Coffee v. Location: Location Wins (Unfortunately)

Coffee is a very competitive industry—especially in Portland. Having a coffee shop on every other corner is one of the things that makes living in this city enjoyable. You don’t have to walk very far if you’re looking for a place to get some caffeine.

Not all cafés are created equal, though, and today I would like to talk a little about what makes a café successful. There is a difference what makes a good café and what makes a café successful. What is the number one factor for coffee shop success? I wish the number one factor were high-quality coffee. Unfortunately, in my exploration of the city’s coffee I have found that location trumps quality—even in Portland.

Fast food businesses have used this to their advantage for years. I remember my economics professor at WSU leading a discussion about what makes a the fast-food industry successful. He used McDonald’s as his example.

“What business is McDonald’s in?” he asked the class.

Several hands went up. An easy question, everyone thought.

“Hamburgers,” one unsuspecting student ventured, figuring that for the first time, he knew the answer to one of the professor’s questions.

“Wrong.” The professor smiled at our naiveté. “McDonald’s is not in the hamburger business. It’s in the real estate business.”

Real estate? But don’t they sell hamburgers?

“Think about it. Which one of you would go to McDonald’s if you wanted a great hamburger?”

No one raised their hand.

“I didn’t think so.”

He had a point.

“In every city, who has a store by the most popular attractions, where the most expensive real estate is? Yep, McDonald’s. There’s a McDonald’s in Times Square. There’s one at the Pantheon in Rome. You can find a McDonald’s by the Louvre and on the Champs Élysées in Paris. In fact, you probably can’t go to any famous place without finding one nearby.”

He was selling us on the idea that even if you serve mediocre hamburgers, you can still make a killing if you have a great location. Starbucks, who has been very successful, knew this and implemented it in its growth strategy (note: I’m not implying that Starbucks has bad coffee—or mediocre hamburgers).

To give you another example, today I’m writing this article in a café that will succeed because of its location. The café is at the heart of a neighborhood, it has lots people walking by all day and it  has a large parking lot right behind it. As it has been almost every time I have come in, the café is full of people. It is going to be successful, but not because of its coffee. In fact, I don’t really like the coffee.

Why, then, do I come here? I admit (somewhat shamefully) that it’s because the café is convenient. The location is an easy walk from my house and the baristas are friendly. So even for me, someone who really likes and appreciates good coffee, the convenience of a great location sometimes trumps sub-standard coffee quality.

It would be great if the success of a café only depended on its coffee. Then we could always get great coffee no matter what the location. If all PDX coffee drinkers banded together and demanded an end to bad coffee, we could force every café in the city to serve great coffee. Maybe in the future we will.

Then again, maybe that’s just a utopian dream that could only be realized in Portlandia.

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