Expansion Brews at Barnie’s Coffee

Mar 15, 2001 10:30 PM  By

After more than 20 years in business, cataloger/retailer Barnie’s Coffee & Tea Co. still suffers from an identity crisis.

“Most people confuse us with the upscale retailer or the purple dinosaur,” says Chris Legler, director of strategic planning and systems for the Orlando, FL-based company. In actuality, Barnie’s sells gourmet coffee and gifts, with products ranging from a one-pound bag of roasted coffee for $1.99 to an $899 espresso maker.

But its commonplace moniker hasn’t thwarted Barnie’s plans to grow. Within the next five years, the $38 million gourmet coffee and gifts marketer plans to triple circulation from 300,000 catalogs twice a year and expand its 100-store retail chain to 1,000 stores.

A direct marketing believer Barnie’s catalog and Website account for less than 5% of its sales, but “someday we’d like our catalog business to be larger than retail,” Legler says.

In fact, CEO Rich Ungaro believes the direct channel has the most potential for growth. “Mailing catalogs allows us to penetrate a market without having a local presence,” he says. “Mailing into California and Japan really opened our eyes. That generated the most impressive results — even though we did not have a retail presence in either market.”

To support its growth, as well as to better manage its multiple channels, in July, Barnie’s began outsourcing its warehousing, fulfillment, and customer service to Connextions.net, which is also based in Orlando. In addition to Barnie’s, Connextions.net fulfills for Mercedes-Benz USA and vitamin supplier Health Authority and it provides customer service for Cisco Systems’ return department.

“We’ve integrated Barnie’s Website with customer service reps who handle the print catalog and Web orders,” says Jack LeFort, Connections.net president. “And we’ve also integrated fulfillment operations and supply chain management into the system. The integrations between the front end and the back end allow us to manage Barnie’s 100 stores more effectively.”

Percolating sales

Besides increasing circulation and rolling out new stores, Barnie’s is looking to relationship marketing as a means of growth. Last fall, for instance, the company struck partnerships with local companies such as InsideCentralFlorida.com and The Real Estate Channel, in which these partners will offer free Barnie’s coffee — and of course, promote the company — at selected events.

If these relationships prove successful, Legler hopes to develop similar agreements on a national scale. And he and Ungaro do not rule out the possibility of growth through acquisition.