Caribou Coffee is an American coffee brand and coffeehouse chain. It has 453 stores in the United States alone and several outlets outside the States too. The company was founded in 1992 by John and Kimberly Puckett, who decided to do more in life than to be financial advisors.
History
John Puckett worked as an advisor for Bain & Company, while his wife Kimberly worked at General Motors as a finance specialist. The couple was graduates of business from Dartmouth College. During a backpacking journey, the duo came up with the idea of a cozy coffee shop. The wilderness added to their raw idea when they saw a caribou running freely. The beautiful brown color and carefree nature of that caribou pushed the couple to bring out their A-game.
The Puckett family had spent a lot of time in Boston during their professional years. They were aware of the trends followed there regarding coffee and the general café environment. Soon, they started to refine their coffeehouse idea and shifted to Minneapolis in 1992 to bring it to life. They had already witnessed the coffee business booming in Boston and wanted to see the same in Minneapolis too.
After the declining last three decades, the coffee business was rewarding for entrepreneurs like Pucketts, and they grabbed the opportunity with both hands. Their business was not the only one around. Several old and new coffee brands showed up, including Starbucks. In December 1992, the first Caribou Coffee shop was opened in Edina, Minnesota.
Caribou Coffee saw a rival in the form of Starbucks. Their next strategy was to secure prime locations for their new outlets. They focused more on customer service, interior décor, and introducing items other than beverages rather than spending time roasting coffee beans. Kim Puckett herself handled the customer services department and made sure that they made loyal customers who would return again.
Caribou Coffee during 1994-1995
By now, Caribou Coffee has ten stores in the States. This feat was not an easy one, but it was an inspiration for new entrepreneurs. Despite getting tough competition from Starbucks, the Puckett family did not back down and made strategies for expansion and innovation. John was interested in making a brand out of coffee beans, so he signed an agreement with Lunds and Byerlys. Byrley’s stores would keep Caribou Coffee beans and merchandise in Seattle and Chicago.
Twenty-one operational outlets of Caribou Coffee pulled in $6.45 million in sales in 1994. On average, beverages pulled in around 60% revenue, food 20%, coffee beans 15%, and merchandise 5%. While much of this achievement was from Caribou’s quality of coffee and services, thanks to big investors who contributed generously. The founder of Hospital Corporation of America, Dr. Thomas F. Frist, was an uncle to John Puckett. Along with James R. Jundt and other notable investors, he scored about $18 million in funds in 1995.
1996-Onwards
With such heavy investments flowing in, Caribou Coffee felt the pressure of touching the 100-stores mark. They targeted it to happen by the year 1996 but failed to do so. Also, continuous rounds of funding diluted the ownership of the actual company. James Jundt, a mere investor, turned out to have more than 10% shares in the company.
At that time, Starbucks had 1,140 outlets, followed by Pasqua Coffee and Gloria Jeans in the US. Caribou Coffee was considered the fifth-largest chain of coffeehouses. Instead of selling shares to the public, John Puckett considered existing investors only. However, by the end of 1997, Caribou did manage to reach the 100-store list and had a revenue of $40 million.
In 1998, Caribou came into agreement with Delta Airlines. Since the company was well known in the Atlanta region, most domestic flights agreed to serve Caribou Coffee. The general sales went up to ten million cups sold annually. Another opportunity came in the form of Target stores. Caribou initially tested coffee bags at 20 Target stores, and by the holiday season, it was expanded to all Target stores.
“Life is Short: Stay Awake for it” was the slogan used by Caribou Coffee. Under the leadership of young Jay Willoughby, the company crossed the billion-dollar market. Willoughby focused on keeping the employees satisfied while working on improving the current outlets. Soon, Caribou Coffee emerged as a national chain. Currently, it has stores in UAE, Bahrain, Qatar, Kuwait, Oman, Egypt, Saudi Arabia, and Turkey.
Conclusion
The history of Caribou Coffee tells us about determination and passion for something. It also preaches the importance of grasping opportunities and making them work in your favor. The Puckett family started off with a raw idea that expanded to a big international chain. Their inspirational story gives us a moral that with luck by our side and the will to change, we can achieve anything.
