by Matthew Stein | April 14, 2015
In case you just started to track trends in the coffee business, consumers are ditching “non-gourmet” coffee (think Folgers, Maxwell House and Sanka– remember those?!) in favor of specialty coffee. These specialty “gourmet” drinks include espresso-based beverages, regular coffee made with “gourmet” beans and any arabica coffee products (pods included). But what we’re seeing even more of in the upcoming year is this trend continuing across all types of edible/drinkable consumer products. Nick Bayer, President & CEO of Saxbys Coffee, one of MSC Retail’s favorite clients, tells us we’re “seeing a push toward more transparency in all food and beverage markets.” Saxbys is at the forefront of embracing the supply-side of this trend with new all-natural seasonal speciality drinks such as their Pumpkin Spice Latte and Milk & Honey Coldbrew.
“We’re excited to unveil more all-natural products in the coming year,” said Nick of their menu’s evolvement. With all natural, local ingredients at the center of many of this past year’s food and beverage trends, it’s no surprise this trend is unfolding in the coffee market as well. Think of the baristas at Saxbys more like high-end mixologists making you a well-crafted Manhattan vs. your neighborhood bartender cracking open a Budweiser.
Today’s consumers are more educated about coffee than ever before and are enjoying custom blends of beans and ornate lattes and espresso drinks. What does this mean for coffee shops? It means that coffee houses are not producing as much mass-produced drip, but custom, specialized drinks designed to attract these sophisticated consumers.
Aside from the trends in the product itself, we asked Nick what his thoughts were on Philadelphia’s coffee market. “Philadelphia is on a meteoric rise this year, which is a boon for the coffee shop and cafe market,” he says. Currently slated to open two brand new Philadelphia cafes within the next few months, Saxbys is also revamping their location at the University of Pennsylvania and 30th Street Station. Saxbys has also “had a wealth of opportunities to open cafes on college campuses, which is the perfect market for [Saxbys].”
So, what is it about coffee shops and college campuses (aside from the obvious need from students for a caffeine fix)? “Students need a place to study, host meetings and (obviously) caffeinate for exams… this millennial generation of students is looking for brands that it can be passionate about and take ownership of,” Nick said.
As the Vice President & Director of MSC University, I can tell you that coffee shops are a super important and critical component of any neighborhood. When we evaluate collegiate retail environments, we find the consumers are more and more sophisticated and looking for authentic experiences. They want to hangout in spaces that are designed to meet the aesthetic of their lifestyle. “Third-place” physical environments are few and far between on college campuses and, more and more, we are seeing coffee shops serving this purpose (the caffeine doesn’t hurt, either). What is critical to a successful college coffee house, in our experience, is one that embraces the fast-paced (throughput is key), diverse palated (most students are NOT coffee connoisseurs) and experience craving student population.
Locally, we have a lot of great coffee shops in Philadelphia. Newcomers, Elixr and Ultimo are two of my favorite “boutique” roasters in my neighborhood. Another group that has an incredible national presence (even their own TV show about the adventures of sourcing their beans) is La Colombe. Most of us in the office drink about as much caffeine as our hearts can handle in a given day (how else do you think we out-work our competition?!) and Brandon Fox, MSC Retail Guru for Emerging Neighborhoods, commented on La Colombe’s Fishtown location by calling it the epitome of an experiential coffee shop. “Because it’s their corporate headquarters, it allowed them to have a footprint significantly larger than a typical coffee shop. In turn, this allows them to be much more than just a coffee shop or cafe; they have an incredible food program that they cook on site, there is a team sourcing beans on the floor above you, you can see them baking your bread from your seat, and (my favorite part) they even serve bourbon,” said Brandon.
Coffee is more than just a method for getting your caffeine fix – coffee cafes are continually evolving and getting creative with new drinks, well-crafted spaces, and cool concepts. We are excited to see the maturation of coffee houses and the social impact it is having in our city.