Second Cup is expanding where Starbucks can't follow: Pakistan
The home advantage wasn't enough to save Second Cup in the '90s, when Seattle-based Starbucks wrested dominance of the Canadian premium-coffee sector away from the company on its own turf. But now the coffee chain has a plan to expand into territory where Starbucks will have trouble following.
In June, Second Cup launched its first café in Islamabad, Pakistan , with 20 more locations planned to open in the next three to five years. The country's growing middle class has increasingly attracted North American fast-food chains, but many have found it a harder market to crack than they expected.
This is especially true in Pakistan, where North American coffee culture is gaining popularity, but anti-American sentiment runs high. Second Cup has found being Canadian gives it some cachet, however: it can satisfy the allure of western culture, without the negative political associations that go hand in hand with being a U.S. multinational. Kentucky Fried Chicken, for instance, shuttered 60 stores in Pakistan during anti-American protests last year.
"People like Canadians," says Jim Ragas, president of Second Cup International, "As we grow, I see that as a big plus for us."
Second Cup has already tapped the Middle East for growth, with franchises in Kuwait, Oman, Saudi Arabia and others. In general, striking a balance between novelty and cultural sensitivity is the challenge at the moment, says Ragas. Learning about regional preferences in Pakistan could make it easier for Second Cup in the future, as well; Ragas says the country serves as a good testing ground for a possible move into the far larger Indian market.
Tea has long been the traditional drink in South Asia, but coffee consumption is rapidly growing among young people in Pakistan, creating a market for premium coffee shops....
Second Cup brings coffee to grocery stores
Café franchise system Second Cup and Kraft Canada are planning to launch six whole bean and ground coffees in grocery stores across the country, beginning in February 2014.
Featuring a new package design, the whole bean lineup will include cuzco, fair trade, organic mild roast, paradiso medium roast and espresso forte, while the ground coffee lineup will include paradiso medium roast, Colombian supremo dark roast and caramelo.
“We are really excited about the new offerings in grocery stores because they will give Canadians another way to enjoy delicious coffee at home,” says Stacey Mowbray, Second Cup’s president and CEO. “We serve some of the highest-quality coffees available in Canada and our expansion into grocery aisles will further establish Second Cup as a leading player in the premium coffee industry.”
The new product line is one of several major initiatives recently announced by the franchisor. In July, a new café design concept was introduced in downtown Toronto, elements of which will start to be applied nationally this fall. Second Cup is also testing a new customer loyalty program in Western Canada.