Dunkin’ Donuts and Starbucks are strengthening their presences in Connecticut, making product differentiation increasingly important for independent coffee purveyors.
The number of Dunkin’ Donuts locations in Connecticut has risen by 76 in the past five years and now stands at 536, according to Sara Manners, a Connecticut-based spokeswoman for Massachusetts-headquartered Dunkin’ Donuts. The chain has also put its name on Hartford’s baseball stadium, which is scheduled to open next year. Dunkin’ Donuts has stood behind the project amid construction delays and legal wrangling.
“Baseball is America’s favorite and Dunkin’ Donuts is America’s favorite coffee so bringing the two together was a natural fit for us,” Molly Loh, the company’s field marketing manager for Connecticut, said in a statement. “Dunkin’ Donuts is proud to support the Hartford Yard Goats and we continue to look forward to a 2017 season in Dunkin’ Donuts Park.”
Both Dunkin’ Donuts and Seattle-based Starbucks Corp. declined to release Connecticut sales figures.
Dunkin’ Donuts U.S. comparable-store sales rose 2 percent while store traffic declined during its fiscal third quarter that ended Sept. 24, according to an Oct. 20 press release from its parent company, Dunkin’ Brands Group Inc.
Starbucks, which has about 60 Connecticut stores, released figures on Nov. 3 showing U.S. comparable-store sales up 4 percent for its most recent fiscal quarter while traffic decreased 1 percent. The quarter was the most profitable quarter in Starbucks’ more than 20 years as a public company, helping set a record for fiscal year profitability, Chief Financial Officer Scott Maw said in the press release.
“The trust and confidence our customers have in the Starbucks brand – and in our store partners – is propelling our business forward in markets and channels around the world as never before,” Chairman and CEO Howard Schultz said.
Massachusetts-based Cumberland Farms, which periodically runs a Free Coffee Fridays promotion, as well as fast-food giants McDonald’s and Burger King are among the largest coffee sellers in Connecticut. The companies declined to comment and provide figures.
With chain businesses strengthening their positions, smaller operators have to bolster their brands by offering unique services, market observers and participants said.
The Buzz Truck, based in Fairfield, is one business doing just that. Husband-and-wife team Alex and Jessica Grutkowski began their mobile coffee business three years ago due in part to frustrating experiences at chains.
“After being late to pick up my children from preschool due to long drive-thru lines at Dunkin’ for subpar coffee and often incorrect orders and not being able to park at Starbucks because people working there all day hog the parking lots, the idea came to me,” Jess Grutkowski said.
The Buzz Truck rolled out in Fairfield County after the Grutkowskis formed alliances with organic coffee roaster Ed Freedman of Shearwater Organic Coffee Roasters, based in Trumbull, and a baker out of Fairfield, Sweet & Simple.
“Both are small businesses themselves and I think that together we are stronger, all supporting each other,” Jess Grutkowski said.
Additions of other local products followed the launch including Nothin’ But Premium Foods of Westport; Planet Fuel, a Fairfield-based juice company; and Leaf & Ardor Tea Co. of Fairfield. Local support from town officials and other patrons has been inspiring, the couple said.
“Any small business has to offer something special and different to compete with corporate brand chains,” Jess Grutkowski said. “Fairfield is a town that has embraced small, local businesses like ours with open arms as its residents would like the town to preserve its unique local flavor.”
Local support even helps small businesses in transition, said Carol Dahlke, proprietor of Ashlawn Farm Coffee. Dahlke’s Old Saybrook operation includes a building dedicated to the café and another to roasting coffee.
Loyal customers as well as a presence near Old Saybrook’s train station has perked up business, she said.
“I’ve gotten tremendous support,” Dahlke said. “We’re thriving here.”
Ashlawn Farm Coffee doesn’t take customers for granted, she said. Due to the busy transit location, counter staff increases when lines get longer.
“Everyone is usually very patient but it’s important that the lines move fast,” Dahlke said.
Branford-based Willoughby’s Coffee & Tea, established in 1985 by Barry Levine and Bob Williams, has grown to four retail stores in the New Haven area along with a centralized roasting plant. Serving beverages in espresso bar, coffeehouse settings is not what Willoughby’s is about, Levine said.
“We don’t chase every new trend but take seriously the role of selecting coffee to roast on behalf of our clientele and doing the best possible job in roasting,” he said. “We have a very large, loyal following that has remained with us through the years and we are always adding new customers.”
Product novelty and quality along with hard work are key ingredients to survive and thrive as an independent coffee businesses, said Sarah Maloney, executive director of the Hartford-based Connecticut Restaurant Association. She named Daybreak Coffee Roasters in Glastonbury and Peaberry’s Café in Simsbury as examples of this.
“Just like the hundreds of smaller, full-service restaurant operators competing against national chains across our state, small coffee shop operators find their success in various ways,” Maloney said. “Restaurant operators, whether local mom-and-pop or major corporations, have an entrepreneurial attitude and are willing to put the time and effort into making their business a success.”
Food and beverage service businesses in Connecticut are licensed in four classes with Class 1 being the simplest operation. The addition of menu items such as hot sandwiches have moved many coffee shops including most Dunkin’ Donuts and Starbucks locations into Class 2 or 3, said Patrick McCormack, director of health at the Norwich-based Uncas Health District. Gas stations with small coffee service operations remain as Class 1, he said.
“It seems nobody wants to do just coffee anymore,” McCormack said.
The Connecticut Office of Tourism has more than 30 coffee businesses listed on its CTVisit.com website and is looking to grow that number, tourism director Randy Fiveash said. The listings are free to qualified businesses and can be promoted across the website including use of its “While You’re in the Neighborhood” feature, he said.
The tourism office has created “trails” for various foods and beverages including beer, wine, chocolate, chowder and pizza. A coffee trail hasn’t been established but could be in the future based upon ongoing research, Fiveash said.
“We know how much culinary experiences can drive tourism,” he said. “We don’t yet have a grasp on how coffee businesses are driving tourism in Connecticut but it’s definitely a trend we’re watching.”