After a tough year in 2008, the Minnesota-based chain of gourmet coffee shops has retooled in big and small ways, hoping to lure more customers back to its counters.
The latest phase in a year's worth of rebuilding and rebranding at Caribou Coffee hits the street today.
The new look ranges from the subtle -- brown cup covers -- to the sublime: a new-looking caribou logo built out of a coffee bean.
The company's theme remains central -- "Life is short. Stay awake for it."
These and other steps aim to reconnect with customers. They are part of a yearlong revitalization of a brand that was languishing a year ago, when the company reported a $16.8 million loss.
Now, Caribou has added messages to coffee cups and napkins, store decor and -- coming soon -- billboards and other outdoor venues that designers hope will resonate with consumers.
Cups bear messages that say "Spend time with your kids, tomorrow they're a day older" and "Dare to adventure" and "Don't wait for New Year's to make a resolution."
"We wanted a visual signal that Caribou is alive and well," said Alfredo Martel, senior vice president of marketing for the Brooklyn Park company. "We're saying life is short, seize the day." And do it with Caribou Coffee.
Martel called the latest Caribou marketing attempt "a two-way conversation with the customer."
Turning profitable again
At the end of 2008, Caribou's stock was trading at $1.36 a share. Today, it's $7.10 a share on sales of $262.5 million in 2009, up 3.4 percent from 2008, and earnings of $5.1 million, after the loss in 2008.
But under the direction of CEO Mike Tattersfield -- the third leader in three years -- the company shut some stores, concentrated on its core markets, added new products and focused on customer service.
"We're very encouraged by the progress the management team has made in the last year," said stock analyst David Tarantino of Robert W. Baird & Co. "They seem focused on the right areas, but progress doesn't happen overnight. It's still a tough consumer environment out there, and their rate of investment [back in the company] is dependent on the sales side."
Tarantino said he was not disappointed that fourth-quarter earnings didn't meet expectations because the company spent aggressively on marketing and new products in the quarter. "I think it was the right move and not completely surprising," he said.
Caribou, which is a distant second to Starbucks in the coffeehouse industry, currently has 515 stores, including 112 that are franchised and licensed. The company also has a commercial wing that sells branded products to grocery stores, airlines, hotels and other merchandisers. Caribou is the official coffee partner of the Minnesota Twins in their new Target Field ballpark.
Last month Caribou added "handcrafted" oatmeal to its menu following the addition of new chocolate beverages late last year. The company now is testing in-store baked items in 25 of its Minneapolis locations, and five flavors of Tea Latte Fusion will be introduced this week.
In a conference call with financial analysts last week, Tattersfield called 2009 "a significant success in our turnaround efforts."
Nonetheless, the CEO acknowledged the volatility and competitiveness of the gourmet coffee world and declined to provide guidance on performance for 2010 until later in the year.
"We're rebuilding traffic," Tattersfield said.
The assignment to repackage Caribou fell to the Minneapolis advertising agency Colle+McVoy.
"Caribou said everything was on the table," said Ed Bennett, the agency's design director. "They wanted something new and fresh but still relevant to their following."
Bennett called the old left-leaping caribou logo a "northern lodge look." Instead, the team led by Bennett and Colle+McVoy creative director Eric Husband built a more streamlined right-leaping caribou caricature with a coffee-bean body and antlers that form a "C" for caribou.
"We wanted to present the familiar in a slightly unfamiliar way," Husband said.
Watch for 'Bou-isms'
The agency also adopted a deeper blue for the national park-like sign the provides the backdrop for the caribou. The brown coffee lids -- not black and not white -- were determined to be more consumer-pleasing. "They don't show lipstick marks," Bennett said.
All the new phrases on the Caribou cups and napkins were given the name "Bou-isms," in reference to the "Bou" nickname that company insiders use to refer to Caribou.
In April the Bou-isms will start appearing outdoors on billboards and bus shelters and Minneapolis light-rail train cars.
Martel said Caribou is looking at new store layouts with prototypes on the Nicollet Mall and in Minnetonka. He doesn't rule out new store openings where opportunities exist.
But Tattersfield told analysts last week that Caribou pretty much intends to stay in its current 16-state configuration for the moment, noting that the coffeehouse has a 35 percent market share in its home state of Minnesota.
"We don't need an additional footprint," said Tattersfield.
Martel declined to say how much Caribou will spend on its rebranding campaign.
"We're taking the original brand to the next level," Martel said. "The new Caribou logo signifies a leap into the future."
David Phelps • 612-673-7269