Ten years ago, Don Reynolds wanted a good cup of coffee and couldn't find one. His small coastal community of Wilmington, N.C., didn't offer a gourmet coffee shop, so instead of settling for the alternative, Reynolds embarked on creating his own coffee concept — and it's been moving at a caffeinated pace ever since.
Reynolds' vision, Port City Java, with more than 100 units open or under development, is represented in more than 14 states and four countries, has seen an increase of 489 percent in commitments and has watched revenue grow from $12.5 million in 2003 to $15 million last year — and it just began franchising in September 2003. With well over half of the adult population in the United States drinking coffee daily, sales and development can only continue brewing for this franchise.
"There really is a coffee revolution taking place," Reynolds said. "It's not just hype. There is a difference in product when it comes to quality coffee."
Since its inception, Port City Java has been a model that includes not only coffee but also juice/smoothie bars, food and on-site baking, a concept Reynolds refers to as an all-day approach to sales.
"Our unique in-house baking and organic products allow us to compete with large, national chains," Reynolds said.
Food has been on the menu since the beginning, including in-house baked goods such as cookies, bagels, cinnamon rolls, brownies, muffins, scones and desserts. Other menu items include grilled panini, wraps, salads, iced java, shakes, frappés, freezes, tea, mochas, espresso and lattes, among others.
Recently the company expanded its menu to offer a breakfast sandwich program. The roll-out took place a couple months ago, but Reynolds said they've been working on the concept for some time.
"We were capturing sales from customers who would visit the cafés for their morning coffee, but they were telling us they had to still go somewhere else to buy their breakfast."
The company listened to its customers and created an over-size English muffin sandwich with egg, cheese and choice of bacon, sausage or ham to offer systemwide.
In addition to its unique menu, Port City Java is striving to have its coffee become 100-percent organic- and fair trade-certified within the next 12 months, a vision that Reynolds had five years ago. The company also has expanded a store in Wilmington to include its own fully functional organic roasting facilities adjacent to the distribution and corporate offices, which will offer room for the operation to grow as the Port City brand is expanded.
Grande growth
The company announced that unit sales for the first six months of 2005 increased 12.4 percent compared with the same period in 2004. The chain is expanding at a bold pace with a unique blend of sites across the globe. According to Reynolds, the company continues to explore opportunities with universities, hospitals, grocery store chains and business parks.
"We now have a blanket agreement with North Carolina State University to open five locations on campus. Two are already under construction," said Reynolds, who notes there are approximately 56,000 people on campus to whom they can introduce Port City Java. The company also is in five Harris Teeter grocery stores in the South, as well as a hospital in Florence, S.C., and a new site at the gym on the campus of Florida State University.
These nontraditional settings include modular units that are built off-site, then shipped to their specific locations and reassembled. The portable design allows for quicker openings and has an impact on the overall number of openings the company will see each year.
Other proven models that work for Port City include the company's drive-thru windows, which have been in place since 2001, as well as the opening of several cafés in certain markets to assist in brand recognition.
The caffeinated customer
As locations expand to include both freestanding and modular units of Port City Java both in the U.S. and abroad so, too, does the customer base for this brand expand. Reynolds pointed out that his most successful location, in Wilmington, N.C., was doubted by many when it was being built.
"Its location is such that there are both high-end and lower-income neighborhoods surrounding it," Reynolds said. "This store has the most diverse customer base. You'll see garbage truck drivers and subcontractors standing in line with doctors and attorneys here."
Reynolds attributed this to the difference in product, reiterating the notion that the gourmet coffee segment is not just hype. "If that were true," Reynolds said, "the truck driver would come in twice and stop, but because there is a quality product they can't stop coming."
Coffee craze
Reynolds recognizes that Americans have been drinking an inferior product for a long time when it comes to coffee. He attributes much of the coffee franchise's success to its product and the unique, quality taste that it offers.
The second — perhaps more notable — observation that Reynolds made is that today's coffee shops mean more than getting a cup of coffee. They represent meeting places for a caffeinated culture interested in connecting online and in person.
"When someone asks you to grab a cup of coffee, you know you're in for more than just coffee," Reynolds said. "You know that person wants to talk with you. Whether it's just casual conversation or closing a business deal, it becomes more about the relationship." That fact, no doubt, weighs heavily in the success of Port City Java.
