“We’re at an advantage that we’re still small,” Tattersfield says. “Starbucks, when you include their licensed business, is over 15,000 stores, and in the U.S., our licensed business is 500.” The company’s manageable size affords it the ability to refocus on the details that get customers to start and then continue choosing Caribou over an increasing number of fast food coffee offerings. The strategy is key, Tattersfield says, in increasing Caribou’s average unit performance.
“We’re focused on doing what Caribou needs to do,” Tattersfield says. “Our aspiration is: How do we build $1 million coffeehouses?”
A Menu Jolt
Tattersfield’s extensive experience serving various customers—he’s worked at Yum! Brands, Limited Brands, and most recently lululemon athletica—have taught him what consumers respond to.
“Ultimately, it’s the quality that wins over time,” he says. “An exceptional focus on quality, whether it’s the experience or product, will resonate with customers.”
So at every point in the Caribou experience, Tattersfield has taken the approach of being “extremely passionate about a lot of the nuances.”
“More important than anything is: How does it positively impact the brand experience in the store?” he says. “If it’s easier for them to read the menuboards, it’s easier for them to understand how we’re looking at categories, [and] it helps them in their experience.”
Another important part of improving the in-store experience involved making every item on those menuboards as high-quality as the coffee.
“If we continued to be on the path that we were on, eventually we would cause a conflict for a lot of our customers,” he says. “They might really want our coffee or our beverages, but pass on our food and might make another decision that was more convenient for them.”
The first product platform launched under this new philosophy was a line of chocolate beverages introduced in late 2009.
“Mochas aren’t new to the industry, but … we believe we’re delivering the best hand-crafted mocha experience in the country,” Tattersfield says. “We brought real melted chocolate into our businesses, versus what we used to use, which was a cocoa powder.”
Caribou took the same approach when it introduced high-quality, customizable oatmeal options in January.
“We’re really addressing opportunities for different dayparts and new customers that we might not normally attract,” Tattersfield says.
A tea customer, for example, is very different from a coffee customer—which is why the company recently unveiled a new line of tea latte fusions.
The brand is also piloting two new platforms: fresh menu items baked in-store and breakfast sandwiches. If Caribou’s breakfast offerings perform well, menu items for lunch and dinner could be in its future.
“We can see that the platforms are resonating with our customers, so we’ll also continue on line extensions along those platforms,” Tattersfield says. “We believe that if we can plug in these platforms and build on them, we can fundamentally change the economics of our business.”