Happy New Year! Higher Prices!

It seems every new year brings price hikes from product manufacturers and indications are this year is no different. We're all still reeling from the knee-buckling period from June 2010 to June 2011 when coffee prices climbed like a Sherpa up Everest. Thankfully, coffee prices have stabilized the last several months. Now it seems that syrup, frappe and smoothie manufacturers are planning their annual Christmas gift of price increase to all of us. I can't explain why this is the case. Oil prices, which affect everything, have been fairly stable and even sunk a little the last several months. I don't know enough about the sugar, dairy and cocoa markets to speak with authority but rising costs in these areas are the usual culprits of price increases.

I'll post updates on this subject as they become available. The question is how should a retailer respond. Many of you have updated your menus recently with increased drink pricing after absorbing a year's worth of product price increases on your end. For now, I recommend a wait and see approach. If the cumulative effect of ingredient costs is significant enough I would consider another revision of drink costs, as difficult as that might be.

Service Creates a Smile

On the way back from Santa Barbara on Friday evening the wife and I stopped at Root 246 in Solvang for a late dinner. We chose it primarily because it was the only restaurant in the area still taking people for dinner after 9PM but we had been once before and knew it was an excellent restaurant. I noticed one key technique employed by the staff that I think is relevant to cafe owners and employees.

After we were seated a member of the wait staff approached our table to give us bread. Now we are all used to the common restaurant experience where a pimply-faced kid impersonally drops a basket of bread at your table and sloshes water into glasses.  The experience at Root 246 was slightly but significantly different. A polite gentleman approached our table with a basket and a pair of tongs. As he grabbed a bread product and laid it on our bread plates (the wife first, naturally) he announced what the item was.
"Blue corn muffin."
There was a pageantry to the simple act of bringing bread to the table that was profound. Not only did it makes us feel taken care of and valued, it made us truly appreciate what we were being given and respect the food. (Perhaps it was psychosomatic but the bread and muffin tasted terrific.)

We sat in these hip chairs and experienced memorable service and food.

I think this model relates to the cafe very significantly. Part of a good cafe experience for the customer is the positive feelings generated when a drink is hand crafted for you. Your mindset about the drink is completely different than it would be about something pulled from a spout and impersonally shoved across the counter (or worse yet, an empty cup thrust at you - "coffee is over there!"). Perhaps this is part of the reason why espresso drinks have done so well for so many years despite their price points at three times the level of traditional drip coffee. There is something transcendental about a drink being custom made for you. Perhaps also this is why a hand-crafted cup of pour over coffee can command a price point equivalent to a medium vanilla latte. It's not only the quality, it's the psychological boost a customer gets from having something made just for them, on the spot by a human being a few feet away from them. 

My conclusions that I offer to shop owners for consideration are:

• Look for opportunities for your staff to provide this kind of personal service to your customers with whatever you offer. It generates customer loyalty and also demand for your premium products.
• A pour-over coffee program is a natural step for any cafe that is in the top tier cafe category. It's  high-quality and hand-crafted just like espresso drinks.

And if you are looking for an excellent restaurant in the south Central Coast, Root 246 will not disappoint.

Fit Drinks - Plan Your Strategy for the New Year Now

I received a promotional post card and a promotional email from Big Train today announcing their new "Fit Frappe" line of powders. Besides being impressed with their German train-like marketing execution I was also impressed with their recommendation to start planning the marketing of so-called healthy beverages a full month before new year's resolutions hit. They are correct, the time to think about a healthy drink program is now, not January 2.

Every new year the weight loss phenomenon hits and every year many shop owners don't fully capitalize on it. Bringing on a few new products may be necessary but often shops can market low calorie or low sugar or low carb offerings with ingredients they already have on their shelves. Sugar free syrups and sauces (especially sugar free chocolate sauce), 100% fruit smoothies with no added sugar, green teas, yerba mate, rice milk and protein powder come to mind.

As far as Big Train's new products specifically - they appear to essentially be their No Sugar Added frappes with protein added. They are low in sugar but high in sugar alcohols, preventing them from being a true sugar free product. I don't expect these to take off, mostly because they are just a variation on an existing frappe and someone who really wants a protein blast will probably get it somewhere else. However, their overall marketing strategy is a good idea.

Add protein and it's a "Fit Frappe"

Bottom line (no pun intended), I recommend all shop owners start working now on a "Healthy Drink" marketing plan that kicks off to your customers January 1 (no need to spoil their holiday spirit before then). The size and scope depends on your shop but at least do something. Feel free to create a program based on your understanding of healthy. Just because a company tells you something is a healthy product doesn't mean you have to agree. Personally, I wouldn't put "sugar alcohols" on my list of products I want to consume more of in 2012 for a healthier me.

I will compile a list of health oriented products we carry along with some other food ideas you might find interesting - just let me know if you want a copy e-mailed to you..