The Espresso Drive-thru and its Place
in the Specialty Coffee Industry

by Mal Montoya


While Starbucks, Java City, Second Cup and other in-line retailers are filling the American landscape with espresso cafes, a relatively new and growing distribution channel for specialty coffee is making its presence known: The espresso drive-thru. What started in the Northwest in small sheds bought at the home improvement store, is evolving into one of the industry’s fastest growing service-delivery models. The expansion of drive-thru operations southward into California and eastward across the country has sparked curiosity in the minds of business owners and consumers alike. The new drive-thrus are architecturally designed, adding flare and pizzazz to "the look of specialty coffee." And the quality of the products is just as appealing as the buildings.

Companies such as Starbucks have helped introduce consumers to the world of specialty coffee and espresso-based drinks. Every mall and strip center has numerous coffee cafes, and most neighborhoods have a corner cafe within walking distance. In the past year we have seen an increase in the number of espresso businesses opening their doors and an even greater number of people preparing to enter the market.

With the fast-paced lifestyles that so many of us have become accustomed to there is less and less time to stop and relax with a shot of espresso and read the paper. The espresso drive-thru provides an alternative. By offering a high quality product in an easily accessible environment, espresso drive-thru owners are redirecting the consumer market previously owned by in-line cafes.

And what a natural match. Coffee has been with us for hundreds of years. The success of McDonalds and Burger King has proven the viability of drive-thrus. So, what could be a more natural union than coffee and drive-thrus? Once thought to be a fad, espresso drive-thrus have succeeded and are growing in popularity, proving that a marriage between quality espresso-based drinks and the drive-thru concept is one that will last for many years. Truly, it is a "blend" made in heaven.

While the concept is undeniably a natural blend, one must decide if he or she wants to add the "whip cream" on top and open a drive-thru of his or her own. For an espresso drive-thru owner, annual gross profits can be very attractive if he or she pays proper attention to the viability of the site, demographics and traffic counts. Compared to other small business opportunities, the return on investment in the espresso drive-thru industry is better than most. When placed in a good location, an espresso drive-thru can serve 300 cars daily with an average ticket of $3.25 per car. This can generate annual gross revenues of $343,200. If you are an owner/operator, an efficient manager and "watch those pennies," you have the potential to net pre-tax between $75,000 and $100,000 per year. On the expenditure side, development costs can vary from city to city and state to state. For example, in California your total development costs, including the drive-thru building, equipment and startup inventory, site cost, etc., typically run between $150,000 and $200,000. These numbers will vary depending on building design, site cost, desired equipment, etc.

Although a fun and rewarding business venture, espresso drive-thrus are not without their challenges. As with anything worth having, the opening of an espresso drive-thru will require a great deal of work and perseverance. The old real estate saying, "Location, Location, Location," also rings true for the drive-thru industry. Locating a viable site is the owner’s first priority. Many variables contribute to the viability of a site, including planning and zoning restrictions, building and health regulations, traffic counts, demographics, etc. The next critical step, and perhaps the most important one, is working through lease negotiations. Signing a well written and agreed upon lease can save you thousands if not hundreds of thousands of dollars. It is well worth the investment to seek the services of an individual or firm to negotiate a lease on your behalf. Other challenges will include developing a business plan, obtaining financing and the appropriate permits. However, for an owner committed to a successful business, overcoming these challenges can prove to be well worth the effort.

The future of the espresso drive-thru industry looks very promising from both the owner’s and consumer’s view point. The specialty coffee industry is growing at a healthy pace and the drive-thru market is still virtually untouched, especially as you move east across the country. If you want to be self-employed, enjoy working and interacting with people, and have the persistence to overcome the business challenges, an espresso drive-thru business is a rewarding and profitable venture to pursue.

And now is the time to get in on the ground floor of this new and rapidly growing service-delivery model to fulfill the demand of a commuting clientele, by supplying what we as a nation of coffee consumers want: Coffee, made specifically for us, that is quickly and efficiently accessible from our cars.

Mal Montoya is a partner in Java Espresso Concepts, LLC a consulting and manufacturing company, based in Yuba City, California. He can be reached at 530.751.7700 or visit http://www.espressoconcepts.com .



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