Port City Java Perking Up Plans for National Expansion
WILMINGTON, N.C.-- (NATION'S RESTAURANT NEWS) -- October 18, 2004 -- Port City Java officials, one year after launching a franchise program to initiate rapid growth of their hybrid gourmet-coffee brand, said they have a structure in place to support the nationwide development of the 62-unit chain. Operating now in 12 states, the 9-year-old concept, which integrates coffee, sandwiches, salads, bakery products and a smoothie and juice bar, has been opening two stores per month since last spring, officials said.
That pace will quicken to one unit per week by November and two units per week by the first quarter of 2005, according to founder and chief operating officer Don Reynolds. From 2006 on Reynolds projected that Port City will maintain a 100-storesper- year stride.
" We're getting signed and paid commitments to add 12 new stores to the Port City system every month, " said Reynolds, a 17-year foodservice veteran who was chief financial officer for Asheville,N.C.-based McGuffey's Restaurants in the early 1990s.
To meet that pace, Reynolds has spent the past year upgrading training, marketing, menu development, product supply and operations at the company's new 17,500-square-foot corporate headquarters and training facility here.
Those initiatives capped a five-year concept refinement aimed at distinguishing Port City as a gourmet coffeehouse brand that is built on distinctive products and service, and features a menu for every pocketbook. The daylong check average is $3.69.
" We've always followed the path of being different by being better, " notes Reynolds, who calls Port City " a cross between Starbucks and Panera Bread. "
There are 40 additional Port City locations currently in development.
According to Reynolds, 13 of those units will be operating by year-end and the remainder within eight months. Of the 62 open units, 10 are company operated.
At the end of 2003 the company had 25 stores that had been open for at least a year and were grossing $430,000 on average.
Total revenue last year was about $12 million, Reynolds said. This year, the Port City group expects to near $25 million, he added.
" A long time ago we identified the importance of creating an all-day model with lunch items, " he explained. " Without that you get a serious traffic lull between 11 a.m. to 2 p.m. "
According to Reynolds, the ongoing efforts of industry leader Starbucks as well as other coffee chains to incorporate sandwiches and baked goods into their menus serve as evidence that food influences traffic patterns.
" We've always made food and juices part of our concept, " Reynolds said. " So we've been poised to capitalize on the growing health-and-fitness wave. " In addition, a commitment to increasing organic menu offerings gives the chain another link to health and the environment, he noted.
Four category legs support the Port City menu. The first leg includes hot, chilled, brewed or flavored coffees and teas, sodas, waters, espresso, cappuccino, iced drinks, frappes, freezes, shakes, fresh-squeezed lemonade and Italian sodas.
In total, beverages account for 50 percent of an average unit's revenue 25 percent from such barista drinks as espresso and cappuccino and the other 25 percent from all other beverages.
The second menu leg comprises sandwiches and salads, which account for 20 percent of revenue. These menu offerings include such items as the Thai chicken, Caesar and BLT wedges, as well as a variety of grilled paninis, including the Sicilian with chicken, the Portafino with roast beef, the Crabmelt with Fontina cheese and the vegetarian Palermo.
Port City menu legs three and four represent the smoothie-and juice- bar category and the bakery category, each of which contribute 15 percent of total revenue.
Smoothie and juice items are made from pure fruit with no added ice. Baked goods include store-finished muffins, cookies, croissants and cinnamon rolls.
" We set ourselves apart by baking on premises from early on, " Reynolds said. " We're also testing a heated bakery case from 6:30 a.m. to 9:30 in two locations. These products are hot and fresh. "
Reynolds also introduced an organic coffee program and is featuring one organic coffee selection every day.
" Organic roasting is another way we separate ourselves, " he said. " It's a big deal, a big commitment, but in the near future we'll be serving organic coffee exclusively. "
Port City also is turning up the marketing heat to announce its novelty and growth. A new advertising campaign boasts that Port City beverages are richer in flavor because they contain more shots of espresso than the industry standard. A shot is a measured 7-gram portion of ground coffee.
For example, chains such as Starbucks and Caribou make 12-ounce coffee portions with single shots of espresso; however, Port City uses two shots for the same portion, Reynolds explained. When making a 16-ounce coffee Starbucks and Caribou add two espresso shots, but Port City uses three shots. For a 20-ounce coffee the competition still uses two espresso shots, while Port City uses four shots, he said.
" We knew from day one that we wanted to differentiate ourselves with a better taste profile, " Reynolds said. " The ads give the customer a clear picture of how much richer our coffee is. They've always been able to taste the difference, but getting the concept of richness really brings it home. "
The Port City leadership team includes investment partner and chief executive Alex Thorpe, a real-estate developer who oversees site selection. Operations director Steve Schnitzler, an alumnus of The Culinary Institute of America, joined the group in 1998. Training director Vicki Kenyon came to Port City from Shaker Heights, Ohio-based JRM Bakeries, which is the largest franchisee in the Cinnabon system. Greg George and Tyler Polhill direct franchise sales and franchisee relations, respectively.
Port City's director of roasting and distribution is Eric Wadell, a casual-dining veteran.
The company's roastmaster, Frank Tokes, joined Port City in 1997. Reynolds is the majority stockholder.
About the Port City Java® Brand
Port City Java® is located in Wilmington, NC. The Company opened its first café in March 1995, in Wilmington, NC. The Company began Roasting in October 1995 and Franchising in September 2003. Port City Java® has created a specific identity by creating an " all day approach " to sales, through its café environment. For additional information regarding Port City Java®, please email us.
