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Section I -- Coffee Program

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Section I -- Coffee Program I COFFEE PROGRAM AND PROCEDURAL HANDBOOK Table of Contents INTRODUCTION..............................................................................................................2 The Specialty Coffee Industry ..............................................................................2 LaMar’s Coffee Program Launch ........................................................................4 Why Dazbog? .........................................................................................................4 COFFEE MENU AND RECOMMENDED PRICING ..................................................6 SUPPLIERS........................................................................................................................7 RECOMMENDED OPENING ORDER .........................................................................8 Basic Coffee Program Description .......................................................................8 Espresso Program Description .............................................................................8 Basic Coffee Program – Recommended Opening Order Sample Form ...........9 Espresso Coffee Program – Recommended Opening Order Sample Form ...12 OPERATIONS AND PROCEDURES ...........................................................................15 Coffee Bean Shelf Life .........................................................................................15 Brewed Coffee Procedures ..................................................................................15 Brewing Instructions – 10 easy steps ..................................................................15 Daily Cleaning Procedures ..................................................................................16 Weekly Cleaning Procedures ..............................................................................17 Service and Sales Reminders ..............................................................................17 AN OPERATIONAL GUIDE TO ESPRESSO .............................................................18 What is Espresso? ................................................................................................18 BASIC ESPRESSO AND ITALIAN-STYLE RECIPES .............................................19 Espresso ................................................................................................................19 Cappuccino ...........................................................................................................20 Cafe Latte .............................................................................................................20 Cafe Au Lait .........................................................................................................21 Cafe Mocha ...........................................................................................................21 LaMar’s Famous Latte ........................................................................................22 Iced Italian Soda ..................................................................................................22 Iced Coffee ............................................................................................................22 Steamer .................................................................................................................22 Creole Lait ............................................................................................................22 Americano .............................................................................................................22 Hot or Iced Chai Tea Latte .................................................................................22 Granita ..................................................................................................................23 TRAINING .......................................................................................................................24 COFFEE TRENDS ..........................................................................................................25 Types of Beans ......................................................................................................25 I-1 1-2012 2012 LaMar’s Donuts International, Inc. The Roasting Process ...........................................................................................25 Glossary of Terms and Pronunciations..............................................................26 ORDERING......................................................................................................................27 Coffee Order Form ..............................................................................................28 INTRODUCTION On the following pages, you will be presented with all the elements necessary to launching and building an approved private-label coffee program within your LaMar’s Donuts shop. The selection of Denver-based Dazbog as the coffee supplier means that not only will you be supplied beans that have been hand-picked by genuine coffee experts, but you will also be provided ongoing consultation and expert advice. As well, your LaMar’s franchise field representative will be well-versed in the LaMar’s private-label coffee program, and will be able to offer assistance, too. The Specialty Coffee Industry Since 1985, the specialty coffee business has risen from a multi-million-dollar industry to a multi-billion -dollar industry -- $3 billion in total. Specialty coffee consumption and sales in all channels are rising at a rate of 4.5% a year, and the Specialty Coffee Association of America (SCAA) reports that the coffee industry is not expected to peak until the year 2015. Today, 12% to 18% of all foodservice coffee is specialty, and this number is growing. The coffee industry as a whole is dominated by the United States, which generates more than $7.5 billion in coffee sales. Over a half-billion cups of coffee are consumed daily in the United States, and any market erosion normally occurs at the low end. While most retailers will pay approximately $7.00 per pound for coffee, LaMar’s Donuts International has negotiated a $5.50 per-pound rate for its custom-roasted blends. Because typical coffee usage is three ounces per pot, the cost per pot is $1.02. A pot will typically yield five 12-oz. cups of coffee, which gives a per-service cost of $.20 per cup. For specialty coffee, it is customary to charge $1.00 to $1.50 per cup, yielding a $.80 to $1.30 per-cup margin. Not only does the average coffee retailer enjoy a high profit-margin on I-2 1-2012 2012 LaMar's Donuts International, Inc. specialty coffees, but the coffees enhance the image and create an upscale niche for the company among its customers. The highest price recorded to date for a cup of gourmet coffee is $8.00, paid by a group of Philadelphia coffee connoisseurs at Ray’s Café and Tea House, according to Café Culture, a supplement to Restaurants & Institutions magazine, in October 1999. Nationwide, there are 10,000 retail coffee shops, but the SCAA predicts that there will actually be 15,000 retail coffee outlets by the end of 2000. The nation’s leader is Starbuck’s, whose annual sales topped $936 million in 1999, with a total of 1,500 units in the United States alone. A mail-order initiative and home delivery program, announced in 1999, are expected to increase Starbuck’s revenues by several percentage points. A July 2000 report revealed Starbuck’s same-store sales in June 2000 up 9% over its June 1999 numbers. New specialty coffee markets are being tapped, as older teens and college-aged consumers select varieties of chilled and milk-based coffee beverages. Topping the trend charts are espresso, latte, cappuccinos, iced coffees, and special blends. Positive coffee research has aided the industry as well; the American Medical Association released its 1999 findings that those who consume two six-ounce cups of coffee per day were generally less irritable, more socially advanced, and more self-confident and energetic than their non- coffee-drinking counterparts. Coffee drinkers were found less likely to suffer such medical problems as hypertension and diabetes, and are less inclined to take anti-ulcer, anti-anxiety, anti-psychotic, or anti-hypertensive medications. From an age perspective, gourmet coffee has broadened its appeal. In past years, there was a large influx of young consumers, primarily in the 25 to 34 age groups. This is helping to shift the gourmet consumer population closer to the median age for adults. Supporting this change in demographics is the fact that consumption of alcoholic beverages is declining in favor of non-alcoholic drinks – such as coffee. In addition, the segment of the population that traditionally supports coffee consumption (adults 45+) is expanding as a percentage of the population. I-3 1-2012 2012 LaMar's Donuts International, Inc. Eighty-four percent of cappuccino, espresso, latte and iced coffee consumption occurs outside the home, according to a study commissioned each year by the National Coffee Association. 1999’s study also found that the size of cup in which coffee is consumed is increasing, up from eight ounces to 12. And there is a clear propensity for higher-income college graduates to drink cappuccino, espresso, latte, and iced coffee. In 1999, the top-selling coffee flavors in the United States were, in order of preference, Vanilla Nut, Hazelnut, French Vanilla, and Irish Crème. LaMar’s Coffee Program Launch Until 1999, coffee sales and consumption within the LaMar’s Donuts chain was lacking
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