A couple of weeks ago I stumbled across a better cup of coffee. It took me several minutes before realizing that the barista hadn’t simply turned to the giant steel urn to fill my order. Instead, he was intently pouring hot water over a ceramic single-serving, manual drip, filtered brewer.
“Is this new?” I asked.
“Yeah,” he said, using his right elbow to indicate the rack holding four drip brewing cups. “We’ve been using these for a couple of months.”
“Oh. How are they working out?”
“Great. It takes a little longer but people like it.”
I stared for a while, watching the freshly brewed coffee trickle into a cup. “Are you, I mean Dunn Brothers, using these at all the stores?”
“No, just here. We’re kind of the lab for new stuff.”
Suddenly, I found myself chewing on two ideas. The first was simply the coffee under my nose, being brewed one serving at a time. The second was contemplating a Dunn Brothers coffee shop as a lab. Clearly, the two were related.
Innovation drives economic growth. Minnesota has enjoyed more than its fair share as evidenced by the many large, sophisticated corporations headquartered here. They’ve grown because Minnesotans have created an educational, cultural, science research and business climate that facilitates innovation. More critically, Minnesotans put their money behind their values, investing in schools, transportation infrastructure, public facilities and safe communities. As a result, Minnesota prospered while our Midwestern neighbors stagnated.
That’s a lot to ask from a cup of coffee but, mulling my conversation with the barista, I realized that I was encountering innovation. Or, at least the testing of innovation.
Returning to my office, I called Dunn Brothers corporate headquarters and left a voice message with the marketing vice president. Several days later, CEO Chris Eilers called me back.
“We call that a ‘pour-over,'” he said, answering my coffee brewing question. “We think it produces a better tasting cup of coffee.”
Dunn Brothers roasts, grinds, brews and sells coffee but at the corporate level, it’s a franchising operation. Individual shops are independently owned but pay a licensing fee in return for a branded operations package. The entire operation hangs on the idea that freshness -in sourcing, roasting and brewing- is key to success.
During my conversation with Eilers, he pointed out that coffee’s ubiquity is a barrier to success.
“Whenever something becomes a commodity, the lowest price wins,” he said. “Convenience is a losing game.”
McDonald’s decision to improve its coffee offerings, directly competing with Starbucks, is the best example. The result is a better cup of McDonald’s coffee but is that enough? More bluntly, are all coffee drinkers satisfied by a slightly better quality, extremely convenient cup of coffee?
Of course not.
Coffee consumers preferring a better cup of coffee represent a smaller slice of the coffee consuming public but they behave differently than the drive-thru coffee drinker. Meeting their needs and expectations creates a loyal, profitable market base. That simple observation, however, is fraught with risk. Mess with the high quality expectation -a bait and switch- and customers will leave in droves for a competitor.
Something as seemingly simple as making and selling a cup of coffee is, under scrutiny, not so simple at all. Which, leads me back to innovation.
In our conversation, Eilers talked about the University and 280 store’s importance in exploring innovation. Testing a new process isn’t as simple as brewing a few cups of coffee. Determining the process’ capacity for scaling is critical. It’s one thing to implement a pour-over process in a couple of stores; it’s quite another to roll it across hundreds while ditching the huge, stainless steel, coffee industry standard urns.
Remember, Dunn Brothers is a company built on independently-owned franchises. It doesn’t command the market share or menu enforcement power of a McDonald’s restaurant so change requires regular communication with franchisees. The coffee consuming landscape is not uniform. What’s appealing in Linden Hills can leave Willmar coffee drinkers unmoved.
“In our industry,” Eilers notes, “there’s not a one-size fits all experience.”
Let’s pause here, scratch out the term “coffee,” replacing it with “public policy.” There is, clearly, not a one-size fits all solution to Minnesota’s many challenges. I’m not going to push my analogy too hard or too far but the conservative tea party scolds clearly want convenience, however bitter the brew or debilitating the long-term cost, over quality. Only innovation can change the debate. That’s really what I learned from my unexpected encounter with Dunn Brothers pour-over coffee brewing product development process. Stagnation and retreat only create a downward spiral of declining market share until there’s no business left. Minnesota must learn innovation’s lessons in order to prosper. Strong schools, affordable healthcare, robust transportation infrastructure and effective, job-creating economic development will move us forward.
Minnesotans aren’t interested in self-absorbed, self-aggrandizing debates about ideological principles. We want strong communities, security, good schools and job growth. It’s not quite the same as a better cup of coffee but it isn’t that much different either.