The Java Jive
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Seattle’s Best has a long way to go to catch up to Starbucks, which has more than 880 cafes across the country and has reaped an estimated $465 million in revenue in fiscal 1995. But growth has carried a tremendous price tag: of that $465 million, only $26 million was profit. Still, last year Starbucks’s profits were $3 million higher than Seattle’s Best’s total revenue.
Seattle’s Best has only 38 outlets nationwide, according to Severn, but that number is expected to grow to 50 by year’s end. There are 5,000 coffee shops nationwide, but Severn’s market research suggests that consumers could support more than 10,000 cafes by the year 2000.
Once Seattle’s Best opens more stores, it intends to step up its marketing and promotion activities. Starbucks is an aggressive sponsor of many charities, and Seattle’s Best plans to be visible in that arena also, says Severn. Seattle’s Best is using other tactics to steal customers: when it opened its newest store at 2951 N. Broadway, the first 100 customers got a free coffee mug, a coupon for a free coffee drink, and a card redeemable for another free coffee after a specified number of purchases.
