Most licensees can increase their profits by offering hot drinks to their customers - but be sure to carefully assess the potential before taking the plunge. John Porter looks at the options available.
If the only time coffee is mentioned across your bar is in the context of strong and black as a hangover cure, then it's time to wake up and breathe in the aroma of freshly ground beans. You only have to glance down any high street to realise that coffee is now big business.
There are around 7,500 coffee shops in the UK, and the number is growing at more than 5 per cent a year.
Branded coffee bars, such as Costa Coffee and Starbucks, have about 20 per cent of the coffee bar market, and are rapidly increasing their market share.
Which in one sense is bad news for pubs - the idea of customers spending time and money lingering over a cappuccino and croissant in a coffee bar feels like a bit of a lost opportunity. However, there are still many more pubs than coffee bars, as well as an increasing number of customers who enjoy a decent cup of coffee - or tea - away from home.
Tim Martin, founder and chairman of JD Wetherspoon, believes that the growth of the coffee market creates new opportunities for pub operators. The Lloyds No 1 high street bar chain, which Wetherspoon bought from Wolverhampton & Dudley two years ago, has been targeted squarely at the market which Starbucks and Costa occupy. The number of Lloyds outlets is scheduled to grow from 20 to 50 this year.
The survey of publicans carried out for The Publican Newspaper Market Report 2001 found that tea and coffee are seen as being of increasing importance to business by 43 per cent of publicans - third behind soft drinks at 57 per cent and hot food at 49 per cent.
Alongside an increased consumer awareness of the different styles of coffee, longer opening hours and growing sales of pub food mean tea and coffee need to be part of your total drinks offer.
The important thing is to assess what your current level of hot drinks business is, and what potential there may be to increase it, and invest in a hot drinks offer appropriate to your business needs. Ensure that any suppliers you talk to are addressing your requirements.
The coffee trade has sometimes suffered from a poor reputation in the pub sector. This was in part due to a lack of understanding by suppliers who assumed that models developed for cafés, hotels and even workplace canteens could be applied to the pub sector, and in part the fault of publicans with unrealistic expectations of how much coffee they could sell.
Most of the major suppliers now have a much clearer understanding of the pub sector, with products and terms tailored accordingly. Nevertheless, if you have a clear idea of how much trade you think is realistic before you talk to a supplier, you will be in a stronger position to explain your needs.
There are basically four types of coffee on offer:
- Soluble - another word for instant coffee. There are dispensing systems available, although if you really only sell the occasional cup the old fashioned spoon-and-a-jar approach may still be your best bet. If you use a quality brand and your staff get the service and presentation right, only a real coffee aficionado may know the difference
- Cafetiere - the next step up from soluble for pubs with occasional or unpredictable coffee trade, allowing you to serve filter coffee to order.
- Pourover - heavy duty version of filter coffee systems, which allows hot water to drain into a jug through ground coffee. Good if you need to have a dozen cups ready at the same time, but the quality degrades the longer the coffee is left standing
- Bean-to-cup machines - these are an update of the espresso machine principle, which grind the coffee freshly and force hot water through at high speed. Increasingly designed to be easy-to-use and produce a range of different coffee styles at the touch of a button. You need to be sure the profits generated justify the initial investment.
Don't neglect tea, which is still just about holding its own against coffee as the nation's favourite drink, although it tends to be drunk more in the home than out. Surveys show that tea drinkers tend to be more fussy about having its served "properly" - ie, they way they like it. Suppliers can provide you with a range of speciality teas, including the increasingly popular fruit and herbal varieties.
Remember 98 per cent of tea and coffee is water, and unlike most other drinks you sell, it's coming straight out of your tap. Although generally safe, the main problems with tap water are taste, such as added chlorine, and sediment. In hard water areas, expensive equipment can be quickly damaged by scale. Effective water filtration should overcome these problems.
Buy, lease or borrow?
The profits on coffee can be high, anything up to 70 per cent a cup assuming you pick the right system for your needs. There are plenty of deals on offer, with many suppliers offering attractive leasing terms or even free equipment loan in return for a commitment to buy their coffee. Such a deal may suit your needs, but be sure that you are only contracted to buy the amount of coffee you can sell.
As we've said already, most coffee machines have become simpler to operate in recent years. One of the big objections the pub trade had to old-fashioned steam-and-whistle style espresso machines was that they required careful handling. Any member of staff who knew how to operate the coffee machine could command a high price for their services, and the outlet was in trouble if they left. Look for a deal that includes staff training, updated at regular intervals.
Most of the popular coffee styles use espresso as their base - so if you install the right machine, you're equipped to start offering a coffee menu. If you start adding everything from whipped cream to flavoured syrups, the variations are endless, but the basics are:
AmericanoA shot or two of espresso poured into a glass and filled with hot water. A standard black coffee.
CappuccinoA shot of espresso followed by half a cup of steamed milk and a big head of foamed milk. One-third espresso, one-third steamed milk, one-third frothed milk. For the authentic touch, sprinkle chocolate onto the froth.
EspressoA small, strong cup of coffee with a very strong aroma. Result of pushing hot water through finely-ground beans very quickly.
LatteA shot or two of espresso added to a cup filled with steamed milk and topped off with foamed milk.
MochaChocolate syrup on the bottom of the cup, topped with espresso, steamed milk, whipped cream and chocolate sprinkles.
RistrettoThe strongest espresso drink, made with half the amount of water but the same amount of coffee as a regular espresso
Top of the mornin' to ye. Let's not forget that coffee doesn't have to be an alternative to alcohol. Just in time for St Patrick's day, we proudly present the Your Business recipe for Irish coffee.
- 1 cup of coffee, fresh brewed
- 3 sugar cubes
- 1 measure of Irish whiskey
Pour the coffee into - well, a genuine Irish coffee class has a short stem and a round handle, but in a pinch you could use a large red wine glass or even a half-pint stemmed glass. Add the sugar and stir to dissolve. Add the whiskey and stir in. Top with cream and serve.