ROASTING COFFEE BEANS PERKS BUSINESS, MARGINS AT BUSCH'S

ROSEANNE HARPER

ANN ARBOR, Mich. -- A micro coffee bean roaster and a staff dedicated to making the best cup of cappuccino in town have created a successful brew at Busch's Valu Land here.

Sales of espresso, cappuccino and cafe latte have more than tripled projections made last spring when the retailer launched its first cappuccino bar, said Dan Courser, vice president of perishables at four-unit Busch's. Business has been so good that a similar operation is planned for new stores, one of which will be opened next year. And a modified version will be incorporated in two existing stores within the next few months, Courser said.

"The roaster sets us apart. Customers can see the beans being roasted, and the aroma is incredible. It brings people right to the counter," he said. Handling just four pounds of beans at a time, the roaster is run virtually around the clock. In addition to supplying fresh-roasted coffee for the cappuccino bar, the equipment is used to roast a variety of exotic beans that the deli then sells to the grocery department.

The roaster's glass sides offer a view of the beans jumping around as they're hot-air roasted. Besides providing "theater," the on-site roasting "gives us the capability to produce a truly excellent cup of coffee," Courser said. When plans were discussed last year, the company decided it would make its mark with top quality. How else could it compete in a relatively small college town that's home to more than 60 coffee houses? The strategy has apparently worked.

"We aimed to sell 50 cups a day, but we're selling more than 150 at the one store," Courser said, adding that the $20,000 bean roaster paid for itself quickly. Regular cappuccino is the best seller at $l.25 for a single and $2 for a double. The biggest volume is between 7 a.m. and 9 a.m. At least one trained operator, dedicated to making and serving coffee drinks and a variety of fruit-based drinks, is on duty at the bar from 6 a.m. to 11:30 p.m. Roasting its own coffee beans enables the cappuccino bar to take a gross margin of 75% to 80% and a net profit about 50% higher than if it bought the beans already roasted, Courser said. Although it sounds labor-intensive, labor accounts for no more than about 20%, he said. The program also has boosted sales of bakery items. The roaster and espresso machine are situated near a refrigerated pastry case. The deli gets the ring, however, for baked goods sold at the cappuccino bar.

Glass-domed cake plates display muffins, sticky buns and cinnamon rolls for 99 cents each. "At that price they fly. We're taking less margin than normal in the bakery, but I'm trying to build sales. I want to get everybody who buys a drink to buy something else, and 99 cents is a magic number for these items," Courser said. The bakery also has been spurred to produce items in miniature, such as a 2.5-inch cream pie. And cake is now offered by the slice.

Seating for about 10 people is provided several feet away from the cappuccino bar. With future bars, however, more seating will be incorporated and it will be adjacent to the cappuccino bar, Courser said.