Cafe Situational Overview in Today\'s Market Environment,

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Situational overview

In today's market environment, widespread interest in healthy, sustainably-raised food products has coalesced in an explosion of demand for fair trade products -- the kind of coffee that can be found at Just Us! cafes. Fair trade is a specific market arrangement in which retailers deal directly with Third World purveyors to ensure that the sellers receive fair compensation for their product. Retailers offer purveyors mentorship in surviving in the competitive market economy. Just Us! Cafe is a Canadian coffee retailer that makes use of this arrangement to craft its core brand identity. Fair trade is not simply a 'side business' or one aspect of the Just Us! brand -- it is part of the foundational concept and mission behind the organization.

State of the market

The socially-conscious Canadian buying public has been particularly instrumental in making fair trade a more popular way of doing business. However, consumer tastes are fickle, and there is an increasing interest in local, versus imported goods, regardless of the ethical nature of fair trade products. Also, other companies have entered the fair trade market, including large purveyors like Kraft as well as other local Canadian companies.

Just Us! feels that the market for fair trade is not supersaturated. Additionally, it believes that there are different levels of fair trade, and that its small firm has a uniquely ethical arrangement with its suppliers. That is why Just Us! has recently expanded its offerings into cafes, which the company's founders believe can better educate consumers about the product as well as promote the brand. Each coffee shop is tailored to suit the needs of the local population, rather than provide standardized service like Starbucks.

Franchising Just Us! has been less successful, given that the operations of franchisees tended to dilute the brand. Without giving consumers a strong ethical incentive to buy Just Us!, the coffee shop chain floundered in Toronto. Even in more successful areas, such as the sites where Just Us! was attempting to host local talent in performance spaces, along with selling coffee, there was intense competition from local coffee shops as well as big-name chain stores able to sell cheaper coffee at volume. Stores like Starbucks also have cheaper fair trade lines.

Strategy

Clearly, Just Us! must stay true to its principles and brand image, because it cannot compete on price. It must also hold onto its core demographic. The target consumer for Just Us! is young, well-educated, and well-off enough to pay a premium for fair trade products. Coffee, like chocolate, is a product that these consumers are often willing to pay additional money for, because of their fondness for the product and the 'experience' of taste it offers. Cafes offer additional experiential value for the consumer. The target consumer is attracted to the fact that Just Us! makes business decisions not simply based upon profit considerations, but also because of the need to help specific nations and causes, such as its show of solidarity with oppressed persons in Guatemala who would benefit from the proceeds of the coffee sales. Using such causes to sustain interest in the product is essential, because it may be the tipping point for a consumer making a choice between Just Us! And a solely locally-focused competitor. The positive feeling that the purchase of Just Us! is for the social welfare of others is an additional value other brands cannot offer.

Just Us!'s ethical standpoint differentiates it from its competitors. The product also tends to be of a higher quality, far superior to that of ordinary coffee, given that fair trade coffee is from small, boutique-style production facilities that can give a great deal of attention to each phase of the process. This means that not only must the production process and relationships with purveyors remain principled, but the overall quality of the coffee must also remain high for Just Us! To retain its customer base. Another bonus of Just Us! is the fact that it has cultivated good relationships with suppliers, because of the fact it is a high-margin product. Local customers in Nova Scotia are loyal to the brand, and it has a high level of brand recognition. There is also still a demand for a vibrant 'coffee shop' culture amongst the population. All of these factors can be capitalized upon to sustain demand, if quality is maintained.

However, fair trade demand has spawned many competitors which seek to compete with Just Us! On its own terms, such as Trident Bookseller & Cafe, which offers a unique coffee shop 'experience' combined with fair trade products and similar ethical branding as Just Us! Other competitors make use of different business models, such as selling at volume (like the franchises Tim Horton's and the Second Cup) while attempting to capitalize upon their specific fair trade lines.

Recommendations

There is undeniable risk in expanding without being able to compete in terms of offering a unique product or upon volume sales like a large, national chain. Additionally, although the fair trade market is still vibrant, it is undoubtedly maturing. Even if there is enough demand for fair trade coffee at present to sustain an expansion, will this be the case years from now, when the locavore movement has grown more strident? What could new Just Us! coffee shops truly offer the consumer that is innovative and are currently not offered by Just Us! At its current locations?

Offering non-fair trade coffees such as seasonal blends at the current line of cafes is another suggested option to draw new consumers, but that would likely only serve to dilute the company's image, and make it seem like a more highly-priced Starbucks. Just Us! must stay true to its mission and value statement. However, cultivating relationships with local food purveyors to offer unique baked goods would be one way to capitalize upon the 'locavore' trend, and concerned consumers could pair those products with the fair trade coffee that has cemented the Just Us! loyal consumer base. Just Us! could also more aggressively promote products tied to specific causes at its stores, to underline the fact that purchasing fair trade coffee helps people all over the world, and that consumers need to have a social conscience when they spend their dollars.

College students offer another untapped demographic for Just Us! While students traditionally have less money than other demographics of consumers who drink coffee at cafes, students tend to be sympathetic to Just Us! ideals and drink large amounts of coffee, often at all hours of the night. Offering students discounts or special promotional offers around exam time (such as bottomless cups) does not simply increase sales in the short run. It also cements consumer buying habits at a young age -- a loyal consumer in college may become a consumer for life.