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18 March 2004

 
Second Cup sets its sights on Asia 

Second Cup, Canada’s leading speciality coffee retail chain, is planning to bring its business to Asia.

“China will be our beachhead into Asia,” Alton McEwen, CEO of Second Cup Ltd told Retail Asia in an interview at the group’s head office in Mississauga, Ontario.

Established in 1975, Second Cup is a wholly owned subsidiary of Cara Operations Ltd, one of Canada’s largest conglomerates with businesses in branded restaurant concepts, airline, foodservice and catering operations. Today, Second Cup has some 400 stores primarily as franchised operations in Canada.

“We made decision to expand internationally in November 2000,” said McEwen, adding that company plans to become a major marketer and franchiser of speciality coffee retail systems worldwide over the next five years.

He said that there is “a high level of interest” in the coffee retail business in China. This, combined with the potential size of the market and the fact that it is a market in the early stages of development makes China a good point of entry for the group into Asia.

“If we find the right partner in China, Shanghai specifically, we will launch in six months,” he added.

McEwen said other priority markets for Second Cup in the near term include South Korea, India, Australia, Taiwan, Hong Kong, Singapore, Malaysia, Indonesia and the Philippines. He is also looking into Greece, Spain, Portugal, Ireland, Mexico, Chile and Brazil. It may also consider co-branding with complementary businesses such as bakeries.

Second Cup appeals to a broader dimension of customers with a broader offering in terms of style of roast, blend, and beverage recipe, he pointed out. The company, which has a central roasting facility in Toronto sources beans from some 15 countries through growers, farmers and processors.

“Also, we offer a service that is very fast – in excess of eight people per minute. In high traffic areas this is essential,” said Michael D Kinsella, Second Cup’s director, international & alternate channel development.

The size of the Second Cup store varies from 150 sqf to 3,000 sqf, depending on the format. An outlet in a mall would average 600 to 800 sqf; while a street and neighbourhood format would be between 1,200 and 1,500 sqf. It can also be in the form of 200 sqf kiosks located at train stations, university campus, or in an office tower.

Merchandising is an increasing avenue of revenue. It can provide up to 25% of sales for a store, said Kinsella.

All Second Cup franchisees undergo an intensive three-week training programme at the group’s inhouse training centre plus an additional week in-store training. Called Coffee Centre, the training centre is located at the group’s headquarters in Mississauga, Ontario and another week of in store training.

 


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