Second Cup Limited


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Second Cup Limited

  1. 1. Second Cup Limited<br />The Second Cup is Canada’s largest Canadian based franchisor of specialty coffee cafes.<br /><br />
  2. 2. Beginnings <br />The Second Cup started in 1975 as a small kiosk in a Toronto shopping mall<br />Original business partners were Tom Culligan and Frank O’Dea<br />Specialized in only selling whole bean coffee<br /><br />
  3. 3. Growth<br />The Second Cup was sold in 1988 to Michael Bregman after being built to a 150 store chain.<br />Second Cup goes public in 1993<br />Sold to Cara Operations then to Dinecorp Hospitality Inc.<br />Expanded successfully to international markets including:<br />United States, Saudi Arabia, Cyprus and Syria<br /><br />
  4. 4. Leadership<br />Chief Executive Officer<br />Stacey Mowbray, a veteran of Cara Food Services, has been CEO since 2008<br />Title: Stacey Mowbray<br /><br />
  5. 5. Products<br />The Second Cup has many different drinks including:<br />Fresh ground coffees<br />Assorted Lattes<br />Teas, Espressos, Specialties and Chillers<br /><br />
  6. 6. Marketing<br /> Under direction of CEO Stacey Mowbray Second Cup recently doubled advertising budget focuses on:<br />Increased coffee quality<br />Environment and Social Certification<br />In house “Coffee Experts”<br />Increasing store sizes<br />More drive thrus!<br />
  7. 7. Demand for Coffee<br />81% of Canadians drink coffee occasionally<br />63% of Canadians drink coffee on daily basis<br />Coffee is more popular in Canada than in the U.S. at 49% daily drinkers<br />
  8. 8. Production and Productivity<br />Coffee is sourced thru contracts with other firms<br />Nestle is a major supplier<br />Liquid coffee sales account for 40% <br />Whole Bean Coffee account for 25%<br />Owner/Operators are encouraged by the company<br />Parent Company assists franchisee services<br />Selects locations<br />Provides marketing plans<br />Promotion <br />Product development<br />Public Relations<br /><br />
  9. 9. Pricing<br />A 300 ml cup of coffee costs $1.60 (including tax) and prices go up from that point<br />Premium drinks start at $3.00 for the same volume <br />
  10. 10. Significant Fixed and Variable Costs<br />Fixed Costs faced by Second Cup Franchisees include:<br />Rent<br />Utilities<br />Labour<br />Variable Costs include:<br />Arrabica Coffee Bean Prices<br />
  11. 11. Company Profits and Profit Margins<br /><br />
  12. 12. Competition<br />Coffee cafes are a Monopolistic Competitive Industry<br />Second Cup’s largest competitor is Starbucks<br />In ten years:<br />Starbucks has opened over 800 stores in Canada<br />Second Cup has closed over 50 stores<br />Tim Horton's, McDonalds and Seattles Best are other major competitors<br />The Second Cup’s competitive advantage is:<br />Using ethically and socially responsible products<br /> Customers Trust<br />
  13. 13. Summary<br />The Second Cup has had continuing success in the Specialty Coffee Cafe Market <br />Strengths:<br />They have stayed true to traditional coffee making methods <br />Stores have coffee experts delivering customer service<br />Weaknesses <br />Weak Marketing Strategy<br />No counter to Starbucks aggressive expansion and market share dominance<br />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<br />
  14. 14. References<br /><br /><br /><br /><br /><br /><br />