BIGGBY COFFEE believes that drinking coffee should always be fun. “When we set out in 1995 with our first location – which was pretty early in the specialty coffee industry – we started off with this idea of serving coffee in a fun and unintimidating manner,” co-founder and CEO Bob Fish recalls. “We didn’t like the whole Euro-chic component of specialty coffee at that time. BIGGBY COFFEE is really unassuming.”
Fish attributes the company’s 20 years of success to its culture. “Our cultural values have five points: B happy, have fun, make friends, love people and drink great coffee,” he says. That philosophy starts at the home office and is echoed in the company’s stores.
“Everything centers around this idea of being happy and having fun,” Fish points out. “When you enter one of our locations, you’ll find the colors are brighter, the music is louder and the service is personally engaging. All of that infuses into the culture of our company.”
The music chosen to be played in the stores reinforces that cheeriness. “It changes all the time, but it is standard at all locations,” Fish says. “It only has to fulfill two criteria: that it’s happy and fun. We put 30 people in a room and we play a track and ask people to stand on one side if they like it. The criteria is not genre – it could be classical, jazz, pop – it could be anything, but it ends up being fun and happy.”
Fun is also evidenced in the names of the company’s drinks. “If you dive a little deeper into the names of our drinks, the No. 1-selling drink is the Caramel Marvel,” Fish says. “It sounds like a superhero. It’s not a caramel macchiato, which is that affected, Italianized version. Our No. 2-selling drink is called the Teddy Bear. It’s a ridiculous name to name a drink, except when you order it, you always have to smile. Some men have a little trouble ordering it, but if they call it a Grizzly Bear, they can get the same thing.”
New drinks are always being created. “Like any business, our company is in perpetual development of new ideas and taking advantage of new trends,” Fish says. “We introduce new drinks every 60 days.” Right now, the new drink is a Salted Caramel latte, and during the next 60-day period, the new drink will be a Butterscotch Mocha latte that has crushed Butterfinger candy toppings. Some of these drinks are incorporated into the regular menu after their 60-day period. “Some get absorbed, some don’t,” Fish says. “We review menu boards for any changes that would go live every May and September.”
Asked to characterize the flavor of BIGGBY coffee, Fish refers to its degree of roast. “I refer to our roast profile as a Scandinavian profile, which is somewhere between dark medium and medium dark,” Fish says. “So we’re not in that dark, dark family. I think the interesting fact on that is the country or countries that have the highest per capita coffee consumption are Norway, Finland, Iceland, Sweden and Denmark, and we roast our coffee in that particular fashion.”
BIGGBY COFFEE does not offer a wide variety of food choices. “We’re highly focused on the core business,” Fish emphasizes. “We’re minimal on food, but our most popular item is called the Bragel. It’s a savory product that involves a bagel, cream cheese, lunchmeat and a slice of cheese. We sell an extraordinary amount of them. The reason we sell so many is that we have a high emphasis on sweet and creamy drinks and Bragels fall into that sort of savory category. Sixty-two percent of our revenue comes from the sweet and creamy category, and when you buy food, it’s more likely you’d be interested in a savory rather than sweet item. That is why our Bragel does so well.” One Bragel recipe calls for turkey, Havarti and cream cheese on an everything bagel.
Many of BIGGBY COFFEE’s iconic drinks – such as the Caramel Marvel, White Lightning, and Creme Freeze smoothies – use ingredients from Phillips Syrups. “Phillips has always done a really good job of translating our feedback on what it is we want from a sauce or expect from a drink,” BIGGBY COFFEE Director of Operations Jeremy Deruiter declares. “Because of Phillips’ attention to detail, they deliver a final product that hits that bullseye when it comes to our expectations. They are also proactive partners. They don’t just wait on us to see what we need, but also actively look for innovative things they can bring to us that will bring customer business.”
Build Your Own
The emphasis on sweet drinks is an evolving trend that Fish has observed. “Our millennials are the fastest-growing segment – about 22 percent right now – and they love sweet drinks,” he says. “They also love to craft or build their own drinks. We have a high emphasis in our world and our system on building your own beverage. Our menu board is pretty standard for the most part, but we have this thick book behind the counter of all kinds of ‘inside drinks’ that BIGGBY has.
“Once you’ve been around the block a couple times with BIGGBY, you tend to pick up on these particular drinks,” he reveals. “Everybody has got their mochas and caramels, but these are really unique drinks with unique names. We run a drink of the day every day, and those come out of those special menu books, the behind-the-counter book, and people fall in love with those particular drinks.” Some favorites include the Purple Haze, Latte of Joy, Fluffy Clouds, Wild Zebra and the Tan Line. Customers can request their favorite special drinks every day, even though they aren’t seen on the menu boards.
Another way that drinks can be personalized for customers is whether the drink is served hot, iced or frozen. “Millennials generally prefer their drinks either iced or frozen,” Fish remarks. “So every one of our beverages – if you order something like the Caramel Marvel – we ask if you want it hot, iced or frozen. We can make it all three ways, and virtually every drink on our menu boards can be made hot, iced or frozen. That’s just another way to customize your drink. People love that.”
One of the distinguishing characteristics of BIGGBY COFFEE is the importance of franchisees. “We are a company that is 100 percent franchised,” Fish stresses. “We have 187 locations open and another 54 under development that will open within the next year. The real advantage is that a coffee shop run by an owner/operator is a lot different than a coffee shop run by a manager. I think in today’s world people like to know where their money is going. With us, the people are local.
“If you look at a typical foodservice establishment, somebody goes to it maybe once a week,” Fish says. “Our average number of visits is 3.5 per week. Because of that, we’re seeing our customers enough that we know their names and kids’ names. When we’re in a marketplace, that BIGGBY franchisee is highly embedded in that community. There is a tendency of those stores to have a high degree of community investment in schools, churches and chambers of commerce.”
BIGGBY COFFEE seeks franchisees who can carry forward the corporate mandate to have fun and make friends. “We look for people that love coffee, want to build wealth and have energy, excitement and enthusiasm,” Fish says. “We’ve got people that have never been in business before and have never owned a café before. We teach them everything they need to know. Everybody that opens a franchise must operate their first store. Our largest operator today has 27 locations and will have 30 at the end of the year. He’s not independently wealthy, and he had no background in coffee. It’s really remarkable. Today, he is running a business around $13 or $14 million a year.”
The company prefers to open stores that are clustered around a particular location to centralize distribution through its third-party network and so the stores can combine their marketing efforts. The highest density of BIGGBY COFFEE locations is one store for every 9,000 people in the mid-Michigan area around Lansing. “As we go to marketplaces and continue to expand, we believe in that kind of density,” Fish says. Additional locations are in Indiana, Ohio, Illinois, Kentucky, South Carolina, Wisconsin, Florida and Texas.
Clusters of BIGGBY COFFEE locations frequently are under the same ownership. “People that enter our system tend to grow,” Fish asserts. “Of the franchise locations that we sell in one year, 60 percent come from inside the company, meaning they already own franchises. The beautiful thing about that is that people don’t sign up for more franchise locations if things are going bad – they do it because things are going good.”
When seeking locations, BIGGBY COFFEE tends to build new. Approximately 55 percent of the company’s in-line locations are at the end cap.
Keeping customers happy is the job of the employees behind the counter at BIGGBY COFFEE, and as part of the franchise fee, managers and staff receive highly formalized training. “Managers come to the home office for two weeks of classroom training, and then they go out and do 180 hours of on-the-job training in another franchising store,” Fish explains. “When they get to opening their store, our trainer comes in and trains their staff. Training is ongoing through the lifecycle of a franchise.”
Additional corporate support includes in-house graphic design, public relations, fulfillment on marketing materials, point-of-sale software development and secret shopping. Help with marketing includes regional franchisee marketing meetings every 60 days, training seminars and monthly visits by corporate operations people.
“We do retail and back-of-house inspections,” Fish says. “Additionally, we have a highly developed Internet system, so all our operators are connected with us online internally. That allows us to look at numbers and do comparisons that are supportive.”
BIGGBY COFFEE splits its marketing expenditures among several media. “About 45 percent of our marketing dollars go into outdoor advertising,” Fish says. “We also do television, which takes up another one-third, and the balance goes to electronic and social media.” Television buys are for morning and evening network news programs, which Fish thinks people tend to watch live rather than time-delay.
“Our company will cross the $100 million mark in annual revenue in about October,” Fish forecasts. “We’re doubling about every five years. We’re going to continue to grow right now. We’ve been growing at a rate of about 16.5 percent every year for the last several years. I see no reason for that to change. We have very aggressive growth, and we do that by keeping things fresh and innovative.”