Three Foundations For Successfully Scaling Food And Beverage Companies
CEO of 787 Coffee. passionate about connecting humans to a fresh cup of coffee &…
CEO of 787 Coffee. passionate about connecting humans to a fresh cup of coffee & listed by Forbes as a “Top Entrepreneur”
Whether you sell burgers or bubble tea, at some point, you might consider expanding beyond one location. Running more than one location is a great way to reach a broader customer base, grow your profits and remain competitive.
However, scaling any business comes with unique challenges. As someone who runs a coffee shop with 19 locations (16 in New York City and three in Puerto Rico) and a taco restaurant with three locations in New York City, I’ve learned that there are three foundations for successfully scaling food and beverage companies.
1. Understand Your Distribution Channel
If you’re a business owner in the food and beverage industry looking to scale, I can’t emphasize enough how important it is to understand your distribution channel. Here are some crucial questions you need to be able to answer:
• Where are your target customers?
• How far from your hub do you want the new locations to be?
• Are the new locations you have in mind easy to travel to?
If you don’t understand your distribution channel, you risk making a bad business investment. For instance, you might end up with a second location that’s in a part of town that just doesn’t have a lot of foot traffic (meaning, fewer customers will stop by), or that’s in a location that’s hard to travel to (making it challenging for you to get your regular ingredients there).
I opened the first location of my coffee company, 787 Coffee, in New York City’s East Village. For us, that first location has been the pillar of growth. So when it came time to open other locations in the city, we didn’t want to look at any real estate that would take us far from our hub.
We wanted locations that would be strategically close to our flagship shop, so we could streamline our branding, reach various pockets of our target customers and efficiently distribute our ingredients. We knew that if one shop needed, say, extra sugar packets or creamer from another, we didn’t want that delivery to take a long time. We also evaluated our competitors and decided that any new locations we opened should be approximately a mile away from them. I used the same distribution channel philosophy when expanding my taco restaurant.
If you do want to scale in a way that’s not the most friendly to your current distribution channel, think through how you’ll work through those challenges. So, if you’re headquartered in, say, San Francisco and want to open a new location in Oakland, think about contingency plans if your deliveries from the main hub are stalled.
2. Give New Locations A Local Twist Without Losing Sight Of Your Brand’s Values And Hallmarks
When you’re scaling to a new location, it’s important to become a part of that new community. However, you should become a part of that new community while remaining true to your brand’s core identity.
So, let’s say you’re expanding your juice bar to a beach town. You should visit juice bars in that beach town, and also walk around and check out other places in the area to get a feel for the vibe. Then, you can add just the right touches to your new location that will give it that beachy feel in a way that’s authentic to the new area—and your brand.
At 787 Coffee, every shop has a few things in common, such as the same cups and ingredients. But, we tailor our decorations based on where exactly the shop is located. For example, we gave our Upper East Side location a more homey feel, complete with flower arrangements and games for kids, because that part of the city is more family-oriented. On the flip side, our East Village location has a hipster vibe, with graffiti and neon lights.
But while you customize your new locations, you shouldn’t lose sight of who you are. For example, if your mission is to serve organic juice, don’t offer customers in your new location a menu filled with non-organic options that use cheaper ingredients. In other words, stay true to your mission and the value and quality of your products. Scaling too fast and cutting corners on product quality will ultimately harm your business.
Of course, that doesn’t mean you can’t add special menu items by location or experiment with different ingredients. After all, there’s a reason why major restaurant brands like McDonald’s and Pizza Hut have different menus worldwide. What it does mean is that while experimenting and customizing your menu items, you shouldn’t go about it in a way that lowers the quality of whatever it is the customer orders.
3. Remain Customer-Obsessed
My mantra is that at any company—be it in the food and beverage industry or not—the customers are the owners, not the boss. Your company can’t run without your customers. If your customers enjoy your products and service, they’ll come back and even bring people they know with them!
As you open new locations, you should remain customer-obsessed—in whichever ways work best for your company. For us at 787 Coffee and Los Tacos NYC, two of the ways we stay customer-obsessed are with customer rewards programs and by reminding our employees on their pay stubs that customers are the people they should thank for their pay.
However, at every location you open, the baseline of being customer-obsessed is offering excellent customer service; be sure to train your employees on customer service best practices and remind them that your customers power the business. The other stuff (like rewards programs and special promotions) is the icing on top. Putting customers first no matter where you go next will get you started on a strong note, maximizing the chances of successfully scaling your business.
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