Part 2

The Daily Grind Coffeehouse was founded in 2007 by two friends who love nothing more than a hot cup of joe. The company has always prided itself on putting quality rstfrom the beans they brew to the knowledge and friendliness of people who serve it. Their goal has always been to be the coffee shop that makes the absolute best cup of coffee in town. They strongly believe in fair trade and donate 5% of their prots to support the communities of their farming partners.

Over the last 15 years, The Daily Grind has managed to grow from a single storefront to a local coffee chain with eleven brick-and-mortar locations. The Daily Grind Coffeehouses are decorated with a retro industrial vibe. They feature art and signage that tells the story of their crop-to-cup process and educate customers on various coffee-related topics.

This privately held, LLC offers premium coffee beverages and breakfast items. Each of their cafs average $2,750 in sales per day, with some locations performing much

higher than others depending on location, square footage and whether or not they have a drive-thru (all but two locations do). The average transaction is $5.74. Last year, The Daily Grind saw $10,900,000 in total revenue.

As the accounting department for The Daily Grind, your team is responsible for evaluating strategic decisions for the company that come down from the owner and CEO. Your advice and input provide direction for the company, so that The Daily Grind can continue to grow its prots.

Now that they have successfully incorporated the roastery into their business, the executive team at The Daily Grind believes the greatest opportunity for revenue expansion is in the retail space. Based on several examples theyve seen from successful like-minded coffee roasters in other markets, the executive team has developed an approach to expanding its retail opportunities. Theyre now asking your advice on which one would be the best to start with, since they will have to take a phased approach with this expansion.

A. Sell beans in high-end grocery and specialty stores. This option would involve procuring shelf space at local stores, such as high-end grocery, health food, co-op, gift shops and other stores with a focus on local and superior-quality products. With shelf space being as highly coveted as it is, it would likely leave room for selling just The Daily Grinds two most popular coffees, the house blend and El Salvador. Based on some preliminary research by the executive team, they have found approximately 15-20 locations they think would be a good t.

B. Wholesale beans to other coffee shops under a different brand name. The Daily Grind could also start its expansion plans by wholesaling beans to other coffee shops that dont roast their own. It would require creating and designing a new brand, packaging and an accompanying website, plus marketing to attract potential coffee shop customers. The Daily Grind would plan on pursuing customers both locally and nationally.

C. Push to become the sole coffee supplier to local restaurants and other venues. In this approach, people from corporate would leverage their personal relationships with local restaurant and venue owners (or managers) to convince them to make The Daily Grind the only coffee they serve. It could also include cold calling and drop-ins with samples, for business owners that do not have existing relationships with someone in the company. With this option, The Daily Grind would actively pursue businesses that align with its mission and values. Businesses that sign a contract with The Daily Grind would get to choose from a selection of small promotional pieces (such as a window sticker, table tents or other printed piece) to display and promote this exclusive relationship to their customers. Currently, the executive team has identied approximately 35-45 locations they would like to pursue contracts with.