Who Is #2?

(Tuesday, February 01, 2005) - ...Probably more on target with today's consumer is the Billings, Montana-based Mountain Mudd Espresso, an eight-foot-square kiosk concept that combines the sex-appeal of barista service with speedy ("typically one minute and 15 seconds," promises the company) drive-thru delivery. Coffee kiosks (beverage retailers without seating) account for roughly 9 percent of the total $8.47 billion specialty coffee sales. Not even near the $6.12 billion attributed to coffee cafes (beverages retailers with seating), but a nice chunk of change nonetheless.

There's no doubt that drive-thru is the next dimension in the specialty coffee segment. Starbucks has already begun rolling out its own drive-thru window model and has announced plans to include that option in at least one-third of new stores.

Chain competitors all agree that prime real estate availability is the key to growth. With its relatively small footprint, Mountain Mudd has a viable game plan. Since 1994, 56 kiosks have sprouted up in 16 states, including Hawaii—with another 20 already on the books—through "co-op" licensing agreements. Annual sales have exceeded $4 million. Number two? Not even close, but a coast-to-coast comer that is looking to create a niche of its own…

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