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Coffee chains and the Third Wave scene: The end of the cookie cutter?

From the September 2011 issue.

Ahead of this year’s European Coffee Symposium, Allegra Strategies’ Managing Director Jeffrey Young speaks to GCR on how the big names are maintaining their place in a changing market.

Jeffrey Young Allegra Strategies Managing DirectorIt wasn’t too long ago that a coffee chain’s strategy in setting up a new store was relatively straightforward. Come up with a winning store design and replicate it in as many prime real estate positions as you can – wherever the market is right. It’s what Jeffrey Young describes as the “cookie-cutter” approach to franchising and for years the public could walk into any Starbucks, Costa Coffee or CBTL around the world and know exactly what to expect.

“Essentially, they were replicating the same experience,” explains Young. “The whole marketplace became a land grab for sites to put up stores. The public started thinking it was trendy to be walking around with a cup of coffee and it became even cooler to be holding a brand like Starbucks.”

These days, you’ll be hard-pressed to find someone walking around with a Starbucks labelled coffee in London. Not because of a lack of interest, but because earlier this year, the company took the name off its corporate logo. Walk into a few of the company’s new locations in London and you may even struggle to recognise the café as a Starbucks. The design of new Starbucks locations are borrowing from their surrounding environment, taking on the feeling of local neighbourhoods.

Starbucks, it would seem, has been moving away from the cookie-cutter, heavily branded approach. As Young explains, in many markets the days of the branded café are numbered. Recent developments in the coffee industry have seen the rising popularity of independent cafés. Coffee has emerged as more than just a morning beverage hit, but a careful craft where the barista is king.

“What we’re seeing is that coffee is starting to become more personal,” says Young. “Whereas before we just got our coffee from someone working at the café, baristas are now proud to call themselves baristas.”

The movement towards independent, specialty coffee is most commonly known throughout the industry as the third wave scene. The first wave saw coffee as no more than a morning caffeine kick and the second wave welcomed major brands that elevated the status of coffee as a beverage to be appreciated. The third wave, however, is following larger Western societal trends of moving away from big brand names, to reconnect with personal craftsmanship.

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