Cadbury’s Answer to Starbucks
Three entrepreneurs from the U.K. with experience at Starbucks,
Harrods and At Home catering are thinking big with a new beverage-based foodservice
concept. But, this time it’s not the usual suspects — coffee, juices or smoothies
— that have them dreaming big. What has them dreaming of swimming in mounds
of pounds (sterling, that is) is cocoa.
David Morris, Marilyn Newman and Tony Goldsmith
have opened the first Cadbury Cocoa House in Kent, England with plans to eventually
have a chain of the shops employing 3,500 people across the U.K. in the future.
Mr.
Morris was the head of operations at Starbucks when it entered the U.K. He
more recently served as director of food, beverage and restaurants at Harrods.
“I knew Marilyn and we had a general discussion about what was coming
after the coffee shop and we saw this gap in the market for people that want
a great experience on the high street and to bring an affordable treat to everybody,” he
told Wales Online.
The concept, which licenses the Cadbury name, features
hot and cold chocolate drinks, knickerbocker glories (ice cream sundae, in
American English), teas, champagne and “choctails.” The shops feature a
30-foot ice cream bar, chocolate-colored leather booths with white faux-chocolate
buttons and a fireplace.
“Cadbury is a great British brand,” said Mr. Morris. “Whatever
age you are, you associate chocolate with Cadbury in the U.K. and what we have
tried to do is build on that great British heritage.”
The company plans
to push the local angle to the limit.
“Wherever possible, we’ve insisted on using local producers to
keep the concept British,” told Wales Online. “You won’t
find French, Italian or American items on the menu.”
The company offered
a £10 credit on its loyalty card to the first 100
people to sign up, according to the Maison Cupcake blog.
Discussion Question: Do you see the Cadbury Cocoa House or a similar
concept making it big in North America?
[Editor’s Note] From the Cadbury Cocoa House website: “Cadbury has
been passionate about quality since 1824 when John Cadbury first prepared drinking
chocolate in his grocer’s shop with a pestle and mortar. Enjoy all the passion
and quality of Cadbury at Cocoa House.”
As Mr. Morris says, Cadbury is a great British brand. Unfortunately, this is America in a recession and with some concern about the junk food we put in our mouths (not a lot of concern, but some). A new ice cream/hot chocolate shop is probably the last thing we need here. Thumbs down on the idea for the US and can’t wait to visit one in the UK.
I don’t know that Cadbury has quite the same cachet in the US as it does in the UK, so some of the brand benefits wouldn’t translate. But I’m intrigued by the concept – chocolate for grownups seems like it could fly. I mean, if shops based solely on cupcakes can make it, you’d think chocolate could. When you look at companies like Ghirardelli or Hershey’s, outside of their hometowns they really haven’t tried anything like this – and either one of those brands would have a shot at convincing people that the experience is going to be more than kiddie hot chocolate and some chocolate bars.
I don’t know that Cadbury is the “answer” to Starbucks, however, cocoa could be a very attractive business in North America and stand on its own. The entrepreneurs have “Starbucks” experience and backgrounds so that in itself will be an asset. Cadbury isn’t well known in the US, as it is known in the UK, however the possibilities for success do exist in my opinion. But don’t worry about Starbucks. They will not be run out of town by Cadbury.
Yes and yes, Stephen! I believe Mars tried it with Ethels and as good as the cocoa was the one near us got clobbered by the recession and closed down. My family loves to pick up Cadbury’s by the truckload when we’re in the UK but chocolate is a special treat–coffee someone doesn’t have the negative health connotation even when it’s so loaded with syrups and whipped cream it’s probably worse for you than cocoa. I don’t see people guiltlessly making their daily cocoa stop the same way they do their half caf double macciato.
Obviously, since Cadbury is a brand icon in the UK, such a concept has promise. While I do not think Cadbury has the brand equity to replicate the concept in the States, that does not mean that a US chocolate company could not do something similar in the US. However, in my mind to be successful in presenting a gourmet experience, you would need a gourmet chocolate like Godiva, Ghirardelli (already doing something similar in San Francisco), Lindt or See’s to have the cachet to pull it off.
I’m with Steve on this one. With all the effort and media coverage about obesity and its impact on health in the US I can’t imagine this cocoa concept being embraced. Well, maybe if it’s calorie free.
This concept reminds me of the Dylan’s Candy Bar (www.dylanscandybar.com), Hershey and M&M themed stores in New York City. I recently visited the Dylan’s Candy Bar (created by Dylan Lauren, Ralph Lauren’s daughter) with my family and some friends and the store was packed with customers. Not only buying candy, but also spending time at the 3rd floor sweet shop that served Hot Cocoa, Coffee, Pastries and of course candy. A themed store whether they call it Cadbury or just serve Cadbury products has the potential in larger cites that attract tourists. New York, Orlando, Las Vegas and San Francisco come to mind. Once they have an understanding of what the consumer is looking for the model could move to smaller cites with a smaller format. I can’t wait to visit this store when it arrives in the US.
As hard as it may be to do, separate Starbucks from coffee. Starbucks is a tremendous success because it capitalized on a concept that hadn’t existed before – the coffeehouse as a gathering place. It is not just a place to get a cup of gourmet coffee, but it has become a center for socializing and intellectual discussion, particularly among students and young urban professionals. Starbucks created a unique offering that was relevant and differentiated. It turned an ordinary and humble product into an extraordinary experience that customers are willing to embrace.
The Cadbury Cocoa House is the same, but with some creative menu items. In North America, this would be a greater challenge to Starbucks than McDonald’s or Dunkin’ Donuts. As described, the Cadbury Cocoa House is a gathering place and a very appealing one. This concept may have even broader social appeal than a Starbucks, as it can become a place that is comfortable for children and teens, a starting or ending place for a night out. Share a glass of champagne without going to a bar or an expensive lounge.
The Cadbury Cocoa House is creative, well thought out and fun. And it doesn’t hurt that there is a craze for quality and perhaps even healthy chocolate.
Just taking a look at the girth of many Americans indicates that there are a lot of chocolate lovers here. There will definitely a market, much as there was for Godiva. My sense is that Cadbury will have about the same level of opportunity here. Comparing that, however, to Starbucks seems a little far-fetched. Almost everybody, including a lot of very thin people who eschew chocolate, drink coffee. The market potential is just not equivalent.
I like this concept. It may not grow to the size currently envisioned, but it sounds like it staying power. As for whether such a concept would work here – why not? If it were solely hot chocolate being dished out, then it would definitely be a non-starter. But there are enough treats on this menu to cover a variety of taste desires. And the focus on chocolate adds a bit of indulgence that would surely resonate with post-recession consumers still worried about the economy and jobs.
Tut tut tut, aren’t we supercilious today? Maybe you should ask Irene Rosenberg what she thinks of the Cadbury brand and its opportunities in the US. I’ll betcha she’ll be sorry she didn’t think of this first – but of course there’s still time for her to step in and on the guys who have made an early announcement of their plans.
In many ways, I agree with all of you but in other ways I think you are potentially, and sadly, mistaken. As Lisa pointed out, it’s a perception issue. People have persuaded themselves that coffee “loaded with syrups and whipped cream” isn’t actually bad for them. Cadbury over here isn’t what you guys would call a “gourmet” chocolate (we have lots that are and some that have even opened tantalising little cafes) but perhaps if that’s how it’s marketed over there, it could be a winner. After all, lots of American consumers have more than a little love for perceived superiority. And not many of them are averse to decadence and deliciousness. This may not be an idea that will ever kill Starbucks but there are plenty of people who would prefer it, even as an occasional alternative if not an every day fix.
One store in the UK does not mean that their concept will be successful in the UK, let alone in the USA. We already have Baskin Robbins, Cold Stone, Rocky Mountain, Dairy Queen, Ben and Jerry’s, etc, which clearly fill this gap, plus thousands of local retailers that offer these products and more. This is a unique idea, but hardly a revolution in the industry…at least here in the USA.
It’s a great idea and if the concept can win on the ‘experience’ level, it could be very successful. Will that mean it’s transferable to the US? Maybe, maybe not for the Cadbury brand itself. However, the opportunities are boundless here for someone else – anyone else.
In the USA Starbucks has become synonymous with coffee just as Kleenex is synonymous with a tissue. Nevertheless, Starbucks is vulnerable just as, let’s say, Walmart. Think not?
It will never be one competitor that will take Walmart and likewise for Starbucks. The market is capable of shifting anytime and shifting quickly to whom the consumer perceives meeting their need both for their ‘fix’ and for the experience that once was Starbucks. It’s foolish to think otherwise.
Let’s play and let’s let the best cup/treat win. As much as a Starbucks fan as I am, they have stretched my loyalty. I think that’s true for most of their customers. It’s also true that there isn’t a viable alternative even slightly giving the hint that they could be as ubiquitous as Starbucks. In my market Bigby (formerly Beaners, but rebannered to satisfy the politically correct) is gaining but not in the experience factor. They have great coffee but at the same price, someone can pour it for me – thank you very much.
There couldn’t be a better time for entrepreneurs to be capitalizing on Starbucks’ vulnerabilities and their lack of ability to deliver a sustaining experience. There’s a gap. It’s wide. Is it Cadbury that could fill it? Who knows? I am willing to give almost anyone a try. They will have to be great long term but to beat the current state of Starbucks – not so much. They still have me and many but….
I am surprised to find so many points about this being a new idea. While I agree that Cadbury does not have the cachet in the US, depending on how the store is branded this could be overcome.
However, several other thoughts below based on the comments:
1) Chocolate Cafes/Bars were a big movement several years back. They were all over Chicago and NYC and many other areas. All the big players from Ghirardelli, Hershey’s, Ethel’s had a chocolate cafe. There are still thriving chocolate cafes such Vosges and Hot Chocolate. While these mentioned are geared toward adults, others such as Dylan’s mentioned above focus more on children and do incredible business.
2) People don’t care about calories when they want a small treat because it is a supposed to be a special reason to indulge. Like cupcakeries, these are the exact places that can do great business now, a small price for a little treat without people feeling the guilt of buying expensive luxuries.
3) The recession didn’t kill the chocolate cafes that were open, flawed execution and lack of planning did. Many were not well thought out and had no overall plan or theme and wouldn’t have survived no matter what.
4) Depending on the approach, I don’t think it is competing with Starbucks (though more so than DD) or Dunkin’ Donuts. This is a place for adults to meet with friends and enjoy dessert with friends, or if geared towards kids a fun and candy oriented place. While Starbucks is attempting to get in on the “bar” scene they have an uphill battle. A chocolate cafe is a fun and different place to meet and relax and enjoy oneself with a small indulgence.
Can a chocolate store be the Fourth Place? If it is aimed at women and conveys a sufficiently sophisticated atmosphere, it just could.