Wheels Up on Specialty Coffee
Coffee. It seems to be everywhere. On every block. In every hand and every Instagram. But according to the USDA, U.S. consumption is significantly lower than its peak in 1948 and global consumption is forecast to hit a record low in 2016. What can explain this?
While consumption by volume is falling, something else is brewing: specialty coffee.* Consumption of specialty varietals rose threefold between 2000 and 2015. And it is costing consumers; Americans spent a record $12.8 billion on coffee in 2015, and are expected to spend $13.6 billion in 2016.
*Specialty coffee typically has one or more of the following characteristics: a) Grown using fair labor practices b) sourced with a focus on crop sustainability c) produced with a focus on quality d) shipped with a transparent and traceable supply chain
In 2014, a 25-year-old woman named Maria De La Croix was turned down from a job at Starbucks for having blue hair. In need of rent money, she and a few friends hand crafted the first Wheelys café, focusing on brewing fresh coffee. The cart was built on top of a bicycle, enabling the rider to take a full service coffee operation anywhere their bike could go.
Two years later, Wheelys is operating cafes in more than 45 countries and is backed by investors including YCombinator, Paul Buchheit (creator of Gmail), Justin Waldron (co-founder of Zynga) and its future “Wheelers” through numerous rounds of crowd funded pre-orders.[2, 8]
Quick to start
Compared to opening a traditional café, opening a Wheelys has a much shorter lead time.
Affordable to start and maintain
A Wheelys café costs a fraction of a traditional café to start, opening up a new market of potential eco-entrepreneurs. Wheelys is also inexpensive to maintain with no rent or electricity contracts.
What customers want, where they want it
Wheelys distributes only 100% organic, high quality products.
Wheelys is also easy to transport, enabling café owners to even sell in multiple places within one day.
Making the world greener with every cup of coffee.
Not only are all Wheelys products 100% organic, its cafes are run only on sun and body power with newer models also incorporating wind power. Each café is not merely CO2 neutral, but carbon footprint negative. This is in contrast to a business such as Starbucks’ where a high proportion of GHG emissions (1,342,419 metric tons of CO2 in 2015) are attributable to energy use in its physical stores.
What is Brewing Ahead
Looking forward, Wheelys’ business is likely to meet increased demand related to its eco-conscious business model as a growing number of consumers are bringing climate change concerns into their purchasing decisions. In 2015, 45% of consumers answered that they were already “very heavily” or “heavily” influenced in their purchase decision by whether a product is from a company known for being environmentally friendly.
However, these trends will also bring challenges. As competitors are taking note of these sustainability purchase drivers, many will attempt to flex their own environmental responsibility muscles. When they do, it will be across an expansive global presence, likely much larger and more visible than Wheelys’ current one. Starbucks is already taking steps in this direction, releasing an annual sustainability report with targets such as increasing in-store recycling and cutting CO2 emissions. These targets have become more aggressive and consumer facing in recent years and if done successfully, could pose a threat to Wheelys’ “sustainability story” as a leading differentiation point for customers and business owners.
Wheelys should focus on two key areas in order to take advantage of opportunities related to the environment and mitigate the risks.
- Wheelys should internally honor its external brand identity. Although Wheelys cafes are “carbon neutral,” Wheelys should strive towards sustainable practices across its entire value chain from the way the coffee is grown all the way to manufacturing and shipping. In doing so, the company can minimize its negative impact on the environment and also avoid scrutiny and backlash over any inconsistencies in its brand identity as the company scales.
- Wheelys should bring its green mission to the forefront and ensure it is baked into each customer touch point and brand experience. This will help attract eco-minded consumers, spread awareness and further differentiate Wheelys. Examples of this include making all Wheelys products compostable or recyclable, subsidizing free coffee on Earth Day or selling Wheelys-branded bicycles to raise transportation pollution awareness. The company can also achieve this through innovations in its café designs as exhibited in the greenhouse attached to its Science Station (see exhibit below).
The Evolution of Wheelys
Wheelys 2 and 2.2
Wheelys Science Station
 Peters, A. (2014, April 4). The Bike-Powered Coffee Cart That Could Take On Starbucks. Retrieved from https://www.fastcoexist.com/3029125/the-bike-powered-coffee-cart-that-could-take-on-starbucks
 Company website
 Coffee: World Markets and Trade 2016/17. Retrieved from United States Department of Agriculture website: https://apps.fas.usda.gov/psdonline/circulars/coffee.pdf
 Vellucci, M. (2015, December 1). The Continued Rise of Premium Coffee in the U.S.: Will It De-Commoditize Coffee? Retrieved from https://www.bbh.com/en-us/insights/the-continued-rise-of-premium-coffee-in-the-u-s—will-it-de-commoditize-coffee-/10966
 Mintel Research. (2015, July 13). Mintel in the Media – This week’s highlights, 13th July 2015. Retrieved from http://www.mintel.com/blog/mintel-market-news/mintel-in-the-media-this-weeks-highlights-13-july-2015
 Thorpe, D. (2016, August 3). Don’t Tell Starbucks the Future is Coming on a Bicycle Wearing Blue Hair. Retrieved from http://www.forbes.com/sites/devinthorpe/2016/08/03/shhh-dont-tell-starbucks-the-future-is-coming-on-a-bicycle-wearing-blue-hair/#7e4999d3360f
 Tackling Climate Change | Starbucks Coffee Company. (2016). Retrieved from http://www.starbucks.com/responsibility/environment/climate-change
 Indiegogo. Wheelys. A café in a bike. Deal with it. Retrieved from https://www.indiegogo.com/projects/wheelys-a-cafe-in-a-bike-deal-with-it#/
 Nielsen. (2015). Sustainable Selections: How Socially Responsible Companies Are Turning a Profit. Retrieved from http://www.nielsen.com/us/en/insights/news/2015/sustainable-selections-how-socially-responsible-companies-are-turning-a-profit.html
All images courtesy of Wheelys
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