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Coffee: one hot prospect

Store Equipment & Design, June, 2000 by Marilyn D. Cavicchia

Adding an espresso bar? Here's how to make sure it helps your image rather than hurting it.

I think you have to have [coffee bars] in today's world as far as the grocery store goes," says Robert Stiles, president of Gelson's Markets, Encino, Calif. "They're not high-volume, but they certainly bring customers in."

In-store coffee bars, increasingly popular as Starbucks brings espresso drinks mainstream, can see margins of 65 to 80 percent, according to George Tsokolas, senior manager at Arthur Andersen, Chicago. Not bad, considering that 67 percent of shoppers whose supermarkets offer an in-store coffee program say they never belly up to the bar, according to FMI's Trends in the United States.

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Supermarkets could do a lot more to reel in those customers, according to Alex Fisenko of Alex & Associates Espresso Business Consulting--the man who claims to have opened the first espresso-based coffee bar in the United States, and taught the business to one of Starbucks' founders.

Fisenko recounts a recent visit to a supermarket chain in the Midwest whose coffee bar was underperforming:

"There was absolutely no [exterior] signage of any kind, no indication that there was coffee inside the supermarket." There was no interior signage, either, and the coffee bar was hard to find. When he did find it, he says, It was cluttered with all kinds of junk that didn't belong on it. The menu was just glued or taped to the countertop. The [espresso] machine was installed improperly on the back counter with no room to walk around it."

Finally, Fisenko adds, the latte he ordered was terrible. "And they were wondering how come they're not selling any espresso!" he marvels.

ATTRACTING ATTENTION

Most coffee bars in supermarkets are put in with the idea that foot traffic alone will be enough to drive sales, according to Tsokolas, who says retailers "definitely" need to be more aggressive in marketing and signing the coffee bar, perhaps even using direct mail. Many supermarkets are in strip malls that have marquee signs by the side of the road, adds Fisenko; why not include a mention of the coffee bar to pull in commuters?

The need for marketing is a lesson Bernadette Snoops, general manager at Lauers IGA, Pasadena, Md., has learned. Last year, the two-store company opened a large fresh foods area, including a coffee bar, in its Pasadena store. The coffee bar has not yet met expectations, Snoops admits. "1 think we have to do more promotions with it," she says.

Once shoppers are in the store, the coffee bar should grab their attention right away, Tsokolas says: "For a coffee shop, most customers don't want to walk more than 50 feet from their car to get the coffee." The same holds true for an in-store coffee bar, he adds; it should be at the front of the fresh foods lineup-preferably next to bakery for cross-selling--and "very close to exit and entrance doors," allowing a quick grab and go for shoppers on the run.

Besides this convenience, the coffee bar also needs to offer a pleasant seating area for those who prefer to linger as they sip, experts say. Gelson's strikes just such a balance; recent stores in Calabasas and Northridge, Calif., have the bakery and coffee bar right up front, near a seating area complete with fireplace. While the rest of the store opens at 7 or 8a.m., depending on the location, the bakery and coffee area opens at 6 to catch morning traffic.

"You want to create a relaxing area for the customer," says Nancy Wade of King Design International, the Eugene, Ore.-based firm that designed the Gelson's stores. Lighting should be soft, though bright enough to read by, she says; deep, sophisticated colors add a sense of tranquility. "Warmth and comfort come to mind more than bright, crisp, primary colors and materials," Wade adds.

WHAT'S ON THE MENU?

Supermarkets that put 30 or 40 drinks on their coffee bar menus aren't doing themselves any favors, Fisenko says; instead, they confuse customers and make it harder for them to make a decision. Another common menu mistake, he says, is to list the $1 house coffee at the top left, drawing indecisive customers' eyes before they can get to the $2.50 latte or cappucino.

Keith Kovar, executive vice president at Grid/3 International, New York, says a certain amount of excess on the menu is actually a good thing. "I would suppose that 70 percent of the [coffee bar] business comes out of 5 percent of the menu," he says. "But to create the atmosphere and to create a sense of choice, you have to have those other things, even though maybe you only make one a day." The menu for Mocha Jack's, a coffee kiosk designed by Grid/3 that opened recently in a mall in Norfolk, Va., includes about 25 items, Kovar says.

Grid/3 took special care to ensure the menu's legibility: "Once we produced the [menu] layout, we blew it up to full size in bits and pieces and then taped it all together so we could stick it on a wall and get as far back as a

customer would be, to see whether we could actually read the stuff or not," Kovar says.

Coffee: one hot prospect

Store Equipment & Design, June, 2000 by Marilyn D. Cavicchia

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