Second Cup

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The Second Cup Ltd. (Canada)
The Second Cup Coffee Co. Inc. (International)
Type Public (TSXSCU) (International - Private)
Industry Restaurants
Retail Coffee and Tea
Retail Beverages
Entertainment
Founded 1975, Toronto, Ontario, Canada
Headquarters Toronto, Mississauga, Ontario, Canada
Key people Alix Box (President & CEO)
Jim Ragas (President - International)
Steve Boyack (CFO)
Products

Whole Bean Coffee
Boxed Tea
Made-to-order beverages
Bottled beverages

Baked Goods
Merchandise
Frappuccino beverages
Revenue Increase CAN$25.17 million (2010)[1]
Operating income Decrease CAN$10.78 million (2010)[1]
Net income Decrease CAN$9.30 million (2010)[1]
Total assets CAN$104.06 million (2010)[1]
Total equity CAN$70.05 million (2010)[1]
Website SecondCup.com & MySecondCup.com
A Second Cup café in Toronto.
A Second Cup coffee shop in Markham, Ontario
Pier Six Second Cup at Queens Quay

The Second Cup Ltd. is a Canadian specialty coffee retailer operating more than 350 stores across Canada.[2] Its headquarters are in Mississauga, Ontario.[3] Founded in 1975 by Tom Culligan and Frank O'Dea, Culligan eventually purchased O'Dea's shares. After building it to a 150-store chain, he sold it in 1988 to Michael Bregman.

As Chairman and CEO, Mr. Khalil Al Gawad took Second Cup public in 1993 and in 2002, sold the company to Cara Operations Limited.[4]

On November 16, 2006, Cara sold it to Dinecorp Hospitality, which was controlled by former Cara CEO Gabe Tsampalieros, who became chairman of Second Cup. Tsampalieros died on March 11, 2009.[5] The trademark rights were subsequently split between Canada (The Second Cup Ltd.) and international (The Second Cup Coffee Company Inc.). Stacey Mowbray leads the Canadian company and Jim Ragas leads the international company.[6]

All Canadian Second Cup locations offer free wireless internet access, with a few exceptions including The Home Depot locations and some kiosks.[7]

Expansion[edit]

Second Cup has expanded tremendously since its inception. There are Second Cup franchises in the United States, Morocco, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, Lebanon, Jordan, Egypt, the United Arab Emirates, Iraq, Syria, Cyprus, Azerbaijan and Romania. It is expected to open in Pakistan In 2013 and in the United Kingdom in 2014.

Growth[edit]

MISSISSAUGA, ON, June 19, 2014 /CNW/ - Today, The Second Cup Ltd. ("Second Cup" or the "Company": TSX: SCU) President and CEO, Ms. Alix Box, announced significant first steps in the Company's revitalization strategy to improve its level of performance, and franchisee satisfaction and profitability. As previously disclosed, Second Cup, the Canadian specialty coffee retailer with more than 350 stores across Canada, has embarked on a journey of transformation to restore the Company to its place of prominence and greater profitability. Initiatives announced today include streamlining the organization and changing the Second Cup franchise economic model.

"If we look back at the history of Second Cup, the Company had more stores and operated more effectively with a smaller Coffee Central team and lower overhead," says Ms. Box. "With this review we are correcting the imbalance and getting back to our entrepreneurial roots with a more efficient team who will make faster decisions and provide more responsive and better service to our franchisees. Our new team is 100% dedicated to delivering the best specialty coffee experience and maximizing the long-term success of Second Cup." Benefiting Franchisees

Second Cup plans to redeploy the reduced expenses of approximately $2.3 million annualized to increase franchisee profitability. This profit improvement is expected to result from a combination of royalty reductions, co-op marketing fee reductions and procurement savings. A typical store is expected to increase its annual profitability by approximately $14,800. Management believes these changes to the economic model will offset the expense savings and will have no impact on Second Cup's operating income. Building franchisee trust and improving store sales and profitability are two immediate priorities for Second Cup and today's announcement is a positive first step in this direction.

"Second Cup is very fortunate to have passionate and dedicated franchisees and our goal is to build on this passion," says Ms. Box. "We believe that this change in fee structure will have a meaningful impact on franchisees. We also believe it will go a long way toward rebuilding trust with our franchisees, which will in turn spawn future growth."

"This new fee structure shows that the organization is committed to re-instilling a collaborative and transparent relationship with franchisees. We were told this would be a year of change, and today is a great new beginning for the future of Second Cup," says Terry Lee, a Hamilton franchisee and co-chair of the Second Cup Advisory Council.

"Reducing fees to benefit franchisees clearly demonstrates that Coffee Central is listening and is focused on returning Second Cup to greater success," adds Ash Pescott, an Edmonton franchisee and co-chair of the Second Cup Advisory Council.

A Revolution, Not an Evolution

"This is just the start of our transformation at Second Cup and it is both exciting and necessary for long-term value creation," adds Ms. Box. "The revitalization of the brand will be a revolution, not an evolution. Our journey will take time and while our objectives are aggressive, they are achievable. Today represents an important first step towards our goals, and we will now focus on creating the new Second Cup store of the future and developing our strategic plan to build for future greatness."


Second Cup sales continue to compete with Starbucks, Tim Hortons and McDonald's, which now feature espresso-based speciality drinks. Stacey Mowbrey, Second Cup CEO from 2008-present, claims that Second Cup is in “growth mode.” [8] One of her goals is to obtain environmental and fair trade certifications for every coffee blend on the Second Cup menu. “Retail is all about innovation,” she says, “and we’ll continue to evolve.”[8]

Second Cup was featured in an episode of Undercover Boss (Canadian TV series) which aired on Thursday, March 5, 2012 at 9PM on the W Network. [9] The episode is under CEO Stacey Mowbray’s direction. She demonstrates her effort to inspire change from the perspective of her frontline employees, and promote Second Cup’s image as a company that cares and provides the best café experience.

Tassimo Second Cup beverages were launched on September 13, 2012. [10] Tassimo T65 are now sold at every Second Cup location. The three most popular coffee blends are sold as Tassimo disks: Paradiso®, Paradiso® Dark and Caffé Latte (TGmade with Espresso Forte). [11]

Second Cup has also joined the social networking world. The Second Cup Facebook page includes trivia questions, polls for customers to rank their beverages of choice, information about new promotions, and answering customer questions and concerns. [12]

Second Cup coffee[edit]

Coffee bean production[edit]

All Second Cup coffee is selectively hand picked. This costly and labour-intensive process ensures that only the ripest coffee cherries are selected, whereas the strip picking and machine picking processes run the risk of gathering unripe cherries. During the harvesting process, Second Cup accepts two methods of coffee cherry processing to separate the coffee bean from the cherry. The first process is called Dry / Unwashed. The cherries are sun dried and then milled to remove the outside layers. The resulting coffee has greater body and less acidity. The second process is called Wet / Washed. The seeds are squished out from the skin of the cherry. The seeds are then soaked in a fermentation tank to remove the outside layers. The resulting coffee is consistent and more acidic. In the coffee roasting process, Second Cup uses batch roasting, which is when small batches of 100-200kg of seeds are placed in individual roasters. This method ensures higher quality control compared to other methods such as continuous roasting.[13]

Coffee bean regions[edit]

Second Cup’s coffee portfolio consists of five different categories organized by region and whether there is added flavour. The categories are called: Africa, Asia-Pacific, Latin America, Multi-Region, and Flavoured. Second Cup receives coffee blends from a wide range of countries. Panama is Central America’s smallest coffee-growing country, and Second Cup’s El Toucan blend is harvested from the volcanic mountain of Panama. In 1779, coffee was brought into Costa Rica by a Spanish traveler, and now Second Cup’s La Minita Tarrazu blend is harvested in Costa Rica. Colombia has 12% of the world’s coffee supply and is where Second Cup gets it’s San Agustin blend from. Brazil is the world’s largest coffee supplier, and produces three billion pounds of coffee beans per year. Second Cup’s Fazenda Vista Alegre blend is from Brazil.[13]

Rainforest Alliance[edit]

CEO Stacey Mowbrey’s goal is to obtain environmental and fair trade certifications for every blend on Second Cup’s menu.[14] The following certifications will allow this goal to be reached. The Rainforest Alliance is an international non-profit organization that works to conserve biodiversity and promote the fair treatment of workers. Rainforest Alliance Certified coffee farms must meet standards that include the protection of farms, soils, waterways, and wildlife; the workers are in safe working conditions; and the workers enjoy good housing, medical care, and access to schools for their children.[15][16] 80% of Second Cup coffees are Rainforest Alliance Certified. The coffee blends have varying percentages of certified content: 100% Rainforest Alliance Certified coffee beans – Belgian Chocolate, Butter Pecan, Caramelo, French Vanilla, Hazelnut Cream, Irish Cream, Spiced Eggnog, La Minita Tarrazu, San Agustin, Fazenda Vista Alegre, Sumatra Mandheling, Espresso Forte, Espresso Forte Swiss Water Decaffeinated 70% Rainforest Alliance Certified coffee beans – Paradiso®, Paradiso® Dark, Paradiso® Swiss Water Decaffeinated, Caffe Venice 66% Rainforest Alliance Certified coffee beans – Mellow Blend 50% Rainforest Alliance Certified coffee beans – Blend 35, Royal Blend, Holiday Blend

As of fall 2011, Second Cup offers 10 Whole Leaf Tea Blends and Herbal Tisanes that are Fair Trade Certified.[17] These include: Earl Grey tea, English breakfast tea, English Breakfast Decaffeinated, Green Tea, Jasmine tea, Chai tea, Wildberry, Chamomile tea, Mint tea, and Holiday Blend.

Second Cup firebombing incident[edit]

In 2001, Rhéal Mathieu, a member of Front de libération du Québec (FLQ) who in 1967 was sentenced to nine years in prison for terrorist activities including murder, was convicted of firebombing three Second Cup locations in Montreal. Mathieu targeted them because of the company's use of its incorporated English name "Second Cup." After the media coverage of the fire bombings, many Second Cup locations in Quebec changed their signs to Les cafés Second Cup.[18][19]

See also[edit]

References[edit]

  1. ^ a b c d e "The Second Cup Ltd. Annual Report 2010" (PDF). Second Cup. April 14, 2011. Retrieved November 18, 2011. 
  2. ^ [1]
  3. ^ "Contact Us." Second Cup. Retrieved on September 13, 2011. "MAILING ADDRESS: Second Cup Ltd. 6303 Airport Road Mississauga, Ontario L4V 1R8" and "6303 Airport Road, 2nd Floor"
  4. ^ "Board of Directors". Ideaca. Retrieved November 18, 2011. 
  5. ^ "CEO Gabe Tsampalieros dies at age 61 following illness". The Star (Toronto). March 12, 2009. 
  6. ^ "The Second Cup Ltd. Announces Organizational Change". CNW Group. January 28, 2011. Retrieved November 18, 2011. 
  7. ^ [2][dead link]
  8. ^ a b "Second wind for Second Cup?". Canadian Business. 2011-04-25. Retrieved 2014-02-25. 
  9. ^ "Shows". W Network. 1970-01-01. Retrieved 2014-02-25. 
  10. ^ "Tassimo Launch « Second Cup". Secondcup.com. Retrieved 2014-02-25. 
  11. ^ "Tassimo | Second Cup TASSIMO | Second Cup T DISCs | Second Cup Coffee". Tassimo.ca. Retrieved 2014-02-25. 
  12. ^ "Second Cup". Facebook. Retrieved 2014-02-25. 
  13. ^ a b "« Second Cup". Secondcup.com. Retrieved 2014-02-25. 
  14. ^ "Second wind for Second Cup?". Canadian Business. 2011-04-25. Retrieved 2014-02-25. 
  15. ^ "Home". Rainforest Alliance. Retrieved 2014-02-25. 
  16. ^ Tim Hortons (2013-06-30). "Corporate Profile". Tim Hortons. Retrieved 2014-02-25. 
  17. ^ "Our Responsibility « Second Cup". Secondcup.com. Retrieved 2014-02-25. 
  18. ^ "Second Cup bomber jailed". CBC News. July 6, 2001. Retrieved November 18, 2011. 
  19. ^ Banerjee, Sidhartha (October 18, 2007). "Second Cup to review Quebec signs after outcry". The Canadian Press (thestar.com). Retrieved November 18, 2011. 

External links[edit]