In the early years of retail specialty coffee, few independents developed savvy marketing programs or strategized about how to grab market share. The industry was still new and the biggest challenge retailers faced was how to educate the public about the difference between a mocha and a cappuccino.

Competitive challenges, that were not problematic or did not exist at all a dozen years ago, loom for the specialty coffee retailer in most parts of the U.S today. These challenges are certainly not impossible to overcome, nor should they dissuade budding entrepreneurs from opening a new business or expanding an existing one. However, they must be taken seriously to stay profitable.

The biggest challenge is how to compete against the chains. At one time there was only one actual national chain... Starbucks. Today, there are hundreds of smaller chains that you must consider in your overall and ever-changing business plan.

I have written and lectured many times on exactly how to out-market a large national chain. I often use the following analogy: "You are the skateboard and they are the semi truck and both of you are trying to get through traffic in New York City. Maneuvering a skateboard is much easier." This is still true, but your skateboard will get you there faster and your movement will be swifter around obstacles only if you plan your course well and do everything to near perfection.
   
When you are marketing against a smaller regional chain, your battle may be much more difficult. You may not have the advantage of changing course faster than they do and you may not be able to market yourself as understanding the local playing field better than they can.

A final challenge that retailers now face in almost every part of the U.S. is increased competition with other independents. Ten years ago there may have been only a few coffee establishments in Columbus, Ohio, but today there may be dozens upon dozens.

There is no single magic bullet to success. However, no matter how formidable the competition, only hard work, a great location and savvy business practices will lead you to true success.

Two of our clients, who opened their business in an area with impressive competition, contacted us recently. The young couple, whose coffeehouse is less than 2,000 square feet and has been open three months, is averaging about $1,800 a day in sales during the week and over $3,000 on weekends. Their numbers are improving each month, and I speculate that they are not even close to reaching the top of their growth curve. During the next two years, if they continue to do what they have done since conception, they should see huge growth.

At our first meeting with these clients they told us they knew they would have an uphill battle for success, and that growth would require hard work. They knew their product, operational systems, marketing, layout and design, customer service and ambiance had to be better than that of their existing competition. They listened to professionals and actually heeded advice, which is almost unheard of today.

The year 2007 is a time in the life cycle of the U.S. specialty coffee industry where as an independent the only way to see growth and success is to manage your business as though your business life depends on it, because it does. To be successful, you must hire smart, train well, and maintain and monitor every aspect of your business. There is no doubt you must work harder and smarter, because even though the challenges are more formidable, there is still success to be had in the challenging retail specialty coffee market.

The "Bellissimo Single Origin and Freshly Roasted Podcast" is on the Air!

Click here to subscribe to the Bellissimo Podcast

The "Bellissimo Single Origin and Freshly Roasted Podcast" began airing in March of 2007 and is available to listeners via three of the company's websites, espresso101.com, coffeeschool.org and coffeeuniverse.com, in addition to the iTunes Music Store. The intent of the podcast is to educate listeners about current issues in the specialty coffee industry and to give retailers the information they need to compete in today's highly competitive market.

The premier podcast features a discussion between Bellissimo President Bruce Milletto and Bellissimo Senior Consultant Ed Arvidson on the evolution of the specialty coffee industry and the current role of the independent retailer. In the future, the podcast will call on many of the industry's leading experts, including David Griswold of Sustainable Harvest and Connie Blumhardt of Roast Magazine, to take part in lively discussions on issues as varied as fair trade, roasting and blending, and on-going operations. The podcast is produced by Jeremy Wilson of Conveyor Films in Portland.

"Since we began operations 15 years ago, it has been Bellissimo's goal to give entrepreneurs the information they need to be successful in this business. In fact, we coined the term 'coffee education,' said Milletto. "To further this mission, I am constantly trying to figure out new ways to get information out to those who need it. Podcasting is an obvious answer. Not only will our podcast be educational, but we hope people find it entertaining as well."