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Coffee company carves niche in caffeinated market

By Kirsten Swann 6:00 PM December 12, 2013

Just a year after going into business, Cabo Coffee employs 25 people at five locations and has big plans for expansion.

ANCHORAGE – Molly Bates’ career in coffee began with a four-cup-a-day habit and a love for business.

Today, Cabo Coffee includes four drive-through huts and plans for a new café inside City Hall. In the community where coffee stands line every major roadway, the burgeoning new brand has managed to carve its own niche in an already-saturated market.

“Business is just really fun for us,” said Molly, who also operates several medical businesses with her husband, Kyle Bates.

From an unassuming office tucked into a Tudor Road strip mall, the couple described how it all began. Molly would buy several specialty coffee drinks every day. Kyle would add up the receipts. Maybe they should open their own coffee stand, they mused. Kyle surfed Craigslist for huts for sale, and the more they considered the idea, the more realistic it seemed.

It was August by the time they bought their first shop – an old stand on the corner of Spenard and Minnesota. Two months later, they were open for business.

The journey was only just beginning.

Through a combination of strategic branding, targeted customer engagement and business savvy cultivated through years of experience, Cabo Coffee took off. Just a few months later, the Bates’ were on the hunt for a second stand. Then, a third.

“I looked at it like, you know what, I’m gonna try and take the market,” Kyle said.

By the summer of 2013, less than a year after opening up for business, Cabo Coffee was operating four stands from South Anchorage to Government Hill.

When the small coffee shop space on the first floor of City Hall opened up for lease shortly thereafter, the Bates saw yet another opportunity.

“It’s been a lot of legwork,” Molly said. “A lot of knowing who to talk to.”

But the legwork paid off. With 25 employees and steady, daily business, Kyle said his company’s secret to success was simple, albeit surprising.

“I’m not really worried about anyone else,” he said.

Not Kaladis, not Café Del Mundo, not Common Grounds or any of the other drive-by stands dotting street corners and parking lots around Anchorage.

Molly said her company focuses on delivering consistent customer service and a quality product from accessible locations. Customers come to expect things like chocolate-covered espresso beans on cup lids and coupons for local businesses printed on cardboard sleeves, and Cabo employees are rewarded for their success by financial incentives and other perks.

She said the company aimed to become a desirable brand, not just another quick cup.

“It’s a different attitude, but I think it appeals to people,” she said.

While data from the Bureau of Labor Statistics shows more than 50 percent of small businesses fail within the first five years, Kyle Bates said his company still had big plans for upward expansion.

“Honestly, my goal is to have 10 to 15 of these bad boys,” he said.


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