Business is booming at Biggby’s
Business is booming at Biggby’s
Franchise tapped as nation’s fastest-growing retail coffee chain
By Melissa Anders
Lansing State Journal
EAST LANSING – Maybe it’s Biggby Coffee’s caffeinated drinks, with names like Butter Bear and Caramel Marvel.
Or it could be the motto: “B-Happy, have fun, make friends, love people and drink great coffee.”
Whatever the reason, the coffeehouse chain’s owners, franchisees and employees have much to smile about. Biggby’s business is booming, even though the economy isn’t. Customers, it seems, don’t mind paying a few dollars for specialty coffees, lattes or maybe a scone or sandwich.
CNBC has pegged Biggby Coffee as the nation’s fastest-growing coffee retail chain. The business news cable television channel recognized the East Lansing-based coffee chain in an online feature in conjunction with its special report on “America’s Coffee Addiction.” The television special premieres at 9 p.m. today, with repeats at 10 p.m., midnight and 1 a.m.
And Biggby recently was named one of the top 30 food franchises by a franchise industry publication.
Biggby opened 10 new stores last year for a total of 115, a 9.5 percent growth rate, according to co-founder and CEO Bob Fish. That’s a little more than the data CNBC used from Chicago-based food industry research and consulting firm Technomic Inc. – it listed Biggby with a 7.3 percent growth rate and eight new stores.
Biggby’s growth outpaced that of larger rivals, including Starbucks Corp. and Dunkin’ Donuts.
“It’s really rather remarkable,” Fish said.
Biggby is not slowing down. Eight more stores have opened so far this year and another 13 are in development, Fish said. By contrast, Starbucks, the largest coffeehouse chain in the nation, closed 23 stores last year, though its 11,000-plus stores and 9 percent sales gain more than dwarfed that.
The Biggby chain started out in 1995 with one shop in East Lansing called Beaner’s. It now has locations in seven states, including about 25 in the Lansing area.
The company had nearly doubled its number of stores every two years since it began franchising in 1999, but that growth slowed during the recession, Fish said.
Now, he hopes to tap into the interest from current operators to add stores, coupled with a strong pipeline of new franchisees, to grow to 300 stores by 2015.
Most of Biggby’s coffee shops are in the Midwest, but it also has locations in South Carolina and Texas.
“Our preference is to build in co-centric rings where we can connect the dots in both distribution and marketing,” Fish said.
Biggby, a privately owned company, had $65 million in sales last year, according to CNBC.
Same-store sales are up about 10 percent so far this year, Fish said.
The home office in East Lansing has 22 employees. Systemwide, there are about 2,200.
Mohamed Shetiah is responsible for more than 200 of those employees.
The company’s biggest franchisee, he’s opening his 20th Biggby store in Meijer Inc.’s Okemos store next month. Coincidentally, it’s replacing a Starbucks operation.
Shetiah co-owns nine shops in the Lansing area, along with locations in Ann Arbor, Kalamazoo and Toledo.
He credits the chain’s success to its focus on serving quality drinks and building relationships with customers.
“It’s not just about providing customer service, it’s about building relationships … continuously engaging customers in conversations,” he said. “We want our customers to feel like they own our stores.”
The friendly staff is one of the reasons Lansing resident Chelsea Wilkins said she stops by Biggby at least three times a week.
“I like their coffee, and we always have good parking,” she said while studying at the Biggby on Abbot and Lake Lansing roads in East Lansing.
The company also seems to be keeping its franchisees happy – it was listed among the top 30 food franchises for 2011 by Franchise Business Review, a market research firm based in Portsmouth, N.H.
The list was based on surveys of about 1,780 franchisees from 78 brands nationwide.
The chain scored above average for training, support and leadership, said Eric Stites, president of Franchise Business Review.
“Biggby obviously has good satisfaction with their franchise owners, which is in my opinion, much more important than how quickly they may be growing,” Stites said.
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