Clover: return on investment

[Rich Westerfield]

Maybe this merits a new topic...

You folks using the Clover in service with customers (I'm assuming all but PeterG are doing so), are you confident that you'll get payback for your investment? Anything to relate regarding increasing sales of varietals/CoE cups since you've began using the Clover? What's your estimate of a B/E timeline?

Our market probably isn't ready for this (press pots are still a novelty here), but we'd like to know if they're making a difference so as to plan for one (or not) when designing shop #2. Thankee.

[nick]

Rich,
During the 'cup-quality-obsessed' discussions about the Clover, the business-side of things does often get left out in favor of more esoteric stuff.

That being said, here's a short list of a few things that had immediately crossed my mind or had been discussed by others as far as R.O.I. is concerned... let's call them each 'opportunities':
The opportunity for...
1) higher pricing for Clover-brewed coffee vs. drip-brew-and-hold coffee
1b) increased sales through improved cup-quality (clarity, not 'sitting around in an airpot,' etc.)
2) increased whole-bean coffee sales due to accessibility of drinks brewed from as many varietals/blends as you wish, rather than just the one or two that are usually 'practical.' More varied exposure to varietals would provide more opportunites to present the different offerings
3) (this is a big one) no waste. Little to no coffee would end up dumped because it was held too long. We did the math, and for either one of our shops, we'd pay for a Clover-1 in a year just based on the amount of coffee dumped down the drain.
4) differentiation. We're always looking for more ways to illustrate and enhance the difference between a quality-focused cafe, and the Great Unwashed.

The Big Question from a retailer's perspective is gonna be how the customer base ends up thinking about the Clover. I mean, will it be relegated to something that's mostly valued by the relatively small community of coffee-enthusiast types? Will people stop talking about the Clover and just appreciate the coffees? Maybe they already are... I dunno.

I think a big next-step in the implementation of the Clover, is if and when a coffeebar (that sells a significant amount of drip... like about 50% of all coffee beverage sales) totally replaces other drip-style brewing with a Clover (or multiple Clovers). Again... this might have already happened... i dunno.

[Mike Paras]

I would be curious to know how much use the Clover at Intelly Millenium Park is getting. It is not very visible, and I am not sure how many people who go in actually realize they can get a cup of brewed coffee made just for them.

[Alistair Durie]

The Clover, when combined with our focus on single origin coffee's, has done more for our coffee business than any other upgrade or change we have ever made.

Customers are paying much more attention to their cup of coffee. They are more often drinking their coffee black. They are respecting staff as coffee professionals, they are asking more questions, they are buying more coffee, they are paying more for their coffee, they are telling more people... and they are understanding the taste difference between origins and making up their minds which coffee's they personally prefer.

[aaronblanco]

nick: you think a year for roi? i guesstimated (see link below) maybe around 9 mo's...just spitballing in my mind. any current users have any hard numbers they are seeing and would care to share?

http://coffeepress.blogspot.com/2006/05/what-are-costsbenefits.html#links

[Alistair Durie]

a good excersise in this whole r.o.i. thing is to add up your gross sales in brewed coffee. take that number and then look at increasing it just by 5 or 10%.

the exercise of analysing how quickly your equipment can be "paid off" is very narrow business vision.

this is about long term growth and cultivation of your team and customers. look at these things and the Clover becomes a powerful tool that is actually quite a bargain.

[onocoffee]

Gosh, I hate to play on this topic but it's been a major question in my mind since the Clover was introduced last year.

While all of this thinking, introspection and coffee tasting may be about the long term growth, the necessary nine thousand dollars needed to buy a "one group" Clover is incredibly significant for most operators on here. We're not talking about a Linea 3EE that can theoretically prepare three drinks simultaneously for the same price. It seems that we're talking about a machine that will prepare one drink every 30-60 seconds and perhaps require a separate operator.

Nine thousand dollars.

No matter how you look at it, that's a lot of cash to spend.

A sub-$4K Clover would almost be a no-brainer. I might've even run out and bought one today - on impulse. But nine grand demands that you think seriously about spending.

For those of you who are actually using a Clover in retail operations, are you actually charging more for Clover brewed coffee? Has the Clover replaced your drip brew program? Are you seeing a quantifiable increase in either Clover cup sales or whole bean sales because of your Clover program? If so, what percentage of an increase over what period of time?

Nick has said the amount of coffee Murky would save over the period of a year would pay for the Clover. If this is the case, when will the Clover replace the current Fetco setup?

More importantly, if a company like Murky replaces their Fetco brewers with a Clover, will one Clover be enough to keep up with their morning rush? Or will multiple Clovers be necessary to maintain their current pace? If so, we're now talking about an $18K, $27K or $36K investment for 2, 3, and 4 Clover machines. Forget justifying the expense, whose company will be the first to commit that level of capital to a Clover program?

I personally have had very limited experience with the Clover. From my initial tasting, I think there are incredible possibilities with the machine, but an as operator, some of the feedback I've heard gives a bit of pause.

Outside of the price, the field reports seems to suggest that the exacting controls of the Clover make single cup brewing as complex as espresso shot pulling. On an operational level, is this a good thing? Consider the standard Fetco whose brew temp has already been preassigned and your staff knows to grind at that setting and just hit the switch and it's off and running. Four minutes later, you've got a gallon of drip brewed coffee and are ready to handle the morning rush.

With the Clover, I imagine a busy cafe would need to dedicate one person just to operate the Clover. If so, this means additional expense in terms of labor and additional compensation. Your crew of three now needs to be four. At ten bucks an hour (plus employer contributions) how does this impact the Clover equation?

I like the Clover, I really do. I'm an interested fan from a coffee perspective but I'm not won over from an operations perspective, but I want to be. I'd like to hear more from those of you who are using the Clover on a daily basis - especially if the Clover has replaced your drip brew program.

Help us believe!

[Kyle Glanville]

More importantly, if a company like Murky replaces their Fetco brewers with a Clover, will one Clover be enough to keep up with their morning rush? Or will multiple Clovers be necessary to maintain their current pace? If so, we're now talking about an $18K, $27K or $36K investment for 2, 3, and 4 Clover machines. Forget justifying the expense, whose company will be the first to commit that level of capital to a Clover program?

I think you'd have to design your bar flow to accommodate for the Clover. A 1 group can pump out drinks as fast as an espresso machine. Eventually they're going to introduce a 2 group, which, with a dedicated operator at rush, should be able to CRANK out volume.

In its current iteration, the payback is in selling whole beans. The degree to which you can engage every customer is awesome. Just watch Artigiano blow up when they throw out the #1 Brazil. All coz of the Clover, baby.

[Lindsay Parker]

The Clover has certainly exceeded my expectations and I set them at an optimistic high. The Clover has certainly done what everyone hoped it would, at our location and I've heard similar results from other Clover users. It provides a greater tasting cup resulting in customer satisfaction and return, and an increase in whole bean sales.

We are able to price our CoE's at a higher price with no complaint. Explain and educate the customer all about CoE and the Clover and they are almost instantly Clover/CoE only customers. A substantial amount of our CoE whole bean customers are those who are Clover regulars.

Daily in the afternoon during a certain wide time bracket when we have run low on brewed drip and the demand has slowed we move on to 'Clover only', our drip brew program stops. This results in no waste of coffee/money. As we move on to 'Clover only' we continue to offer a nightly special with the same price as the brewed drip would. I am eagerily awaiting to see what a Clover with multiple groups could do if it were to completely replace the drip brew program.

I believe that with the proper introduction to customers regarding all there is Clover it is absolutely worth the cost. Having staff that are excited and knowledgeable about the Clover and the coffees being used in it make a huge difference.

The Brazil Santa Ines CoE # 1 went on the Clover yesterday with higher than expected sales. There are people coming from all over to give this coffee a try and the result is an introduction to the Clover for most of them. Certainly I would hope that they ask questions about the Santa Ines but also the Clover, because the Santa Ines won't last long but the Clover is here to stay.

[Robert Goble]

Think of the press generated by the clover for its operators --- check out this link about the clover and the COE's at Artigiano. Your local papers are all itching for excuses to write living section articles about things like a clover -- so think of it his way: buy a clover, get free press coverage. What's that worth?

http://www.dogsoverlava.com/images-for-web/ArtigianoVanSunJune10-06.pdf

I posted the same link in the COE Brazil thread too.

[Rich Westerfield]

Great conversation and exactly the types of things we were hoping to hear discussed. The drip waste is a good point and one we hadn't figured in our numbers.

To Robert's point on PR, we were just featured with a full page in one of our two local dailies. Guy who reviewed us didn't even like coffee... talked about our panini and the chai he ordered.

He said nice things, but we wanted to scream.

In 18 months we've been mentioned seven times between the two papers. Best post-release traffic we got was from stories regarding our entrants in the MARBC and USBC. However, the pattern on all press has been a quick blip and then back to normal.

So the benefit of press coverage is pretty far down our list of benefits. We think it'll always be WOM (word of mouth) that carries the day for us.

In our current situation, it's probably a better move to more groundwork in the region and uncover more of the H-Bs and uber-geeks and get them used to coming here for CoEs and exclusive microlots brewed as pour-overs, press or SO espressos/Americanos. Once we're on the radar of the high-end coffee drinker, then we can think about investing in a Clover and making our money back in a reasonable timeframe.

So that's likely what we'll be doing in the short term - getting CoEs from Intelly and others and nuturing a hard-core group of fanatics who will become (hopefully) our region's opinion-leaders.

[onocoffee]

Was chatting last night with a friend who's planning on installing the Clover in their shop over the next several months and he's got some interesting numbers regarding the unit.

Evidently, with sales of at least 100 Clover cups per day, the Clover can pay back it's investment within 40 days - that's with a minimum keystone markup on costs per cup.

While I keep hearing positive reports about the coffee, I'd like to hear reports about the revenue generated by the Clover because, in the end, as much as I desire to serve the best coffee around, I still have staff to pay, bills to pay and a business to remain profitable.

[Alistair Durie]

It sounds like you want some magic numbers Jay.

Only you can measure your return on investment, given your space, how you plan to feature your offerings and many other variables. Its your business, its your market.

I think you will agree that if coffee is your focus, you'd better have damn good coffee. So, do you want "just regular drip" on tap, or do you want "your choice of single origin coffee's - fresh ground and brewed by the cup"?

Many customers will greatly appreciate the options, the freshness and the quality, and be drawn to the uniqueness of what you have to offer - even pleased to pay a little more for that.

Others will not.

The market is yours to cultivate. What kind of customers are you looking for?

[Robert Goble]

Another big plus for the Clover is this: Not only does it fully allow you to break the bold/light paradigm (a duality) -- it replaces it with vertical pricing . Brewing on demand by the cup allows you to present your offerings as a vertical with several "layers" of price for customers to surf. For most retailers, this is the first time that price will be a point of differentiation for a "regular" cup of coffee.

In terms of observed behaviour -- watch how fast your customers move up the vertical. You offer 3 coffees priced like this: $2, $2.50, & $3.50 --- Your regular cup price was always $2 ---- well watch your customers ignore the $2 price and move themselves and their selections up the vertical. Watch revenue grow (holding unit sales constant). Watch unit sales grow as customers curiosity drives them to compare one coffee to another (they drink more cause they gotta know what that more$ coffee tastes like). Watch the dialogue about specialty coffee grow with your grassroots coffee drinkers. It doesn't take much imagination to see how this with increase yor revenues.

I'd say if you have decent volumes and/or if you are interested in growing the coffee side of your business (and making a higher return on a per cup average) -- take the leap of faith. Not the Rev. Jim Jones drink the cool-aid at Jonestown leap of faith --- more the Morpheus has just offered you the Red Pill/Blue Pill Matrix leap of faith.

[Kevin Cash]

Wow Robert, that is a great observation. With my small shop and relatively low volume, it almost makes the Clover seem practical. I had a chance to brew some different coffees on Friday, even some Hacienda La Esmeralda Geisha, and was very impressed with the clarity. I'm planning now for a Clover to replace all of my drip in the next 9-12 months.

[Jim Schulman]

Intelly, at the Millenium Park store, charges more for Clover cups than for regular brewed coffee, and varies the price by the coffee. The Clover board is a lot like looking at a whole bean board -- the name of the coffee and the 12 ounce and 18 ounce cup price.

However, I'm always so busy schmoozing with the employees or whoever is with me, that I haven't sat down and watched to see how customers are reacting to it.

[redzuk]

Its ridiculously overpriced, like the versa lab. A coffee shop has to be making obscene amounts of money to justify the price of a clover.

It might be worth it if you get the first clover in the neighborhood. From a business sense i could only justify it as an advertising gimmick.

Has anyone tried to put a large custom pf on an espresso machine that could acomplish the same thing as the clover.

How about attatching a lever to an Aeropress? You could mount it in or behind a real impressive looking shell.

Or put the hippies to work, pay them .25 per cup to brew an aeropress, $9,000 would get me about 36,000 cups of coffee, and they would probably just use their quarters to buy coffee from me. Call it the Hippy Press

Seriously, it is my goal to get rid of the airpots. For $9,000 it would need to be able to brew atleast 3 12oz cups at a time and have fully automatic dose and grind ability.

Carl

[Kyle Glanville]

Its ridiculously overpriced, like the versa lab. A coffee shop has to be making obscene amounts of money to justify the price of a clover.

It might be worth it if you get the first clover in the neighborhood. From a business sense i could only justify it as an advertising gimmick.

Has anyone tried to put a large custom pf on an espresso machine that could acomplish the same thing as the clover.

How about attatching a lever to an Aeropress? You could mount it in or behind a real impressive looking shell.

Or put the hippies to work, pay them .25 per cup to brew an aeropress, $9,000 would get me about 36,000 cups of coffee, and they would probably just use their quarters to buy coffee from me. Call it the Hippy Press

Seriously, it is my goal to get rid of the airpots. For $9,000 it would need to be able to brew atleast 3 12oz cups at a time and have fully automatic dose and grind ability.

Carl

Are you talking about the same machine?

[Matthew Brinski]

Its ridiculously overpriced, like the versa lab. A coffee shop has to be making obscene amounts of money to justify the price of a clover.

It might be worth it if you get the first clover in the neighborhood. From a business sense i could only justify it as an advertising gimmick. .......................
............................................
Seriously, it is my goal to get rid of the airpots. For $9,000 it would need to be able to brew atleast 3 12oz cups at a time and have fully automatic dose and grind ability.

Carl

Offer great coffee, educate the consumer, and I think the notion of it being a gimmick weakens.

[redzuk]

hey Kyle

Any machine really. I'm not putting a value on the personal satisfaction of brewing an exceptional cup. I've never had coffee brewed on a Clover.

If your shop is doing $3,000 a days in gross sales, yes it makes sense to get a clover, you have an established customer base and it could add value, its a good addition to the drip equipment. If your shop is doing closer to $300 per day (the other 99%), is the clover going to have any significant impact on getting you to that $3,000 per day goal, not in my opinion.

I mentioned the aeropress because i've found it capable of brewing great coffee. The basic concept is simular, a large coffee dose (relative to typical drip brew), a little pressure. it just amazes me how something so simple works so well.

I dont see a $9,000 one cup brewer as being cost effective. Have you ever been stuck on a bar with a one group espresso machine? A tough way to make money.

I though about it this way:
$9,000 loan 3 years 7% interest
$278 monthly payment
5 day week= $13 per day to pay for clover
20% profit margin on a $2 cup of coffee= 40 cents
or 32 cups per day to pay for the clover.

Will just owning the clover generate 32 customers everyday on its own? Can you get $2 for a 12oz cup of coffee? Yes you are targeting the ideal customer, and if you can get 3 of those 32 to buy a bag of whole bean then its a good deal. Great espresso will satifsy most the customers. The clover is new and exciting but will it put 30 people in line for coffee everyday?

Carl

[nick]

Five words to live by:
Don't be a playa hater.

[Jeff Givens]

Five words to live by:
Don't be a playa hater.

I don't see where redzuk is hatin'. I would hope that anyone who is considering investing that kind of cash into their business would ask themselves the same question.

The "ridiculously overpriced" comment is pretty subjective though. Without a doubt, the folks at Clover Equipment have a lot of money tied up in R&D and have to get it back somehow. That being said, the admission price to the Clover club is a hard pill to swallow.

[Robert Goble]

he lost me at aeropress.

[Kyle Glanville]

That being said, the admission price to the Clover club is a hard pill to swallow.

Certainly a tough pill, but he hasn't even tried the coffee!

[Mark Prince]

Certainly a tough pill, but he hasn't even tried the coffee!

Some of us have though.

I'll be the (vocal, at least) minority here and say that, out of at least 200+ samples of Clover brewed coffee sampled all over the world, since first trying it at the Speakeasy Seattle, SCAA 2005, I've been wow'ed by a total of three samples (once in Charlotte - Batdorf's booth, once in Bern - dunno the coffee, and once at Elysian, again, dunno the coffee); impressed by maybe a half dozen more, neutral on maybe 50% of them, and frankly, let down by the rest. And I've had lots of stuff through the machine, from CoEs to the Panama especiale.

And while some may find this hard to believe - everytime I try a Clover brewed coffee, I try approaching it with an open mind; though I do admit it's getting more difficult. One thing I have been working on is trying to approach the Clover in a whole new way. I'm still tainted by the early ravings, before anyone had one in their shop, about how it was the ultimate in brewed coffee, presenting everything in the cup. Lately though, I've been appraching it more as a machine that just brews this wonderful substance known as the roasted coffee bean, brews it in a way that presents the bean differently... and that seems to help a bit.

Regarding whether it pays off or not, it may very well pay off in a short run. Who knows - those who have it seem to me to be a bit secretive on that aspect. Line them up in a cafe that can run the Clover at capacity without too much care rinsing and cleaning between uses, or fiddling with test brews, and chances are, it will pay off in a short while. Run it below capacity, as some owners are doing, and it may take years.

Robert's talk about vertical pricing though - that's probably the most interesting viewpoint about the Clover I've ever read, and it makes perfect sense.

It also makes me sad. Sad because it doesn't seem quality driven - seems more like it is status symbol driven by maybe the majority of consumers who just don't want to be seen buying the "cheapest item on the menu".

Mark