The founder of a Canadian coffeehouse chain has his eyes set on taking over multiple Starbucks locations that are being shuttered permanently in Winnipeg.
Calgary-based Good Earth Cafés Ltd. plans to nearly double its 45 locations across the country, just as Seattle-based Starbucks Coffee Company is closing 300 Canadian sites by the end of March.
In an interview with the Free Press Wednesday, Good Earth’s CEO Michael Going said it’s all part of a "forward-looking" business strategy that is striving for a future beyond COVID-19.
"There’s no question about it — we certainly see Winnipeg as a very strong market and this crisis won’t be lasting forever," he said.
"Winnipeggers care a lot about the quality of their coffee and the food that they consume, which is why the environment of our cafés is a perfect match."
Going said his company is looking at potential sites to be redeveloped and is recruiting partners for multi-unit franchises, along with single-unit operators.
Good Earth already has two cafés in the city. One of the many former Starbucks locations that it’s now looking to take over includes the one on Academy Road, which saw a lot of foot traffic prior to the pandemic.
"We’re looking at any high-profile location," said Going. "There are a lot of drivers with the final decisions we will make, but certainly the quality of the real estate is one.
"And among other things, it’s all about who will run our franchises. We want to see people that are one with their communities. Our operators are typically people who have their kids going to school with their customers, or who they play hockey or soccer with. That’s important to us."
Good Earth has hired Stan Boniferro of Stabon Enterprises to work with landlords and developers in identifying locations that would show good performance, infrastructure and prospects for growth.
"We’re ready to move fairly quickly," said Going. "There’s a lot of unknowns right now on the terms that Starbucks is using as they’re exiting and that sort of thing. A lot of locations are closed down now, but the final agreements haven’t been made with their landlords. So, for us, it’s out of our hands. But we’ll move as the opportunity comes to us."
Starbucks did not respond by press time for comment. In January, the company said it’s closing hundreds of their coffee shops as part of a "transformation strategy’’ to respond to changes in consumer habits during the pandemic.
Going said that’s not something he’s necessarily worried about. "COVID is not a forever thing, and we really see this as an opportunity to infill the gaps that Starbucks is leaving behind when they’re closing so many of their stores right now," he said.
"Coffee is about so much more than just a drive-thru or a grab-and-go. It’s more than a commodity or product and we really want our customers to continue having that experience that we know they will return to after the pandemic."
Good Earth is also interested in hiring previous Starbucks employees at former locations in Winnipeg.
"We always look for strong staff and so if people have connections in their communities, then obviously they’d move up to the top of our list in employees we want to be hired," said Going. "But likely, they’ve already moved on."
Sylvain Charlebois, a leading food consumption and management expert, believes Good Earth is making "a bang-on business decision."
"Canadians won’t stop drinking coffee outside their homes anytime soon," said Charlebois, a professor at Dalhousie University and director of the Agri-Food Analytics Lab. "In fact, our studies have shown that we drink even more coffee outside the home than the U.S. — that’s the legacy of Tim Hortons.
"And so, if Good Earth is a company looking to invest in these (former Starbucks) spaces and take them over while they’re exiting during this time, that’s an incredibly smart idea."
But Charlebois said Good Earth must separate itself from the image of Starbucks — through price points, menu items and local branding — if it plans on being successful in the long run.
That’s something Going said he’s been more than aware of since he opened his first shop almost 30 years ago in Calgary.
"At the end of the day," he said, "we know who we are.
"We’re a proudly Canadian company that’s all about making local community connections within a neighbourhood. And that’s a strength that we know will be the key to our success as we move forward, and beyond this terrible pandemic."
Temur Durrani reports on the economic impact of the coronavirus pandemic for the Winnipeg Free Press. Funding for this Free Press reporting position comes from the Government of Canada through the Local Journalism Initiative.