Number Two and Liking It

Jan 27, 2005

By George Anderson

Caribou Coffee vice president of marketing Chris Toal would be the first to tell you his company is no Starbucks. The Seattle-based chain has over 6,000 stores. Caribou has 306 shops currently in operation.

Still, “We’ve had nice growth over the last several years,” he said.

The Minneapolis-based chain has its coffee shops located primarily in the upper Midwest as well as Washington, D.C. and some coastal states in the Southeast. The chain plans on a westward expansion with shops opening in Omaha and Denver this year.

Earlier in the week, Caribou announced an agreement to have its coffee served on Denver-based Frontier Airlines’ flights.

In a released statement, Caribou chief executive Michael Coles said, “Frontier is the perfect partner to introduce us to the Colorado community. Whether its airplanes or coffee, Frontier and Caribou share the same dedication to the quality, integrity and value of our products, and we recognized very quickly what a great association our new Denver customers would have if we were to align ourselves with Denver’s hometown airline. We know that Denverites have a discriminating palate, and we are eager to put our product to the test with Frontier’s passengers as well as all of our new customers as we make Denver the first stop of our Western expansion. Denver—get ready for an amazing cup of coffee!”

The editors of Consumer Reports are among those who agree with Mr. Coles’ assessment of Caribou’s coffee. The publication said the chain’s Colombian coffee was the best of 40 brands it tested in 2004.

Moderator’s Comment: What is your assessment of Caribou Coffee’s business? What opportunities and challenges does it face as it continues to grow?

George Anderson – Moderator

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