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Second Cup Limited


Business E-Profile

Business E-Profile

Published in Technology , Business
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  • 1. Second Cup Limited
    The Second Cup is Canada’s largest 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 O’Dea
    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 to international 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
    A 300 ml cup of coffee costs $1.60 (including tax) and prices go up from that point
    Premium drinks start at $3.00 for 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 Cup’s 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 Cup’s 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 Cup’s 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