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.