A look at the rise of the forecourt coffee sector shows that branding is the crucial ingredient in blending the perfect roadside coffee.’,’none’,’ If rest stops with friends are the most memorable moments of road trips, then a hire car adventure across Thailand is a very welcome jaunt. Seemingly, there’s a place to put fuel in the car and coffee in human companions every kilometre or so. For those more accustomed to the depressing prospect of a motorway stop in Europe, with its unending concrete, dreary corridors and overpriced snacks, then a quick break off the Thai highways is an unfamiliar pleasure. There’s usually a collection of outdoor picnic tables attended to by a “name that dish” maestro whose sole purpose in life is to serve up perfect Asian food for less than a dollar. And coffee. Not the instant coffee that might be expected of a roadside convenience store, but a fine selection of locally sourced gourmet beans, made by an on-site barista. Welcome to Café Amazon, a brightly coloured and deeply refreshing coffee shop experience which is assiduous in its pursuit of excellence, and doing rather well as a result. Café Amazon is a coffee retail business owned and operated by PTT Group, Thailand’s foremost petroleum company. PTT’s Senior Executive Vice President of the Oil Business Group, Sarun Rungkasiri, speaks to GCR of the brand’s success, and also discusses the prospects this niche sector offers to independent coffee retailers. PTT has developed a fresh brewed coffee business under the brand “Café Amazon” with an aim to deliver complete convenience to customers at PTT gas stations. The initiative fits into the company’s concept ‘Life Station’, under which motorists will find PTT a one-stop station providing more than just fuel. Travellers can drop by Café Amazon and enjoy full-flavoured, reasonably priced Thai-sourced coffee in a fresh and easy atmosphere, with all the conveniences that would be expected of a city centre chain outlet. “It is PTT’s key policy to support the Café Amazon business and it’s an absolute requirement that all PTT gas stations have a Café Amazon,” says Rungkasiri. The marque has expanded rapidly, with 640 outlets nationwide, making it the uncontested leader in this segment in Thailand. In 2011, Café Amazon generated total sales revenue of 1.2 billion Thai Baht (around US$40 million). This year, sales are forecast to grow at around 15 per cent. The expansion plan for Café Amazon will follow PTT’s plans to open new gas stations in foreign countries, with Indochina a focus area. The brand has been a success largely because of its core mantra: Café Amazon venues are not surprisingly good for roadside coffee joints; they are surprisingly good for Asian coffee shops, period. The brand has attracted a loyal following of Thai youths who find a visit to Starbucks prohibitively expensive. Much attention has been paid to the detailing, so a visit is in no way an inferior experience to relaxing over an iced mocha in a leading chain outlet. There’s free Wi-Fi, floor-to-ceiling widows, bright and stylish furniture and a broad offering of ways to enjoy tea, coffee and blended fruit juices. “Café Amazon has an audit team working to unremittingly improve the standard of goods and services at the shop,” Rungkasiri explains. “The team inspects the quality of beverages and services, including the standard of locally sourced raw materials, the preparation of equipment, baristas and their ability, beverage mixing procedures and shop administration and management. We’re quite unlike any other bolt-on petrol retail business in this respect. The auditors also provide advice to the shops on a monthly basis,” Rungkasiri says. Café Amazon recognises that operators and employees are vital couriers, passing directly the value of the coffee shop to customers, and so focuses on transferring knowledge in the fresh brewed coffee business and upgrading service skills of operators to an international standard. While the roadside retail market may clearly represent an area of potential growth, a key question is one of profitability. In Thailand, these roadside locations outside of Bangkok offer good purchase cost value for developers, and that low initial cost base gives more headroom to deliver a quality outlet. Interestingly, Café Amazon was launched in 2002 almost with a non-profit remit; it was to exist only to complete the service offering at PTT’s gas stations. As Asia’s insatiable thirst for coffee becomes ever more emboldened, this small gap in the market is starting to be viewed as more of a potential growth area. Yet the gold-rush may be only just beginning. For petroleum companies, profits generated from retailing are marginal due to price tolerance limitations. Oil companies across Asia are thus looking for opportunities to increase incomes and that is why it’s possible to see a rising quality of these forecourt locations. Fresh brewed coffee is a service that meets the demand of customers in gas stations, and so it is a viable approach with strong potential for more growth. Now that the brand has become a success, it is tempting for PTT to push Café Amazon out into the cities, and it’s something they are starting to do. However, when asked about the landscape of competition, Rungkasiri gives a vivid explanation as to why the company has maintained its focus on being the coffee leader at forecourts: “In gas stations, our competitors include Caffe D’Oro and Inthanin. Outside the forecourt sector, then you’re basically up against Starbucks, True Coffee, Black Canyon and Coffee World.” Rungkasiri says he still believes that it’s now time to extend the reach of Café Amazon beyond the forecourts and into Thailand’s largest metropolitan areas. He agrees that there are “thriving and unceasing” avenues for growth for companies that are able to develop customer loyalty through their branding, which is a key consideration to overcoming saturation in the non-forecourt market. It’s a view echoed by leading food and beverage branding consultancy, Mystery Limited London. This agency is responsible for the branding of Caffé Italia and Caffé Ritazza in Western Europe, and is now receiving enquiries from firms in South-east Asia; small coffee retailers who are considering forecourt and roadside retail as a viable way to grow their own coffee chains in Asia. Dan Einzig, the company’s Managing Director, chatted to GCR by telephone while in Rwanda on another coffee retail branding mission. Reinforcing Rungkasiri’s sentiments, he says: “I see an increasing trend for branded coffee machines serving hot drinks to busy customers in service stations in our own portfolio of clients. I believe this will only increase over the next few years, and the quality keeps improving. However, for roadside outlets with real people serving real coffee, the opportunity is there to maximise your key advantage by training, encouraging and empowering your team to engage with customers in a meaningful, human way that machines never can. In competitive environments where product offerings are broadly similar, it will be the brands that connect with customers emotively that will thrive.” This is especially true in an industry like coffee retail, where the experience is as equally important as the product. The benefits that a strategically defined brand can bring are the same as when people fall in love with each other, Einzig explains. When customers connect emotively – because they share the same values and beliefs of a coffee brand – it leads to higher sales and better brand differentiation. It also leads to loyalty, advocacy and can even protect the retailer’s price in times when competitors rely on promotional discounts to drive sales. Just like with people, when
the relationship is strong, they often decide to start a family. Once customers are emotively connected with a brand, it gives the retailer the ideal platform from which to expand their offering. “This is why the forecourt sector is exciting, it’s largely untapped, and it’s something Café Amazon has done superbly,” says Einzig. Aside from PTT, other petroleum companies in Southeast Asia have been slow to respond to the potential growth market that exists on their own doorstep, opting instead to rent out space to chain retailers. Petronas in Malaysia is a good example; here is an oil firm with one of the largest profiles in the region, yet a stop at a Petronas filling station, in either Malaysia or Thailand, will have one guessing as to which brand of coffee shop will be serving a particular station. There is no comprehensive mandate for a similarly branded outlet at each forecourt. Here though, the growth prospects remain significant for a franchised, independent brand of coffee shops to step into the void and deliver a focused experience which is recognised as the roadside leader in the same way Café Amazon is in Thailand. Einzig spoke of the need for this key principle to be a part of a coffee shop’s brand development from the outset: “Start by defining your brand; review the service your café offers, pinpoint the space in the market it occupies and research the emotive and rational needs and concerns of your customers. Café Amazon looked at what people expected of the lifestyle coffee shop visit, took that concept and repackaged it, and dropped it neatly into these roadside locations. It is exactly the right approach.” Einzig explains that for small businesses, the best approach was not to try to mimic the look of chains or big brands. Instead, he suggests that independent cafés should try and carve out their own distinctive identity. There is a big consumer trend towards independent establishments, and several chains are trying to mimic an independent feel to capture some of that market.
Truly independent operators can leverage their status to attract customers who are looking for something more original and authentic which aligns with how they feel about themselves. The brand should always speak to customers with a consistent tone of voice. Einzig says it will help reinforce the business’s character and clarify its offering. That expectation of an authentic experience has been a key driver behind the growth of PTT’s coffee business. Cafe Amazon continues to pursue its diversified growth plan, and with the underlying brand fundamentals already established, its future profitability looks to be well supported. “Your brand character should promote your business, connect with your customer base and differentiate you in the market,” says Einzig. “That is how you appeal on every level.”
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