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If things go according to plan, we’ll be seeing more Second Cup coffee stores around. I’m pleased about this because it’s a good coffee shop and Canadian, and I don’t think we Canadians need to give all our business to US Behemoth Starbucks, do we? (although for the record, I bought SBUX stock in the late 90s and its stratospheric rise enabled me to buy my condo. No joke).

Here’s the CEO’s 4-point plan to jump-start Second Cup:

1. Revert to a corporate structure
It was doing reasonably well, then in 2004 was structured as an Income Fund. If you don’t know what an Income Fund is, the name says the most important thing: it’s supposed to generate income for the shareholders. This means that the profits did not get reinvested in the company, but were distributed to shareholders.

As of January 2011, that changes. It’s converting back to a Corporation which means the company can do with its profits as it sees fit.

2. Set up more shops
In this case, it’s planning to ad 30% more stores.

3. Focus our attention more on its coffee instead of image
Look for more explicit information about their coffee. Personally, I don’t know how much that would draw me, but the next one will:

4. Go fair trade and eco-friendly
This one would draw me. I always buy Level Ground coffee for use at home because it’s fair trade. It’s one teeny way I hope to help the world be a better place. Similarly, if I knew there were shops that gave me fair-trade lattes, I’d most definitely pay (a bit of) a premium, and go (a bit) out of my way to find it.

I don’t think I’ll be investing in Second Cup just yet, but I’ll be keeping my eye on it.

About the Author


Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com

3 Comments

  1. brad

    I think the main thing they need to do is to find a way to distinguish themselves from Starbucks. “We’re Canadian and they aren’t” isn’t really going to cut it for most consumers. Most true coffee snobs sneer at both Starbucks and Second Cup and would never drink there, but I think the hierarchy of “quality coffee” in the general Canadian’s mind is Starbucks first, with Second Cup coming in a distant second, followed by Tim Hortons/Dunkin’ Donuts.

    So I think Second Cup either needs to make better coffee than Starbucks does (easy for a small boutique barista but not so easy for a nationwide chain), provide better and/or healthier food, or offer some kind of service or feature that Starbucks doesn’t have. Otherwise I think they have a hard uphill battle on their hands. There are several places in my town where a Second Cup and a Starbucks sit side-by-side or across the street from each other; it’s typically standing-room-only in the Starbucks while there are lots of empty seats in Second Cup.

    [Reply]

    nancyzimmerman Reply:

    Good analysis Brad. And I agree. I do think they could develop a niche for themselves if they came out strong with the Fair Trade bit — folks like me who care about that kind of thing would become loyal. I know it’s not going to get the mainstream, but it could still increase their sales in real dollars.

    [Reply]

    Dec 28, 2010
  2. brad

    The problem is that Starbucks has been offering Fair Trade coffees for 10 years now (see http://www.starbucks.ca/en-ca/_Social+Responsibility/_Social+Responsibilities/Good+Coffee+Doing+Good.htm), so this still wouldn’t really help Second Cup differentiate itself from Starbucks.

    [Reply]

    Dec 30, 2010

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