The team at Starbucks Canada Foodservice in Toronto prides itself on applying the same dedication to quality, efficiency and social responsibility as it does to its thriving retail channel.
Since its establishment in Canada 15 years ago, the foodservice business has a steady track record of double-digit, year-over-year growth. “The goal in establishing the business was to expand the Starbucks (retail) experience to customers who simply couldn’t get there every morning,” says Richard Burjaw, VP of Foodservice and Marketing, Starbucks Canada Foodservice. Its sales are reflected in Starbucks Coffee Canada Inc. figures, which show growth from $978.0 million in 2012 to more than $1.0 billion in 2013.
Momentum has been building in the brand’s foodservice business, with the company servicing more than 500 hotels in Canada, the majority of which are four-star properties. These Starbucks’ lodging solutions take guests from check-in to check-out, with restaurant outlets, in-room amenities, banquet supplies, lobby cafés and licensed stores. Branded offerings include
Starbucks Coffee, Seattle’s Best Coffee, Torrefazione Italia Coffee, Tazo Tea and Fontana syrups. Foodservice business development managers work with staff at each property to determine the appropriate brand fit and product lineup.
Starbucks offers two lobby programs: We Proudly Serve Starbucks and Starbucks Licensed Stores. The first is for hotels that need coffee as part of an overall offering, while Starbucks’ licensed stores are owned and operated by an approved licensee (typically the hotel). The stores operate like Starbucks retail outlets in terms of product offerings, marketing and training support, but they are not Starbucks corporate-owned stores. Depending on hotel volumes, Starbucks staff can also assist operators in establishing a smaller kiosk concept as an alternative solution.
There’s a lot to bring to the table, and having had extensive experience working with joint-venture partners that brought Starbucks to convenience and grocery stores, Burjaw says hotels have become integral to building foodservice business in Canada. “Our lodging relationships have been an important part of that success,” Burjaw says. “Enabling our role in foodservice has been critical in offering consumers that first chance to enjoy a cup of coffee in the morning.”
While growth is ongoing, what’s more important is Starbucks’ focus on partnering with operators who are aligned with the coffee company’s vision and values. “We expect customers to pursue the same high quality standards we do. We consider ourselves lucky to have established the partners we have,” Burjaw says. Much of the approach to those relationships is rooted in the idea that Starbucks is a partner- and people-centric company. “That’s the single biggest differentiator for us,” adds the VP of Foodservice and Marketing.
The fact that Starbucks manages coffee distribution through its 1,400 store locations across Canada adds a competitive advantage. “We not only work with operators, we are operators. Most vendors in this channel are not operating their own stores, but we’ve done it and know a lot about how systems work,” he adds.
He is quick to point out that sales team members on the foodservice side have all been store managers at some point in their careers. “Everyone on the team is excited to work with [our] lodging partners,” he says.
So, when a salesperson visits a property, they bring unique functional expertise. Many have earned a Starbucks coffee masters certification after completing a special training program for baristas, a distinction that Burjaw believes brings another level of engagement to its operators, their staff and the guests they serve.
Field partners are out every day performing quality checks with the same rigour as if they were providing store service, explains Lindsay Grainger, national accounts manager for Starbucks Canada. Part of that is on-site training and tutorials for new and experienced staff members as well as coaching on inventory management. “We provide all the tools that are part and parcel of what we do in our stores,” she says.
That dedication to the customer experience is something Paul Gardian, executive director, Brand Operations and environmental officer for Delta Hotels and Resorts in Toronto, has learned to appreciate since the chain started working with Starbucks in 2012. Delta’s 42 properties were working with different suppliers across the country based on a recommended list. “We wanted to align ourselves with a brand or label to deliver on our guest promise regardless of where they were staying,” Gardian says.
While the hotel company explored the idea of a private labelling prog-ram, its team decided to feature a trusted brand with the infrastructure to support it. The prominence of the Starbucks name, along with the range of product choices, represents signifcant value for Delta’s food outlets and banquet operations. “We’re doing a lot to position ourselves as a four-star, full-service brand,” Gardian says. “The decision was made in the early stages of that to align ourselves with brands that have a similar philosophy. Customers appreciate it when strong partners come together.”
Starbucks employees worked closely with Delta staff throughout the roll-out. So, it didn’t take long for Gardian to realize synergies were in place. “We realized early in the game we were both anal about crossing our T’s and dotting the I’s. They are just as precise about how their brand is represented as we are,” he says.
In general, cultural alignment has always been an extremely important criterion when it comes to choosing Delta suppliers. “That alignment became clear when we saw that Starbucks matched our values in terms of community support and sustainable business practices. Everything being done within their business practices are things we would be proud of doing,” Gardian says.
An integral part of Starbucks Canada’s cultural DNA has been supporting communities across the county. A key national effort is the National Work Placement Program, a project dedicated to giving opportunities to at-risk vulnerable youth to build life and career skills through support and employment. Partner organizations include the Pacific Community Resources Society (PCRS) in Vancouver, Yonge Street Mission in Toronto and Wood’s Homes in Calgary. Starbucks has committed $843,000 in the next three years to the project, which is expected to expand into Montreal.
Starbucks also works at the community level, organizing food drives and cancer runs. It hosts a series of events during April, which has been designated a Global Month of Service within the company. A goal has been set for Starbucks employees around the world to provide one-million hours of service by 2015.
On the supply side, Starbucks has a long-established, high profile ethical-sourcing policy that promotes fair treatment for coffee growers. This year the company confirmed 95 per cent of its coffee is certified or verified as ethically sourced, and it’s committed to raising that number to 100 per cent in 2015.
Since cultural alignment is such an integral part of Starbucks’ business relationships, partnering with the coffee company may not be the best fit for everybody. “But when it’s the right relationship, we add value,”says Burjaw.