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Convenience Coffee Coffee drive-throughs, carts and kiosks make the coffee purchase even easier for customers, but running a condensed coffeehouse isn't as easy as it looks.by Karen L. Wagner They became
popular on the West Coast, but now coffee drive-throughs, along
with their compact counterparts, kiosks and carts, are popping up
all over as the country's coffee-craze continues full steam ahead.
The trend reflects the coffee industry's efforts to satisfy expectations
of an increasingly on-the-go society. Photo courtesy of Bridge Industries/Drive-Thru Solutions In contrast to their corner coffeehouse counterparts, drive-throughs attract the commuter on the way to the office or the mom/chauffeur who has to drop Billy off at soccer practice at 3:30 p.m. More often than not, this particular clientele would pass right by a sit-down coffee bar because they don't have time to actually park and get out of their cars. Kiosks and carts generally serve foot traffic that most likely wouldn't have another nearby source of a quality cup of coffee. They can be put in locales where there isn't enough room for a full-scale coffee shop or where it isn't financially feasible. These mobile operations are a good way for those thinking about entering the business to test the waters without having to dive fully into a full-service coffeehouse. Kiosks, and carts even more so, offer the advantage of starting up a coffee business for sometimes less than half of what it takes to start up a drive-through. Unlike a drive-through or sit down place, they can also be more easily moved should a location prove to be terrible. Nevertheless, whether it's a drive-through, kiosk or cart business, success doesn't come easily but depends upon round-the-clock dedication, not to mention a solid financial investment. Expect to Spend "I see lots of people trying to get into the drive-up coffee business for $15,000," says businessman Roy Snowden, president of Emerald Coast Manufacturing, Inc., which builds drive-up kiosks and is based in Mary Esther, Fla. But for a quality
operation where success is the goal, "A person can expect to
spend between $60,000 and $100,000 per location," says Snowden,
who also co-owns a chain of three coffee drive-throughs in the Florida
Panhandle and hopes to open an additional five stores this year.
That includes everything from the building and attractive signage
to the proper stripes painted in the parking lot. Emerald Coast's self-contained Kiosk II unit is available in two sizes: 8-feet by 8-feet or 8-feet by 12-feet. While those figures may seem high to some, Snowden believes the return on investment can be great because the market is wide open in many major markets across the country. "There really isn't any competition in the drive-up coffee business," says Snowden. Carts require less start-up costs, but a good location can be a moneymaker. Ashley and Matt McCauley, partners in Straight From Seattle Espresso, Inc., have 12 espresso cart locations in the Baltimore and Washington, D.C., areas. Their best location brought in $600,000 last year, Ashley says, which is not bad for a 6-foot cart. Ashley figures that start-up costs for such an espresso cart would be about $30,000. "It can be done for less. We've done it for less because we've made relationships with manufacturers," she explains. Nonetheless, for a first venture, Ashley says the $30,000 would be enough to cover equipment costs, plus a little extra to act as a buffer for unexpected expenses such as needed backup equipment, licensing fees and even advertising expenses. "You've got to leave some room for that," she says. According to
manufacturer Robert Burgess, president of Burgess Enterprises Inc.,
Seattle, a kiosk or cart offers several advantages over a café
or even a drive-through. First, the capital investment is less.
While a kiosk may cost anywhere from $18,000 to $60,000 and cart
from $16,000 to $21,000, the minimum start-up cost of a café
is $100,000, and $300,000-plus is more likely, Burgess says. All boxed up ... arriving for service in front of Johns Hopkins University's Milton S. Eisenhower Library, Ashley and Matt McCauley's library cart generates between $500,000 and $600,000 in annual sales. "You could open up three kiosks for the price of one café," points out Burgess. In addition, because kiosks and carts are not considered buildings, the health code requirements are a lot less complicated and less costly. "There's a whole lot of places to put carts," he adds. Add On, Make More Even existing locations and coffeehouse start-ups are including drive-through options as an additional revenue source. Before Hillary Rinehardt and her husband, John, both lawyers, opened Aspen Bread and Bagel, a coffee/bagel/bread shop in Mansfield, Ohio, neither had experience in the restaurant industry. Their research consisted of scoping out the competition, mainly Panera Bread, the St. Louis-based coffee/deli/bakery chain. The Rinehardts liked the coffee drink selection and diversified menu. "But we thought the one thing it was lacking was a drive-through," Hillary says. Hillary considered all the times when, whether she was in the car with her three children or just didn't feel like getting out of the car, she would have stopped for a coffee drink if the coffeehouse had a drive-through. "And so we thought that would be a good idea for our store," she says. "Actually, about a little over 30 percent of the business does come through the drive-through." While at first John was skeptical of the drive-through concept, believing that people wouldn't mind getting out of their cars, he now thinks it was a terrific idea, Hillary says. "And if we ever do another store, that's like the first thing we have to make sure (of) on the location it's really an integral part of our business," she says. Keys to Success Whether a drive-through, cart or kiosk, the critical areas of embarking upon a mobile coffee operation, aside from securing financing, are: location, permitting/health department issues, and business acumen. "All of these businesses are very crucial on location," says Michael Myers, president of Michaelo Espresso, Inc., a Seattle-based custom manufacturer of espresso carts and kiosks. While drive-through buildings and to a lesser extent kiosks can't be easily moved, experimenting with the location of a cart is a possibility because a cart is more flexible. "If it's not a great location, you can go somewhere else," Myers says. Kiosks and carts are ideally suited for lobbies of hospitals, universities, office buildings, etc. Carts, which are self contained with their own water supply and generator for electricity, can serve temporary venues, such as county fairs or flea markets.
Drive-throughs, of course, require a high traffic count. Whether it's close to a residential area for a source of morning commuters or in a strip mall with a large anchor store that has customers coming and going at all times, the location needs to be not only where people are, but where they are more apt to stop. For instance, a traffic count may be high in one area, but if in the morning traffic is flowing in the opposite direction across from the drive-through, commuters aren't going to stop. Some drive-through and kiosk/cart manufacturers offer assistance in site selection, usually at an additional cost. But since location means the difference between success and failure, putting out additional expense to find a prime spot can be a wise investment. Expertise in dealing with health codes and local municipalities issues is imperative. In some towns and cities, permitting issues can be a major headache. "It is the most important aspect of the business," says Snowden of Emerald Coast. "Permitting is expensive." Health departments, for example, are concerned with safety and food contamination issues, while municipalities might be concerned that a drive-through would add too much congestion to an area or attract undesirable clientele. City halls have to be handled very carefully. Therefore, Snowden says, the more quality the operation, where plans are laid out in detail and buildings/equipment are shown to be first class, the more smoothly the permitting process will probably be. "You have to have a system that works," Snowden adds. A Passion for Coffee and Business Coffee entrepreneur Ron Salisbury says the drive-up coffee business can be lucrative, but it's not for the weak of heart. He warns that while mobile operations may be less costly than sit-down restaurants, multiple locations are required to make good money. With one location, "You're going to barely make a living," says Salisbury estimating that earnings with one location may range between $19,000 and $35,000. "That's why I'll never build another stand-alone," he says. Currently, Salisbury has seven locations of his Deaf Dog Coffee Company in Petaluma and Santa Rosa, Calif. Two are stand-alone coffee carts where customers drive up; five are sit-down stores that include drive-up carts. All of them are located in what Salisbury prefers to call neighborhood centers that have large supermarkets as anchors and are near residential areas. "Our drive-throughs are basically large espresso carts," he says. "At night our carts live inside the stores." The drive-up cart business, which operates mainly in the early morning, brings in about a third of his revenue, Salisbury says. "Some of my carts do $900 a day," he says. Still, Salisbury says multiple locations and sit-down options make for a well-rounded enterprise that can cater to the commuter as well as those who have to time to stop in and linger a while longer throughout the day. That's why, Salisbury says, it takes good business sense, not just a love of the bean, to make a multi-location operation succeed. Salisbury says that according to the Small Business Administration, about 80 percent of small businesses fail within their first few years of operation. "If you're passionate about coffee, you're going to be in that 80 percent," he says. "You have to be passionate about business." Sources There are a great number of drive-through, kiosk and cart manufacturers. Here's a sample:
Developed a turnkey Coffee Cart made with durable, lightweight fiberglass, a steel-welded frame and heavy-duty castors allowing the unit to roll easily. American Coffee Carts come in various designs and colors, and can be customized to meet individual needs. The popular "Stars and Stripes" model is red, white and blue, and is shaped like a Volkswagen bug.
Bridge Industries has ventured into the drive-through business with its new turnkey Drive-Thru Solutions package. The drive-through structures are offered in several configurations and the exterior face offers a multitude of decorator options.
www.burgessenterprises.net
Manufactures modular kiosks, carts and drive-throughs. Offers
custom-design options, plus site evaluation, technical support,
project management and installation, staff training, and assistance
with building a network of suppliers.
Manufactures "Espresso in a Box!" drive-throughs with custom-design options. The units are available with different roof designs, awning colors and other finish details.
Manufactures the Kiosk II, a drive-through espresso bar. Offers custom design options, plus assistance with site selection and technical support.
Licensing opportunities with a modular double drive-through building that comes fully equipped with UL-certified equipment for $59,900. Offers pre-packaged business plan.
Manufactures kiosks, carts and outfits drive-throughs. Offers custom-design options, staff training, managed maintenance program and business consulting.
Manufactures kiosks, carts and bars and converts vans and trailers to mobile espresso bars. Offers custom options and accessories.
Manufactures retail platforms configured as stationary or mobile carts, stands and kiosks. Carts available from stock or can be custom made to match site colors or themes like the cart shown below.
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Van San Corporation