


Bruce Milletto, CEO of Bellissimo Coffee InfoGroup and a leading industry watcher, thinks the company's motivation is more basic: Starbucks is returning to its roots as a comfortable "third place," a living space that goes beyond the home and the office. "People want to have ‘their' coffee bar, and they want to have ‘their' coffee," says Milletto, who remembers when Starbucks was a hip chain of four or five shops. "Starbucks has realized that's a niche they're no longer filling."
Bruce goes on to say, "Once you have thousands and thousands of stores, it's difficult to have consumers look at you in the same way," Milletto says. "I think in coffee, the small independent will always win out if it's doing a fantastic job."
Though the recession has hurt some coffee sales, it hasn't ended
Americans' move toward higher-quality coffee, says Bruce Milletto,
president of Bellissimo Coffee InfoGroup, which provides consulting and
training to the industry. "Our taste buds have memories," Milletto
says. "Once you drink a really excellent cappuccino, it's very hard to
go back even to a chain store that may be using automatic machines."
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Owners of small coffee shops take plunge during recession
[Article Excerpt]
Profits are important, however, as some shops have learned the hard way, said Matt Milletto, vice president of the Portland consulting firm Bellissimo Coffee InfoGroup and director of training at American Barista & Coffee School.
"Before you think about open-mic nights and the muffins you'll bake in the back and how your friends will come in, you need to understand that none of that will be possible if you're not making a profit," Milletto said.
A coffeehouse typically costs $150,000 to $500,000 to start, he said. In a successful shop, profits are 10 to 18 percent of sales, and the biggest expenses are labor and the cost of coffee, milk and other goods.
Location, location, capital
The biggest mistakes stem from undercapitalized shops and bad locations, Milletto said. "People will open their doors with their last dime and forget so many of the expenses ... that it's hard to make a good first impression."
Lately, Milletto sees fewer shops opening than usual because banks and investors have pulled back on funding. "There seems to have been a freeze on first-time business owners," he said.
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Starting a Coffee Shop Business Podcast
Produced by Startingabiz.com | June 30th, 2009
Bruce Milletto, president of Bellissimo Coffee InfoGroup and founder of the American Barista and Coffee School, offers his insight about how to start a coffee business to podcast host Matt Thomas of StartingABIZ.com. Bruce offers expert advice about getting started, choosing a location, picking the right coffee and espresso equipment, and more. [24 minute podcast]
Click here to listen to Starting a Coffee Shop Business Podcast
For the second time in two months, Matt Milletto, Vice President of Bellissimo Coffee InfoGroup and Director of the American Barista & Coffee School, defends the independent retailer on NATIONWIDE TV! As Matt says, "No, it is not all about price but quality." Click here to view feature on Fox Business News.
| The art of the Latte |
