scented teas like jasmine, but all the rest are green, black or oolong." The fresh concept works for Goodman. Keeping his juices squeezed to order is consistent with his philosophy of serving coffee roasted on site. Finding Sources for New drinksMuddy Waters started out being unique when it opened its doors two years ago in Elizabeth City, N.C. It was the only coffeehouse in the area. Owner Audra Marx likes to keep it that way by offering unusual products or special drinks only Muddy Waters carries. "I carry some unusual sodas and juices like hot ginger beer that people can't find anywhere else," says Marx. Marx works with three distributors in her area, checking their product lists and trying out the new products. One distributor in particular knows Marx looks for different types of products and will search out new items for her to try. To learn about a wider variety of products, she reads trade publications to see what's big on the West Coast so she can introduce it to her community before anyone else. Recently she introduced Choice Organic Tea to her customers, an item she had tasted at a trade show. The problem she has found with researching at trade shows and through trade publications is that her local distributors may not carry the products she's interested in. That happened when she decided she wanted to carry bottled Honest Tea brand drinks. She's now working with the company directly, hoping it will find a distributor in her area. Chai is a popular drink at Muddy Waters, as well as Italian sodas. Marx says the younger kids are into creating their own flavors of Italian sodas, and she's able to attract a more junior clientele because her shop is located near a school. In the summer, frappes pull in sales. Marx and her employees dreamed up a chai frappe by blending vanilla frappe mix with chai concentrate instead of espresso. She says the result has been a big hit with her customers. In pricing her drinks, Marx bases it on the price of ingredients, including any shipping costs, and then adds her normal markup. If it seems too expensive compared to her other drinks, she may adjust it down slightly. Marx is not afraid to ask what her customers think, either. "We've been known to try a new drink, letting customers taste it and not charging for a day or two to get feedback," she says. "We'll create the new drink and we might ask, 'What do you think this drink should go for?' You can do things like that in a small town." CanadaFew Non-coffee Drinks Keep Inventory LowNicole Crowe chose the juices she serves to her customers because they are 100 percent natural. Crowe owns Rustic Cosmo in Toronto with her mother Debbie Crowe. They've been running the business for seven years, and were recently voted one of the top 10 cafes in Toronto by an area entertainment weekly magazine. Rustic Cosmo serves its share of specialty coffee drinks, but also offers sandwiches, wraps, salads, a spicy chili and homemade lasagna. All food is made in the store kitchen. "We're the only place in the area that serves homemade muffins, banana bread and other desserts," says Crowe. She offers four varieties of coffee each day, and says she has to keep three the same everyday or customers will complain. Because of the overwhelming preference for coffee, the only non-coffee drink, other than smoothies, she offers is bottled Ocean Spray juice. The juices sell themselves in a serve-yourself display cooler. Crowe charges between $1.25 and $2 for a bottled juice. Smoothies, which are popular in the summer at Rustic Cosmo, are made with fresh fruit and fruit juice. Crowe charges $3.75 for a 16-ounce smoothie. She says the prices for her drinks are figured on a 30-percent cost of goods ratio. Italian Sodas Add to AmbianceFor the eight years Michael Meffe has owned Espressimo Caffe in Toronto, he's tried to stay true to the Italian roots of an espresso bar. He serves European-style roasts of coffee, and concentrates on perfecting espressos, cappuccinos and lattes. As in the espresso bars of Italy, he also serves wine and other alcoholic beverages. Surprisingly, Meffe says liquor makes up very little of his sales. Most of his customers like the socializing atmosphere provided by an espresso bar that also sells wine, but prefer to drink an espresso or cappuccino. Staying with the Italian background of his espresso bar, Meffe carries mostly bottled beverages that have an Italian feel to them. San Pellegrino, the hip Italian water company, also distributes Italian sodas called Lemonada and Orangeada, that Meffe serves. He also sells Italian sodas made with syrups and charged water. People come in for the espresso and coffee, as well as for the small breakfast menu with pastries and dessert items. Espressimo Caffe has room to seat nearly 30 people, and Meffe says his concentration on the Italian motif has set him apart from nearby competition. He adds that his customers like the espresso bar concept, which is why the Italian sodas and bottled San Pellegrino drinks have worked for him. * Copyright
© 1999-2002 Adams Business Media, Inc. Please
Note: Some pictures or diagrams are only Originally
published - March 2002
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Editor's
Note
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Coffeehouses
are in the business of selling coffee. At times, however, customers may be looking
for the atmosphere a coffeehouse can offer, but not the caffeine. An array of
fruit beverages or teas generally appeases the thirst of these customers. Chai
tops the list for alternatives to coffee, followed by other tea beverages and
smoothies. Yerba maté, a South American beverage, is finding a following
in those that want less caffeine but an energy boost from a natural source.
Italian sodas are becoming more widely accepted as retailers say children like
creating their own soft drinks.
