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Scooter’s Coffee discusses chasing the number one drive-thru position

Scooter's Coffee

Scooter’s Coffee’s Senior Vice President of Supply Chain Nick Jarecke on managing rapid expansion and chasing the number one drive-thru position with a fast, friendly, and focused approach.

Few roasters have grown as rapidly in the past 18 months as Scooter’s Coffee. While some consolidated and went into survival mode, the Nebraska-based company was looking for new opportunities, new franchisee partners, and new members to grow its ever-expanding leadership team.

The coffee chain operates in 27 US states and is on track to advance its growth to more than 1000 stores by 2024, with its 600th location scheduled to open by the end of this year. Scooter’s Coffee has experienced natural growth in the Midwest and East of the US, with active growth in the South and Southeast contributing to its national expansion goals, and number three position in Franchise Time’s ranking of ‘smartest-growing brands’.

Senior Vice President of Supply Chain at Scooter’s Coffee, Nick Jarecke, says the company’s leadership team has reflected on why the company is growing so fast, but as it describes in its latest brand positioning, “There’s Just Something About Scooter’s Coffee”. “There’s something that captivates and drives our customers to be loyal and consistent,” Jarecke tells Global Coffee Report.

“We sometimes look back and don’t realise how much we’ve scaled and that’s a positive thing because as we grow and accelerate, the pace should feel slower, and that makes us want to go faster. There’s a bit of an ‘underdog nature’ of who we are that drives me.”

Co-Founders Don and Linda Eckles opened the first Scooter’s Coffee drive-thru in 1998 in Bellevue, Nebraska, naming the business after the intention of helping customers to “scoot in and scoot out” quickly.

“In the first 20 years of the company, we had about 100 stores slowly growing, but in the last four to five years we’ve really grown exponentially,” Jarecke says.

“There’s a momentum of our brand in destinations where it’s needed and desired. Being a drive-thru concept with a fast and friendly business model just resonates with our customers.”

To support the company’s rapid expansion across the United States and its mission to support underserved communities in specialty coffee, Scooter’s Coffee operates five distribution centers in partnership with Harvest Roasting, its own vertically integrated supply chain division.

“We view our distribution network as an extension of our relationships. Last year we opened our Dallas distribution center and most recently one in Atlanta,” Jarecke says.

The positioning of each center is logical and calculated to help minimise the lead time franchisees receive stock and target new demographics. Coffee is bought direct through Harvest Roasting, and roasted, packaged, and distributed from its Omaha headquarters via its own truck fleet.

“This setup differentiates us from some models in the industry where they use other distributors. It’s because of our vertically integrated system that we can ensure our coffee is roasted and distributed to our stores in a matter of weeks, which is a very short timeframe,” Jarecke says.

“One of the commitments I really appreciate about the company is that both organisationally and structurally, we’re investing our resources ahead of needing it so that we’re in a proactive nature and can control the growth of the company, accelerate, and go faster. We don’t view being fast as a negative. We view it as an opportunity to meet more needs and accelerate decision making.”

In each distribution center is a warehouse for storage and distribution of supplies, and a training kiosk for franchisee education and support.

“People are really excited about our brand and the convenience drive-thru-only model. We are a brand that identifies with the American dream. Our franchising model is profitable and resonates as a need. It shows franchisees they can control their own destiny. If we can continue to build upon that American dream and help people be successful, and appreciate the service and products we provide, it will serve us well,” Jarecke says.

As the company expands its network nationally, Jarecke says more people are exploring the franchising concept and connecting with the idea of a holistically owned and integrated supply chain that provides opportunities, such as the chance to meet farmers at origin.

“It shows the commitment and the intentionality of the company. It’s more than just franchise support, and our customers buy more than a franchise. They’re also getting a supply chain and an extended coffee relationship,” he says.

Scaling up

Part of the extension is maintaining Scooter’s Coffee quality to ensure each franchisee who invests their future and life savings with the company, is successful and can deliver on their commitments to customers.

It all starts with having a quality raw material. Then, Jarecke says it’s about investing in the right equipment and ensuring its processes can handle and deliver a high volume of coffee consistency to stores throughout the country.

“One of our core company values is humility. Our humility needs to shine through with the quality of our product. We sell specialty-grade coffee. We can tell you how great it is, but we want that to come through in the cup and the fresh espresso shots we serve,” Jarecke says.

He adds that part of maintaining a quality output is balancing risk management around adverse weather patterns at origin, being agile to sourcing conditions, and maintaining close producer relationships.

The coffee chain operates in 27 US states and is on track to advance its growth to more than 1000 stores by 2024, with its 600th location scheduled to open by the end of this year.

“I come from an agricultural background, so I have an appreciation for farming and the lifestyle that requires. It’s not a lucrative lifestyle, it’s a commitment. We really consider it a stewardship-sort of relationship. Our relationships are not transactional. They are an extension of our business,” he says.

“The farmers know that we’re committed to long-term growth. Our entrepreneurial approach helps them build their business. Ultimately, our relationship is only as good as the actions we demonstrate. Love is a core value for the company, so how do I show love to our farmers? That’s through commitment to them, and it’s how we treat them when coffee is US$2.25 a pound and how we treat our coffee farmers when it’s US$1 per pound. If it’s just about money, then it’s not a long-term relationship.”

When it comes to roasting, Scooter’s Coffee chooses to celebrate its beans rather than treating it as a commodity, using a Probat and Jabez Burns 23R roaster at its Nebraska factory.

“Probat has been a great partner throughout the process to help us scale as we protect our specialty coffee quality,” Jarecke says.

At its franchisee shops, Scooter’s Coffee uses Franke semi-automatic espresso machines, which Jareke says has helped drive the speed, volume, consistency, and quality its shops must deliver. “We’re always going to be looking to our equipment partners to continue to drive our value proposition. We have to embrace a culture of continuous improvement,” he says.

That improvement includes having franchisees serve their customer within 30 seconds of window interaction. “Amazing People. Amazing Drinks. Amazingly Fast. That’s our brand promise,” Jarecke says.

The challenge, however, is a balancing act of increasingly customised orders but delivered at speed. “We have to be aware of market trends and be ahead of that. Ultimately, we want our customers to be excited about the products we offer but we also want to listen and understand their needs,” Jarecke says.

What must remain consistent, however, is Scooter’s Coffee’s commitment of creating an “amazing experience” for customers, and franchisee partners.

“We have an opportunity to interact with drivers at our stores every day and make a real impact. But is their relationship with the barista a positive and meaningful one?” Jarecke asks. “And comparing all the other distribution and supply chain companies out there, would [our franchisees] think we’re the best? My ambition is to always surpass expectations. We want to be the number one drive-thru experience in the world, and the best supply chain franchisees interact with.”

To get there, Jarecke says the company must continue to grow and remaining true to its core values of integrity, love, humility, and courage.

Jarecke acknowledges there is lots of competition in the drive-thru sector. Starbucks may have pioneered the drive-thru industry and is seen as a “formidable peer”, but Scooter’s Coffee is determined to play to its strength of being customer focused, and fast.

“The drive-thru space is highly competitive. It makes sure that we stay focused on what we do and keeps us focused on being better,” Jarecke says.

“Spaces of real estate that would have previously gone unchallenged now not only has coffee competition, but it has QSR (Quick Service Restaurant) competition. That’s a huge challenge in the space.”

And that’s not all. Factor in rising freight prices, economic pressures, and a slow return to the office space post-pandemic. As such, Jarecke says Scooter’s Coffee must continue to create desirable products that are not just value decisions but products that become part of a customer’s routine and an extension of their lifestyle.

“We’re yet to understand when the pandemic end and how people’s work-life balance will continue to change. I think honestly, knowing that the world is not static anymore, is something we need to embrace. We have to consider how we become dynamic as a company, and constantly improve but also stay committed to who we are,” he says.

A connected leader

Jarecke has been working with Scooter’s Coffee for the past three years. Prior to joining the business, he forged a career in food manufacturing and the production and scaling-up of businesses, including Kellogg’s, Nestlé, General Mills, and Tyson Foods.

“What really attracted me to the Scooter’s Coffee brand was the opportunity to have a dedicated customer set, and the opportunity to help scale the business and support high-quality ingredients for our franchisees, such as our coffee and goods we bake ourselves. Having that quality control is really important to us,” Jarecke says.

He says being a leader of the Scooter’s Coffee team is a humbling experience and an opportunity to be a stewardship of the company’s growth and values. And while the world continues to face social and political challenges, Jarecke hopes customers will find solace in a daily Scooter’s Coffee across the US, served “amazingly fast”, with a smile.

“We just want to manifest love in our drive-thru lane. There’s a lot in our life we can’t control but we can control that,” Jarecke says.

This article was first published in the September/October 2022 edition of Global Coffee Report. Read more HERE.

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