How We See It Blog

Hot Areas Of The Business

Posted on Aug 23, 2007 in How We See It Blog by Jeffrey Summers 0 Comments

The Sweet Life
The nation’s sweet tooth is becoming more insatiable, driving everything from the franchising industry, where cookies and ice cream concepts are growing categories, to the fine-dining industry, where diners are staying more often for the grand finale.

Dessert has become such a significant portion of the food industry that it’s warranted its own annual trade show since 2003. Meanwhile, according to Hudson Riehle, senior vice president of research at the National Restaurant Association, almost 1 in 3 fine-dining operators reported that consumers bought more desserts last year than in the two previous years. In an increasing number of cases, high-end desserts are stealing the spotlight, as entire independent restaurant concepts are being founded on the premise of tasty, upscale indulgence.

Paul Conforti and Kim Moore, 36 and 40, respectively, researched the restaurant industry for a year while attending Harvard Business School before they opened the doors to their first upscale, dessert-focused restaurant, Finale Desserterie & Bakery, in Boston in 1998. Offering an exquisite menu featuring Valrhona chocolate, honey caramel gelato, nougat mousse and cherry almond Florentines, they are often credited with the distinction of starting the first high-end dessert concept. Their focus is as much on high-quality ingredients as it is on the overall experience. Says Conforti, “Making sure [customers] have the best dessert of their life is important, but it’s also about the atmosphere, service, background music [and] cleanliness of the restaurant.”

They have since grown their restaurant concept into a $6 million-plus business and are about to open their fourth location this month. Planning to open three more locations in Massachusetts next year and to reach Washington, DC, by 2009, they are working toward their ultimate goal of going nationwide. With an idea as divine as upscale desserts, $1 million in sales can be achieved with only one location, and the proof is in the pudding: One of Conforti and Moore’s locations makes twice that much annually.

Coffee

Whether you want to buy a franchise or do it yourself, check out 7 hot markets that can make you a millionaire.

Starbucks revolutionized the coffee industry by transforming the beverage into the most necessary of luxuries, but numerous independents and ambitious franchisors have profited from coffee’s popularity and are riding on their own caffeine high. According to Rob Stephen, immediate past president of the Specialty Coffee Association of America, a coffee trade association, opportunities in the industry abound. In fact, according to the SCAA and Mintel Group, the industry grew to an estimated $12.27 billion last year. So if you thought Starbucks had the market locked down, think again–many are drinking in their own share of the profits.

Eric Schmidt, 43, is the owner of a Dunn Bros Coffee franchise in Lawrence, Kansas, and although he just opened his coffee drive-thru in March, he’s already working on opening two more coffee kiosks and estimating total year-end sales to be in the low seven figures. While he believes he could have reached this point with his own coffee concept, he has no doubt that buying a franchise helped him avoid many of the initial difficulties. The wealth of information available to him and the one-on-one assistance with finding the right location enabled Schmidt to get off to an impressive start.

But in moving forward, the defining strategy for success has simply been Schmidt’s own commitment and constant presence in the business and his community. From personally making sure that customers’ needs are met to being involved in local civic organizations and the nearby university, Schmidt makes sure all his bases are covered. “That’s probably the single biggest thing about it,” he says. “You have got to be completely involved in it from the day you open [your] doors.”

For those looking to establish their niche, Stephen identifies two trends taking place in the industry: product differentiation and point of view. In a market once defined by regular or decaf, coffee consumers now pay attention to the very farm where the beans are grown. Says Stephen, “You’re seeing coffee labels growing to three lines.”

Customers are also looking to retailers for opinions and overall expertise, so it is important for coffee entrepreneurs to be knowledgeable about the products they’re selling. Stephen believes that quality products, knowledge, point of view and a good location are the defining factors of success for both independent coffee entrepreneurs and franchisees.

So what’s ahead for the industry? Says Stephen, “We’re seeing a renaissance in iced and frozen beverages as a way to get to a part of the market that’s interested in soda or energy drinks.”

Source: Entrepreneur.com