Caribou Coffee identified Atlanta as one of the first major markets for expansion outside its mature strongholds in the Midwest, citing the potential for growth from the 11 locations there to 100 units in the next five to 10 years, according to a story in the Atlanta Journal-Constitution.
The Minneapolis-based, 544-unit coffeehouse brand also indicated it would work with franchisees to build out other parts of the Southeast, which would mark another layer of expansion in addition to Caribou’s development of core markets, namely Minneapolis, Chicago and the District of Columbia.
“Atlanta is a great market,” Mike Tattersfield, the brand’s chief executive, told the Atlanta Journal-Constitution in an interview. “It’s not a big store base right now. But Atlanta really is our anchor for expansion in the southeast of the United States.”
Tattersfield cited northern Florida and North Carolina markets like Raleigh, Charlotte and Chapel Hill as expansion targets outside Atlanta.
The brand has 135 franchised locations currently.
At Caribou’s first-quarter earnings conference call in May, Tattersfield told investors that the brand was on track to open 10 coffeehouses in 2011, primarily in the Minnesota and Chicago markets, with much of the real estate and construction work this year paving the way for accelerated growth in 2012. Caribou’s store growth goals are to open 20 to 25 units in 2012 and maintain a development pace of between 8 percent and 10 percent beginning in 2013.
The brand’s recent strategy to grow sales and average unit volumes has centered on menu innovation, not only in beverages with the low-calorie Northern Lite drinks or mochas made with real chocolate, but also with food. Oatmeal was introduced in early 2010, and Caribou executives credited a line of breakfast sandwiches introduced this year, driving the bulk of the company’s 4.3-percent increase in first-quarter same-store sales. Sandwiches and other baked goods for lunch are currently being tested.
Caribou operates or franchises coffeehouses in 20 states, the District of Columbia and nine international markets.