Coffee business might not be about coffee anymore.

by chee Leng (on coffee makers)
(Singapore)

Tim Hortons Restaurant

Think about this: you are going to work, you need a cuppa, do you purposely walk to your favorite coffee shop or simply grab a Starbucks or anything convenient that comes along?

I believe you would probably be doing the latter right? Most of us that need to report on time would be doing that as well.

This point comes to me as I was reading news on the latest expansions that coffee chain in the world are doing and they did not say much about how good their coffee is or how people loves their coffee.

They spoke of only one thing -expansions.

While it used to be locations, locations and locations for coffee shop business, bigger chains that have either run out of options in good locations decided that any locations is better then no locations.

The fact is, after all, one outlet can only serve so many cups of coffee per day. So, the more outlets you have, theoretically, the more cups of coffee you can sell.

Of course, by expanding to any locations, they are faced with the possibility of many "no business" location.

By the way, that is where Franchising comes into the picture.

Market your brand to make is appealing then get other people to invest in locations that you are not familiar with.

The more they expand, the more well known they get, and then they expand even more.

Tim Hortons that do not have much interest as of now in Middle East in UAE, Kuwait, Oman, Qatar and Bahrain over the next 5 years.

And we are talking about 120 outlets -again, that is expansion for you.

So, did Tim Hortons market about how good their coffee is to the middle east folks? Being accessible via having many locations is the deal here.

So, seems like location is key to doing good business. Now, what about Starbucks, the biggest coffee chain around?

Have you hear Starbucks talking about their coffee? It is always about the Starbucks experience right? Good ambiance and great customer service is their value add, their competitive advantage.

My two cents is, location and experience seems key to building a coffee empire (rather than good coffee).

There are probably many shops around that are proud of their coffee, their roasting, their blends and using it as their competitive advantage.

The problem is, this advantage is not helping them grow fast enough...