The Canadian coffee market may be soaked in non-fat lattes and double tall mochas with whole milk and whipped cream, but there is still something missing, according to AFC Enterprises Inc., a U.S. franchising giant. What Canada needs is more coffee shops.
The National Post
October 23, 2001
Seattle’s Best takes on Starbucks Company: plans to open 22 shops in western Canada
Peter Kuitenbrouwer
The Canadian coffee market may be soaked in non-fat lattes and double tall mochas with whole milk and whipped cream, but there is still something missing, according to AFC Enterprises Inc., a U.S. franchising giant.
What Canada needs is more coffee shops.
AFC announced yesterday that it will build 22 more cafes, under the Seattle's Best Coffee banner, across western Canada over the next seven years.
Founded in Seattle in 1970, Seattle's Best Coffee already has 136 outlets in the United States, and three in Vancouver.
But while expanding into a market dominated by Starbucks may seem a daunting task, Seattle's Best insists it beats its rivals in taste tests, that its cafes are "warmer and more friendly," and that its commitment to help out the destitute coffee farmers in the mountains of Central America is more sincere.
Plus, the company says, Starbucks is fixing its coffee all wrong, what with its fixation with adding all that milk.
"Starbucks is milk-based to calm all that acidity down," says Jay Garnett, president of Vancouver-based Snowbean Coffee Co. Ltd., wholesaler and retailer for SBC in western Canada. "We are a multi-dimensional roaster. We have a range from mild to full roast coffee."
Mr. Garnett, who opened his third Seattle's Best Coffee shop in downtown Vancouver last month, added that, having overdosed on Starbucks' "southern European" style coffee, coffee drinkers are ready for SBC's northern European model, which he said emphasizes drip coffee rather than espresso. The market is far from saturated, he said.
"I remember news reports a few years ago saying they were saturated with 45 Starbucks in Vancouver, and now there are more than twice that many," he said.
Audrey Lincoff, a spokeswoman for Starbucks in Seattle, would say only, "We do not comment about other companies."
Seattle's Best Coffee emerged from the foggy mists of the U.S. northwest at about the same time as Starbucks. In 1968, Seattle's Best founder, Jim Stewart, bought a 12-pound coffee roaster from a peanut vendor on a California beach, schlepped it up the coast and installed it in his shop, the Wet Whisker, on Whidbey Island, Wash. In two summers he and his brother and business partner, Dave, sold about 500 pounds of coffee.
But while Starbucks, founded in 1971, focused on coffee shops, Mr. Stewart worked on wholesaling coffee beans. By 1998, when he sold the company to Atlanta-based AFC Enterprises, Mr. Stewart's coffee had become the choice for hotels, airlines and offices across North America.
Today, in addition to its Seattle's Best Coffee shops, it boasts 19 Torrefazione Italia locations.
Mr. Garnett has marketed Seattle's Best Coffee in Canada since 1994. These days the coffee is served at ski resorts owned by Intrawest Corp.; at the University of British Columbia; and restaurants and hotels across Canada, including the Sutton Place and Crown Plaza in Toronto and two Hilton hotels in Vancouver. Including grocery stores, Mr. Garnett has built a $10-million wholesale business across Canada for the U.S.-roasted coffee.
Overall, 65% of Seattle's Best Coffee's business comes through wholesale distribution, and any growth in coffee shops will help to boost that side of the business, the company says.
For example, Mr. Garnett said he negotiated over five years with Intrawest, and the breakthrough came only after he brought Intrawest executives into one of his Vancouver coffee shop to smell and taste the product.
"We said, 'We can put this up on a mountain,' and they finally got it," Mr. Garnett recalled. Once consumers taste the product in the coffee shop they are far more likely to buy a bag of it in the supermarket, he added.
Steven Schickler, president of Seattle's Best Coffee, admitted that "retail is a tougher question," considering the many coffee chains in the market. Starbucks, for example, plans to open 1,200 outlets in the year that began on Oct. 1 — the same number it opened in the previous year – although Starbucks declined to say how many of those will be in Canada.
"We try to create a different atmosphere (than other cafes)," Mr. Schickler said, "It is warmer, more friendly, slightly irreverent." In his company's new coffee shop in Seattle, "people are shaking up mochas like in a bar," he said.
Seattle's Best Coffee also makes an effort to build communities in the countries where it buys coffee beans. The company has opened a school and drilled a well in Santiago Atitlan, a remote, rocky area of central Guatemala, and is building 100 homes in an earthquake-ravaged area of El Salvador.
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