Coffee Shop Diversification: Should You Expand Your Product Offerings?

Blog > Coffee Shop & Restaurant Operations > Training, Marketing

Whether it’s adding to your specialty coffee menu, selling gift items or going outside your shop to find new business, diversification can be smart—if you don’t take it too far.

Have you ever walked into a specialty coffee shop to get a simple drink, only to be confronted with a mile-long list of beverage options—and retail offerings (greeting cards, t-shirts, coffee mugs, bags of granola, trendy teas, hip magazines, candies)—that were more than a little overwhelming? A shop that has transformed from a focused and uncluttered coffee purveyor into a snacks and sundries retailer is hard to define as a specific type of business.

But let’s face it: It’s difficult to pay the rent by just selling coffee. Starbucks certainly sells a lot more than coffee, with dozens of prepackaged, grab-and-go meals, snacks, drinks and sweets on offer—as well as swaths of real estate dedicated to brewing equipment, mugs and coffee gifts galore. There’s nothing wrong with this approach as long as it doesn’t make it hard for people to move around the shop, and that you can expect to sell enough product to justify putting shelving where you might otherwise put a table and chairs.

Diversification can also be a buffer against slow hours/months, and help you keep up with trends—and the competition. If you’ve offered the same coffee drinks and pastries for who knows how many years, of course the new place down the street will pull away some of your customers. Don’t rest on your laurels or ignore changes in the market.

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So, how do you go about adding to your menu?

When looking for ways to diversify your retail coffee business, ask yourself two questions: 1) Does it make sense for my brand and business model? and; 2) Will it be profitable?

Offering fresh squeezed juices at your coffee shop might make sense, but selling breakfast sandwiches may not—or vice versa. Not everyone is going to understand the allure of your amazing lattes, so why not become experts in tea as well?

But how do you know which route to take? Do your research! What are customers asking for? What are your competitors doing to attract business? What trends is the industry loving—or hating?

Ask a few customers here and there if are things they’d like to see on the menu. But take note: Added products should complement your business, not stray from the original mission. Any additions should be profitable or proven to increase sales of already profitable coffee drinks.

Other ways to diversify your business

  1. Get involved in local events – Supplying coffee for local events—charity 5ks, school fundraisers, monster-truck rallies, etc.—will expose you to a new audience.
  2. Provide coffee-at-home classes – Why not offer your expertise outside the coffee shop? People who want to make the best pour over, French press or espresso at home could use your help. Consider offering evening brewing classes for groups of 5-10 people on making whatever sorts of drinks they want—but have a plan and a structure for the class to guide them through all of the basics.

Just don’t lose your original focus

In the specialty coffee industry, focus is critical because it’s so easy to neglect the quality of the coffee being served and become distracted by other offerings. Over time, you could lose your customer base as quality depreciates and people find other shops that can provide consistency in a focused environment.

And there are other pitfalls to losing your primary focus on specialty coffee. Customer confusion, continued employee training, increased inventory cost, and overall lack of definition are added factors to be considered when a new menu or retail item is added.

Yet, diversifying your business can be rewarding if it grows your customer base and teaches you a thing or two as well. As always, consult your advisors, make sure your plans pencil out—and have fun bringing them to fruition.

Our mission at Intermix Beverage is to be your one-stop supplier of goods that meet or exceed the needs and expectations of your customers.

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