Caribou blues

Customers who stopped in at their local Caribou Coffee this morning might have gotten an unexpected surprise: The doors were locked and the lights were off.

The company closed 80 stores over the weekend and will convert 88 stores to its sister brand Peet’s Coffee & Tea in the next year and a half.

Minneapolis-based Caribou Coffee is the nation’s second-largest coffee chain. Now, it will have only 468 Caribou locations in Minnesota, North Dakota, South Dakota, Wisconsin, Iowa, Kansas, North Carolina and Denver. There won’t be any more Caribou Coffee in the Chicago area, which was the company’s second-largest market, and the company is also leaving Michigan and leaving its almost two dozen stores in Washington, D.C., among other places.

The move is linked to a strategy by the German company Joh. A. Benckiser, which bought and privatized Caribou Coffee last year, then bought Peet’s Coffee & Tea in a separate deal. Last Friday (April 12), Benckiser announced plans to buy the European coffee brand D.E. Master Blenders 1753, according to The New York Times:

The deal is one of the largest takeovers so far this year in Europe, and is the latest coffee acquisition for Benckiser, an investment vehicle for the wealthy Reimann family of Germany, which also owns well-known brands like Jimmy Choo shoes and Sally Hansen nail polish.

But the biggest lesson to come out of the move isn’t the business strategy involved in re-focusing a brand after a major acquisition. It’s simpler than that: Don’t leave  your customers in the dark when you’re taking away their favorite shop.

The news came without warning and without much explanation, and it came through employees before it came from the company itself. In a report on the closings on April 8, Chicago’s WGN said simply, “A spokesperson wouldn’t return our phone calls or emails.”

President and CEO Mike Tattersfield did release a brief statement on April 8, as reported by the Detroit Free Press:

“Over the past few months, we at Caribou have revisited our business strategy, including closely evaluating our performance by market to make decisions that best position us for long-term growth.”

Since the company didn’t publish a list of the affected locations, reporters had to deduce which local stores were closing by contacting employees at each store. WGN interviewed an employee who said Caribou only gave him nine days’ notice before the store was to close.

Meanwhile, whoever handles the company’s Twitter and Facebook is now responding individually to customers groaning about the store closings. Shortly after Caribou released a vague press release about the closings, Carol Tice criticized the brand’s social media strategy on Forbes.com, saying that they should have posted more about why the decision was necessary. What we’re seeing now seems to be an improvement, even if some customers are still confused. Maybe the company hired a new PR specialist?

People are highly emotional about their coffee — especially, perhaps, because the company’s conversational, upbeat brand strategy makes for loyal customers and employees. As Mary Schmich said in the Chicago Tribune:

Caribou customers have been in mourning, as if for a pet or a friend, grief that has been met with some mutters of, “It’s only coffee.”

Caribou Coffee napkin photo by Anjum, Flickr Creative Commons.

The cult of Starbucks and why a good barista matters

By bfishadow on Flickr, Creative Commons use

What’s the biggest indicator of a specialty coffee shop’s success? Not the location. Not the ratio of couches to stools. Not the kind of soft-rock-alt-folk-jazz coming from the overhead speakers. Not even how good the coffee is.

It’s the baristas, according to a J.D. Power and Associates study cited today at Roast Magazine’s Daily Coffee News blog:

The report measures overall customer satisfaction with specialty coffee retailers by examining five key factors in order of importance. They are: staff (34%), merchandise (23%), cost (18%), facility (14%) and sales/promotions (11%).

The study gave Starbucks’ staff top marks, ahead of Caribou and Seattle’s Best and tied only with Dutch Bros. Coffee, which won the overall “best specialty coffee retailer” award.

Having friendly and knowledgeable baristas promotes attachment to the coffee shop brand — you feel at home. That also probably determines the degree to which customers are willing to fork over time and money for their coffee experience:

The report finds that customers spend an average of $7.31 per visit to a specialty coffee retailer. The average amount of time customers spend in the checkout line is 6.3 minutes.

This all relates to a March 2013  article on the Huffington Post examining why Starbucks continues to be so successful, despite its reputation as “the McDonald’s of the coffee industry” and large numbers of people (myself included) who dislike the taste of Starbucks coffee. The key is brand loyalty — that is, everything surrounding the coffee itself:

“The enduring brand loyalty is about the core offerings, which is not just coffee,” Raghubir explained. “It is the experience of going to Starbucks.”

Interestingly, this “Starbucks experience” can also cut the other way as independent coffee shops try to differentiate themselves from the green giant. In a Slate post titled “How Do You Compete With Starbucks in the Coffee Industry?” cafe owner Peter Baskerville offers this advice for independent coffee shops:

It’s OK to be familiar with your customers: Chains like Starbucks can’t risk their brand value by allowing service standards to be determined by their transient university student staff, so they create and enforce strict codes and processes for “serving” customers, which I think is inappropriate for the high-repeating clientele. Long-term independent cafe owners are not so constrained and can leverage the opportunity that multiple visits creates, to become familiar with their customers.

This seems to be the trend: Starbucks has mastered the art of repeatable routines, but independent cafe baristas still have a lot of opportunity to build customers’ loyalty to their “brand.” Starbucks baristas — at least according to the J.D. Power survey — tend to be knowledgeable and fast because they’ve had training drilled into them over and over. This is why you can walk up to a Starbucks and know exactly what you’re in for. Starbucks is comforting, predictable and unsurprising.

Independent coffee shops have different opportunities. They, too, can have friendly and knowledgeable baristas who are trained with Starbucks-like drilling and memorization. They might not have Starbucks-level brand recognition, but the people behind the counter are more important than the range of menu options or anything else. Bonus: They also know the community better, they have more flexibility — and they don’t all play the same Norah Jones albums over and over and over. Then again, J.D. Power and Associates didn’t ask their survey respondents about that.

Related: 

Just like the latte art competitions I mentioned a few days ago, did you know that there are national barista competitions?

Read what a Starbucks barista learned from the job. 

Pay it forward, coffee edition

You’ve probably heard of people who go through a fast-food drive through and pay for the meal of the person in line behind them.

Something similar is now happening with coffee: People are paying for future coffee customers’ drinks in an act of goodwill that originated in Italy and is catching on around the world. When you buy a cup of coffee, you pay the barista for an extra “suspended coffee” or two, which will be given to people who are homeless or otherwise cannot afford the luxury of a cup of coffee.

The movement has reached Bulgaria, Canada, Britain and Australia so far, and I won’t be surprised if it comes to the U.S. soon. The movement has become an email forward and even has its own page on Snopes.com, so you know it’s hit the big-time.

In the latest iteration of the trend, Starbucks has embraced “the spirit” of the idea in Britain — whenever you pay Starbucks for a “suspended coffee,” the coffee giant will donate the equivalent in cash to a British charity that works with homeless people.

To me, Starbucks’ version just isn’t the same: It doesn’t feel quite as organic or spontaneous. It doesn’t allow you the pleasure of knowing that someone else will actually receive your extra coffee in the same physical coffee shop location. But still, it’s nice to see the gesture catching on. It’s also a testament to the strength of people’s emotional attachment to coffee — we prefer even our anonymous giving to be caffeinated.

Photo of person with coffee by Dmitry Barksy, Flickr Creative Commons.