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MENAFN - Muscat Daily - 15/09/2012

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(MENAFN - Muscat Daily) Canadian caf operator Second Cup International has managed to craft an extensive reach across the Middle East in the last decade by operating through regional franchise partners. Since entering the Oman market through Bin Mirza International in 2004, the brand has enhanced its presence through four outlets.Today, Jim Ragas, president of Second Cup International, details how the Middle East, and markets like Oman, is integral to its success story, along with expansion plans and a roadmap to introduce new products to the sultanate.Considering the global reach that Second Cup has, where does the Middle East and markets like Oman figure in your overall operations?
The Middle East is a very important part of our portfolio as it was the first region we targeted when it came to expanding out of Canada. We started out in Dubai in 2002 through the franchise concept. Today, out of the 82 locations that we operate in, 64 of them are in the Middle East. We are seeing growth in all of our markets across the Middle East.Being a Canadian brand was a distinct advantage for us in the Middle East as Canada has strong relations throughout the region.We entered Oman in 2004 after we got acquainted with Hani bin Mirza of Bin Mirza International who was at that time Oman's honorary consul general for Canada. In the sultanate, we noticed that the coffee and tea culture was very popular and there was an opportunity for us to expand. Oman is a growing market for us where same-store sales grew 25 per cent last year. It was the highest in the Middle East for us.What are your expansion plans in the Middle East, and particularly in markets like Oman, going forward? Do you plan to introduce new products or concepts in the market?
We see the Middle East being able to accommodate 150 more locations of Second Cup over the next ten years. Realistically speaking, that is easily attainable. There is still tremendous opportunity to growing our brand in Saudi Arabia where we are already in Riyadh and Dammam.The target in the UAE this year was to open ten new locations, out of which we have already opened five. Three of them will be opening in the next two weeks and the other two will open in November.In the next 12 to 18 months our franchise partners in Oman are coming up with two new locations. The region still has tremendous potential for growth.One of the key parameters for success in this business is innovation. Earlier this year, we introduced a frozen yoghurt product in some markets. It is completely natural and low in sugar. After introducing this product, we have seen an increase in traffic and sales of 20 per cent, so we plan to introduce the same product in the Middle East, especially Oman, by the end of this year. Frozen yoghurt is a healthier product. There are competitors with similar products but I don't think a lot of them have been able to put together different things in one place like us. We have some other products too that we are looking to roll out.We are working with partners here to implement a vending-machine programme. You will not get the whole gamut of Second Cup coffee but you will get a good espresso, cappuccino, hot chocolate and tea. The vending machine has fresh ground beans. This machine has already been at theOmantel offices for a while now and now we are doing it for Oman Arab Bank.We are looking at other opportunities and areas to introduce these machines. One of the other things that will be introduced to this market, somewhere down the line, will be sale of some of our products in retail stores.What is the competition scenario like for you in the Middle East and how does it differ from the West? And in light of this competition, what is your strategy to stand out?
The Middle East is more competitive market than Canada or the US. There are more multinational players in this part of the world. In Canada or the US you will find competition pretty much from the same region. But in markets like Oman you have all the major international brands and the local grown concepts that are fighting for market share.Every market presents its own challenges and you will have to deal with each market individually. Our formula is to partner regional players who know the market very well. When it comes to standing apart from competition, it is the variety of our menu, be it in sweet or savoury items. Our food is always fresh and we invest in training our staff to provide quality customer service.What are the challenges that you face in the Middle East markets?
The distance from the home base is a challenge and we had to factor this into our business model. This is where having a regional franchise partner helps as they are able to provide local insights.The other challenge lies in ensuring that all products are available across the different outlets in all regions. You need to also know how to deal with different regulations in the various countries and the paper work involved, sometimes, is fairly daunting but it is a learning curve.What is your roadmap in the Middle East for the remainder of the year and for 2013?
For the second half of this year, we expect to see same-store-sales of over six per cent from each market in the region. We are establishing our presence in new areas that will become operational later on this year.We will be opening an outlet in Azerbaijan in November as we just signed on a franchise partner. We have also signed on a franchise partner in Pakistan and a new outlet is expected there if not this year, then at least by the first quarter of 2013. For 2013, we would like each market in the region to attain at least ten per cent growth.


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