So what makes a good coffee?

Over the past two to three years I have become convinced that in order to be one step ahead of your competitor – you need to be able offer a good coffee to your customers. Not one of those where the customer presses a button on a machine, places a paper cup underneath – and presses a selection of buttons! They are beyond redemption. You get a part of whatever the last person chose to drink. So if you press cappuccino, and the person before you selected a hot chocolate – your drink has a part coffee and part chocolate taste.

In my view you are better off serving any of these selected drinks from boiling a kettle of water and putting the hot chocolate powder or coffee – into a cup and filling it up!

I digress here. I only converted to drinking coffee a few years back, along with millions others around the world. And as a convert I am perhaps harder to please than most? That being the case I quickly became an addict of the Wild Bean coffee served at many Bp Express shops. This also meant that because I was on the site I made use of their other offerings while waiting for my fix of caffeine. But of late I have become more and more disenchanted with their coffee – and this is the point of article today.

It has given me the opportunity to explore and experience other coffee offerings at other convenience stores. And that is perhaps not a bad thing as I am bit of a creature of habit – if I know you will serve a good cup of coffee I won’t go elsewhere. And so I have frequented a few Brazilian outlets, Seattle Coffee, Gloria Jeans, and Wimpy outlets. It became if you like, a bit of a personal mission for me to try and understand just where my (what used to be) favorite brand went wrong. I even tried the new offering at SASOL delights where they have one of those automated dispensing machines and those old ones used at Steers outlets.

My thoughts on dispensing machines have not changed – in fact my attitude is I would rather buy a bottle of water than waste any more money trying to drink something that sort of tastes like coffee – but is not the real thing.

And so for the past 6 months I have been trying to find out just what can go wrong with a good strong brand suddenly losing its appeal to an avid loyal customer? Here is what I found:
1. Today I stop and buy my coffee from your outlet and it is just great. So I come back tomorrow – and it is awful. It is the same outlet, the same bean and the same – in many cases – very expensive machines. So how can it all go so horribly wrong? It is the inconsistency that I came across – both in taste and in presentation that became an issue for me.
2. Today I stop at a branded outlet and get a great cup of coffee and tomorrow I stop at the same brand but a different outlet – and it tastes awful. Same brand, same machines, same bean?
3. I then started to watch the preparation that goes into making a good cup of coffee. In some cases care was taken when preparing the coffee – and in other cases it was a downright “don’t care attitude”. Just pour the stuff, and hand it over.
4. And then I started to look at the hygiene factors – the cleanliness of the machines, the lack of hygiene when putting the lid on the cup, and so on.

My view is if you are going to serve coffee well – either do it properly or not at all. Hot drinks as a category are still growing both here in South Africa and globally. And that is good news for those of you looking to grow your market share and improve your overall profitability. So if you do choose to ignore this trend, you do so at your own peril. But do it properly.

Here are some of the reasons I think we have such inconsistency in this market offering:
1. The grind being used by the person serving the coffee is different. The grind makes the difference between a good cup and a poor one.
2. If you use porcelain cups – the cups should be warm not cold when making the coffee.
3. The temperature of the machines can vary – and again add to the inconsistency.
4. The pressure of the machine will also add to the inconsistency.
5. The pressure applied to the head needs to vary based on the temperature of the machine and speed of dispensing. This is perhaps the hardest one to teach our staff – but practice makes perfect.
One tip I did learn on this personal journey of mine – is to look at which header the staff are using when making the cup of coffee.

Most of our sites have single header and double header machines. When making one cup of coffee at a time – your staff should be using the single header. But they don’t. They invariably use the double header – and that automatically tells you that the grind of the coffee is wrong and the staff knows it. So to compensate they use the double header. As a customer when you see this – you know you will get served yet another bitter cup of coffee!

One customer that saw me commenting on this said – that he thinks he gets better coffee when this happens as they have to put four spoons of grind into his coffee instead of the normal two! Two things with this – the flavor of the coffee will be more bitter than need be and secondly you the owner will be halving your profit!

So where to from here? Next week we will discuss some suggestions.

Take care out there!

Jocelyn Daly
If you are looking for assistance in this regard you can contact us directly via our website at http://www.cstores.co.za or email us at cstores@iafrica.com.

My business model

Recently an industry colleague of mine said he really enjoyed reading my blogs and ideas – but he was struggling to find any business model in what I am writing about. And he has a valid point!

After all in one blog I write about operations, the next blog about promotions and the next blog about out of stocks.  So I thought that this week I would try and put it all into some sort of perspective.

I am passionate about this industry and particularly its growth potential. But I see it from the customers’ perspective. Yes I know customer is king in theory – but in practice we are not doing a good job of looking after our customers on all fronts.

We think we are looking after their needs but in reality that is not what it looks like in our stores. Our range is poor, our pricing and labeling is shocking – and our stock levels are near non- existent in a large number of our stores in prime locations. And of course our store layouts and all the other issues I have talked about play a role in keeping and growing our customer base. And this is what I am about.

I had the mis-fortune as it turned out last week – of taking a group of new dealers on site visits across all the different networks in the Sandton/West Rand area. All in all we visited 21 stores. There was not one – and I repeat not one – that had anywhere near full shelves. In fact most were a disgrace – and it was mid week, not even the weekend! And the housekeeping standards were appalling!

Normally when I do this – there are one or two that stand out and it is very apparent why they are doing well – but not this time.

How customers even buy pies for example from some of these outlets is a mystery! And for most stores these are our top sellers outside of cigarettes and oils etc. Just imagine what we could do with our sales if we got the basics right!

A while back I asked where are our suppliers in all of this? What are they doing about it – and the Franchisors?

If a Kwik Spar with 100 times more lines, can keep their shelves full with pricing labels up to date – with less staff in the back office – can do it right – so can we!

And so now I hope what I write about makes sense, as to where I am coming from. Yes I discuss store layouts or out of stocks – but it all has to do with doing the best we can for our customers. Right now it looks like we are taking them for granted.

If we get it right just imagine how much more profitable we could all be!

Take care out there

Jocelyn Daly

To brand or not to brand

Probably the most frequent question I have been asked by retailers, over the last 15 years, is whether it is better to have a branded shop or a non branded shop. Well what do you think? In my view it all depends on you, the dealer. Let me try and explain why I say this.

Firstly the upfront set up cost. These are halved if you build your own shop and fit it out with the fixtures and fittings yourself. This is especially true of any of the oil company branded shops. Over all the years of working with the different oil company networks, it has never ceased to amaze me at just how the choice of equipment, fixtures and fittings are made. Aesthetics are given the most weight while durability is way down on the list of priorities. Anyway, I digress here. So up front your costs are halved.

Secondly, if you have a non branded shop, there is no rent or franchisee fee to be paid. In some networks these have become excessive and onerous for the operator of these stores. How the rent or franchisee fee is calculated is also variable and perhaps best left to a discussion on this later.

So you save in two ways, once up front and then on an ongoing basis going forward. But herein lies the nub of the question – brand or non brand. Our customers prefer shopping at a branded outlet. Why? Because there is the feeling that if it is part of a recognised network, it will be managed better than a Mom’s and Pop’s store. So if you were considering buying a pie for lunch – where would you stop to buy this product? Mom’s and Pop’s or a branded store?

Across our industry, branded stores tend to have better turnovers and have a bigger basket of goods than a non branded store. However, I do know of some exceptions to this rule – and that is why I said up front, it depends on you the retailer.

Where non branded stores do well is when the retailer himself, has had retail experience and understands his market and his customers. They work very hard within the shop, doing the buying, pricing and are generally far more hands on, than the average franchiser, retailer out there. So if you have worked in this industry and are prepared to be very hands on – it can work. But in general, the turnover figures can be up to half that of a branded store.

Yes I know, if you take the franchisee fees away from the gross profit, for a branded store, you might very well land up with the same net profit in a non branded store. In other words with reduced turnover in a non branded store and without franchise fees, your nett profit in some cases may be very similar. But in my experience, your growth stagnates quite quickly in a non branded store whereas in a branded store your opportunities to grow are much better. This is largely because of the consumer brand building done by the large franchisors.

If you are looking for long term growth and some sense of certainty of customer support, then the only route to go is that of a branded retail outlet. In my next blog I will continue this discussion as there are some significant proviso’s to this point of view….

In the meantime take care out there

Jocelyn Daly