Second Cup Limited

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Transcript of Second Cup Limited

  • 1.Second Cup Limited
    The Second Cup is Canadaslargest Canadian based franchisor of specialty coffee cafes.

2. Beginnings
The Second Cup started in 1975 as a small kiosk in a Toronto shopping mall
Original business partners were Tom Culligan and Frank ODea
Specialized in only selling whole bean coffee
3. Growth
The Second Cup was sold in 1988 to Michael Bregman after being built to a 150 store chain.
Second Cup goes public in 1993
Sold to Cara Operations then to Dinecorp Hospitality Inc.
Expanded successfully tointernational markets including:
United States, Saudi Arabia, Cyprus and Syria
4. Leadership
Chief Executive Officer
Stacey Mowbray, a veteran of Cara Food Services,has been CEO since 2008
Title: Stacey Mowbray
5. Products
The Second Cup has many different drinks including:
Fresh ground coffees
Assorted Lattes
Teas, Espressos, Specialties and Chillers
6. Marketing
Under direction of CEO Stacey Mowbray Second Cup recently doubled advertising budget focuses on:
Increased coffee quality
Environment and Social Certification
In house Coffee Experts
Increasing store sizes
More drive thrus!
7. Demand for Coffee
81% of Canadians drink coffee occasionally
63% of Canadians drink coffee on daily basis
Coffee is more popular in Canada than in the U.S. at 49% daily drinkers
8. Production and Productivity
Coffee is sourced thru contracts with other firms
Nestle is a major supplier
Liquid coffee sales account for 40%
Whole Bean Coffee account for 25%
Owner/Operators are encouraged by the company
Parent Company assists franchisee services
Selects locations
Provides marketing plans
Product development
Public Relations
9. Pricing
A300 ml cup of coffee costs $1.60 (including tax) and prices go up from that point
Premium drinks start at $3.00for the same volume
10. Significant Fixed and Variable Costs
Fixed Costs faced by Second Cup Franchisees include:
Variable Costs include:
Arrabica Coffee Bean Prices
11. Company Profits and Profit Margins
12. Competition
Coffee cafes are a Monopolistic Competitive Industry
Second Cups largest competitor is Starbucks
In ten years:
Starbucks has opened over 800 stores in Canada
Second Cup has closed over 50 stores
Tim Horton's, McDonalds and Seattles Best are other major competitors
The Second Cups competitive advantage is:
Using ethically and socially responsible products
Customers Trust
13. Summary
The Second Cup has had continuing success in the Specialty Coffee Cafe Market
They have stayed true to traditional coffee making methods
Stores have coffee experts delivering customer service
Weak Marketing Strategy
No counter to Starbucks aggressive expansion and market share dominance
The Second Cups new five year plan will boost customer loyalties and perceptions of their brand and return it to its former spot as Canada's #1 specialty coffee cafe
14. References