When you walk through the door of your favorite café, you’ve probably already decided what you’re ordering—whether it’s a medium latté with whole milk, a double shot of espresso, or a simple cup of the light roast. But that’s just the beverage side of the equation. These days, your local coffee shop just might have the best pastries in town, a killer breakfast sandwich, hearty seasonal soups or even a full-fledged entrée like roasted chicken. Cafés understand that food (not to mention clothing and other add-on merchandise) make up a significant portion of their profit margin—about 19 percent, according to this small business research report—so they better be offering more than just coffee if they want to stay in business. The question is, how much food to sell? And what kind?
The fundamental business question about menu is whether added items will draw more business, or dilute the existing customer base. Nonetheless, successful café startups agree on one thing—stick to what you do best, and add other items as demand dictates. Otherwise, you may find yourself imploding under the weight of too many menu items, requiring extra time to prepare, extra square footage to store, and extra (and often expensive) equipment to assemble, clean and maintain.
Popular journalist Peter Baskerville, who has written extensively on his string of successful café startups, concurs, “Limit the assortment,” he says, because “a wide choice for most people creates anguish.” He suggests keeping various categories (food, coffee, other) to three items—a “greatest hits,” as it were.
The Lure of Expansion
Contrary to the conventional wisdom of “keeping it simple,” many coffee shop owners are trying expansive menus. A 2012 study of the café/bar landscape reports that small coffee shops, in an effort to compete with larger players, have followed their example of offering flatbread sandwiches, pizzas and other assorted snacks.
Will the risk pay off? The jury is still out. While the decision to add restaurant-style meal items to a menu brings a host of challenges, it also offers two distinct advantages—it allows the traditional coffee shop to break out of its long-established daytime hours and expand into the evening scene, since patrons can now expect to find realistic options for dinner food; and it encourages more beverage sales, as sales of food (particularly hot and/or salty items) tend to make customers thirstier. In the latter case, the café now styling itself as a restaurant can potentially tap into every owner’s dream—business creating more business.