Building
success in the coffee shop industry is about brewing a community environment.
It's one of the qualities of Italian coffeehouses that inspired Howard Schulz
to build Starbucks into a global brand, a brand that many analysts say has come
to symbolize the chain store more than the corner store.
Wes Herman, owner of The Woods Coffee Co. in Whatcom County, has carved out nine such community environments (i.e., retail stores) of his own and plans on expanding south in 2010. What started as a single stand-alone shop in February 2002 in Lynden (population 11,000) quickly turned into a blueprint for success-one that Starbucks is trying to replicate, says Herman.
Each of The Woods' outlets has its own community identity. The newest of the three in Lynden is at the base of a 53-foot windmill in the Dutch-themed downtown. The Ferndale and Birch Bay outlets, the two most recent additions, feature inside-outside fireplaces and eco-friendly furniture constructed from local wood. But it is in Bellingham where Herman created not just a coffee shop, but also a community center.
The Woods took an old public building in Boulevard Park on Bellingham's waterfront and renovated it to LEED standards. "It was just a tired, almost 100-year-old building," Herman says. The 2,000-square-foot store sits steps from the water, and a roll-up garage door brings the outside in. From there, Herman ties to the community through sustainability.
With a public composting center and a four-compartment recycling center, the community has taken ownership of the building. That is why, Herman says, the two-year-old store without a drive-through window has boomed into his highest-grossing endeavor. The Woods shows that community interaction can be more important than traffic. "The idea that people will drive in, walk in and walk out [of Boulevard Park] is so foreign," Herman says.
To promote sustainable standards, The Woods is also the only coffee shop in the county to offer 100 percent compostable clear and paper cups. He promotes the use of tumblers for hot or cold drinks as an environmentally friendly practice. Western Washington University students can even get a free cup of the Viking Blend by wearing WWU gear and bringing in their own mug on "Western Wednesdays."
Sustainability is just part of the culture of business for Herman. "It is involving people and we want that interaction and participation," he explains. Such interaction helps create an essence of community, the paramount role in a new store's success. "In our case, we are connecting with community and trying to be a part of it ourselves in ways that are unique to us," Herman adds. "We create an environment to have levels of comfort."
Those comforts include designing warm environments with leather sofas, Northwest architecture (exposed wood beams, rock facades, etc.) and fireplaces. Local and sustainable building materials and a Pacific Northwest color palette are also features. Each store has its own unique twists that tie to the local population.
"I heard Howard Schultz say that they had lost their cozy, warm environment," Herman notes. What Schultz was trying to re-create, says Herman, is an experience Woods already has. Indeed, if you walk into the original Starbucks at Pike Place in Seattle or its new "non-Starbucks" 15th Avenue location on Capitol Hill, it will give you a good sense of The Woods experience. "They [Starbucks] have standardized what we do and how we do it and are trying to capitalize on it," Herman says.
Herman's employees saw Starbucks officials scouting out The Woods stores, so he offered to sit down and meet with a Starbucks regional manager last spring. They talked store construction and working "green," Herman says. Starbucks' new stores reflect those ideas, which include the use of reclaimed lumber, building the bakery the same size as that in The Woods and the use of recycled materials and products to earn LEED points. Starbucks representatives declined to comment for this story.
While Starbucks may be trying to capitalize on The Woods, Herman says he is benefiting from Starbucks' recent troubles. He acquired his Birch Bay outlet, The Woods' second top-grossing outlet, after Starbucks backed out of the location before it was completed. Herman says he jumped at the chance to take over the prime coffeehouse-ready location. "That building was built to the specifications of Starbucks and we made architectural changes to meet our standards," he explains.
As Herman thinks expansion, he knows that there is often no carryover from community to community. He honed his brand with the first two spots in Lynden and was forced to re-establish himself in Bellingham with multiple sites. Herman thinks he can replicate the same identity moving south. "We believe it takes multiple locations to establish a brand," he says. "One store next to a freeway doesn't speak to who we are."
Herman
is in discussions to bring The Woods to both Skagit and Snohomish counties-with
multiple locations in order to create a sense of community-but has already
landed on store 10. His latest endeavor, in Nairobi, Kenya, is slated to open
by the end of January.
While the choice of going overseas so early may seem
odd, he came upon the idea when he met a group of women from Whatcom County who
had established a school in Kenya to teach locals how to create sustainable
businesses. The new Woods will not only be a popular draw for those thirsty to
buy a cup of Western culture, but it will also be a hands-on teaching tool for
the students, as the outlet will use only local coffee beans. Herman says he is
motivated to help the school succeed, and proceeds from the Kenyan blend of
coffee in his nine Whatcom County locations are donated to the school.
It's just the latest step Herman is taking both to grow his business and to establish himself as an alternative to the ubiquitous Starbucks. And with Starbucks watching, The Woods is replicating its own brand over and over again-a brand focused on community, no matter where that community lies.
Related: "The Third Wave"