A competitive market is brewing in Winnipeg, with several coffee chains bidding over one another to acquire previously shuttered cafés in the city.
It’s the kind of trend food and supply-chain economists suggest is happening in municipalities from coast to coast, as vaccine uptake increases and COVID-19 restrictions are beginning to loosen.
Back in Spring, Calgary-based Good Earth Cafés Ltd. said it planned on nearly doubling its 45 locations across the country, just as Seattle-based Starbucks Coffee Company said it would close 300 Canadian sites before the beginning of summer.
One of those locations Good Earth was seriously eyeing included the former, incredibly popular Starbucks on Academy Road in Winnipeg, which saw lots of foot traffic prior to its closure.
Good Earth CEO Michael Going called it part of a "forward-looking" business strategy, that is striving for a future beyond the pandemic.
But another Winnipeg-based coffee chain which just launched this year, Empty Cup Collective, recently outbid Good Earth for that Academy Road shop.
"We saw an opening and we just absolutely went for it," said Marc Tallman, owner of the Empty Cup Collective, in an interview this week.
"I grew up in that area, and that Starbucks was my own personal place to go get coffee. In fact, it’s the same for pretty much everyone I know. So, of course, we jumped at the chance. Why wouldn’t we want to bank on this great location?"
Since opening its first site on Panet Road near Kildonan Crossing in April, Empty Cup has been on a hiring and acquisition spree.
Empty Cup has a new location opening in Sage Creek by early winter — bringing its Winnipeg-based cafés to three so far. It’s even expanding direct-to-retail sales of canned, nitro-cold brews that it currently serves on tap at its store.
'I grew up in that area, and that Starbucks was my own personal place to go get coffee. In fact, it's the same for pretty much everyone I know. So, of course, we jumped at the chance. Why wouldn't we want to bank on this great location?' ‐ Marc Tallman, owner of Empty Cup Collective
Tallman said this is because he believes in "the power of the coffee experience, which doesn’t need to rely on just drive-thrus to thrive." It’s why his emphasis has been on making his stores unique in their design and aesthetic, while also focusing on a larger menu.
Empty Cup’s Panet Road location is easily distinguishable for its modern layout and flooring, employing a chic monochrome colour palette for furniture and decor. Customers can sit on tall bar stools at the front-facing counter, watching their coffee being made, then enjoying their food and drinks with a view through the large windows in the back.
"Of course, we have had delays because of the pandemic and just otherwise with construction," said Tallman. "Our Sage Creek location was supposed to be done much earlier. But all in all, I’m really looking forward to what’s in the future for our in-store experience, and we’re just excited to keep growing out of this all."
Good Earth feels the same. CEO Going told the Free Press on Friday that he still plans on opening at least up to four other stores in Winnipeg, despite losing the battle for the former Starbucks on Academy Road.
"You win some, you lose some," said Going. "We have three other locations in the city already. We’re certainly not stopping from scaling up. And to be honest, if anything, the pandemic is delaying our plans because of real estate concerns."
Sylvain Charlebois, Canada’s leading food consumption and management expert, said both Good Earth and Empty Cup’s business acumen is "completely bang-on." He said it’s a great strategy to take over former Starbucks sites "while the market is still getting ready to be fully ripe."
"I’m not surprised about there being a heated café war of sorts," Charlebois said Friday. "The thing with the coffee businesses is that we all know Canadians won’t be stopping the culture of drinking their cups of joe outside their homes.
"What that now means is you have the biggest player in the market closing hundreds of their stores and an appetite that won’t go away. So, obviously, there will be a recalibration that will happen to fill that empty space. It’s a shifting thing that I’m seeing everywhere in different shapes — in Halifax, Winnipeg, Toronto and elsewhere."
Starbucks did not respond by press time for comment. The company closed hundreds of its Canadian coffee shops by March, which it called part of a "transformation strategy’’ to respond to changes in consumer habits during the pandemic, in an earnings call.
Since then, however, most of the stores Starbucks has chosen to close are ones that do not have a drive-thru, including those in Winnipeg. Charlebois said this makes sense "because it is quite challenging to operate a café without a drive-thru these days."
"But the real problem, drive-thru or not, will be to distinguish yourself from the legacy of Starbucks — which has a massive and loyal base of customers," he said.