February 27, 2025 • 44 mins
In a recent Restaurant Masterminds podcast, hosts Paul Barron and Rudy Miick interviewed Darren Spicer of Clutch Coffee Bar about effectively connecting with Gen Z consumers. Spicer, with prior experience at Dutch Bros, shared that hiring Gen Z staff is crucial for attracting Gen Z customers, as authenticity resonates with this demographic. Clutch's success stems from its vibrant color palette matching "Gen Z palette 2025," purpose-driven approach of "serving positive energy," immersive atmosphere with music, dedicated app-based rewards system, and menu diversification beyond coffee. Spicer predicts industry consolidation in the next five years with Dutch Bros and Seven Brew dominating, while Clutch focuses on densifying its Carolina presence before expanding elsewhere.
#GenZMarketing #CoffeeInnovation #BrandAuthenticity
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#GenZMarketing #CoffeeInnovation #BrandAuthenticity
~This episode is sponsored by: Gusto → https://gusto.pxf.io/PBN ~
#1 rated HR platform for payroll, benefits, and more
With Gusto’s easy-to-use platform, you can empower your people and push your business forward. See why over 400,000 businesses choose Gusto.
Are you a hospitality or restaurant industry leader looking to amplify your voice and establish yourself as a thought leader? Look no further than SavorFM, the premier podcast platform designed exclusively for hospitality visionaries like you. ➡ Visit www.savor.fm
Follow on X: Savor_fm
Get Your Podcast Now! Are you a hospitality or restaurant industry leader looking to amplify your voice and establish yourself as a thought leader? Look no further than SavorFM, the premier podcast platform designed exclusively for hospitality visionaries like you. Take the next step in your industry leadership journey – visit https://www.savor.fm/
Capital & Advisory: Are you a fast-casual restaurant startup or a technology innovator in the food service industry? Don't miss out on the opportunity to tap into decades of expertise. Reach out to Savor Capital & Advisory now to explore how their seasoned professionals can propel your business forward. Discover if you're eligible to leverage our unparalleled knowledge in food service branding and technology and take your venture to new heights.
Don't wait – amplify your voice or supercharge your startup's growth today with Savor's ecosystem of industry-leading platforms and advisory services. Visit https://www.savor.fm/capital-advisory
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
We are back here on the Restaurant Masterminds podcast, and
today it's going to be a hot one because we're
going to dive into gen Z and how brands are
building to match this new demographic. It is going to
be so much fun. And of course I've got mister
Rudy mccopiloting with me today. How are you? I am
so good the culture guru coming in from Mixing and Associates.
(00:23):
So the cool thing today that we're going to dive
in on is all about this gen Z audience, which
there are so many secrets. In researching this, Rudy, I
found so many weird secrets about gen Z that we're
going to talk about today.
Speaker 2 (00:40):
So, oh my goodness, I can hardly wait. It is right.
We need to keep expanding our bandwidth.
Speaker 3 (00:48):
Man, absolutely and so excited to hear more and share
with you some of what we've seen.
Speaker 1 (00:55):
I love it. All right, let's get started. We'll be
right back. My name is Paul Baron. As the early
(01:23):
pioneer in fast casual, I've seen the industry evolve from
just a few operators to the most sought after segment
by consumers around the world. Now we're planning to shape
its future. Tap into decades of my expertise identifying the
emerging brands and tech winners in the space. Saber Capital
(01:44):
will be fueling the next generation of fast casual innovation.
All right, So we're back here on the Masterminds and
today's going to be a good one because we're gonna
jump into gen Z and what kind of brands are
building that. We're actually going to have a guest on
the show today, Rudy and are going to give you
guys kind of an insight to where our direction is
(02:05):
going here on gen Z. But primarily we're going to
be focusing on a brand named Clutch Coffee Bar. And
Darren Spice is going to be joining us here in
a little bit. We'll add him to the show, so
he'll come in and once we have him in the show,
you guys, we'll kind of do a little bit of
deep dive on that. What I want to begin with here, Rudy,
(02:26):
and this is something that I think you know, we've
seen over and over across the area of brand building
is how do you match up with the right kind
of brand at the right time. And one of the
things that all brands have been trying to do is
reach the gen z audience and this particular brand. I'm
going to share this for everybody and if you, by
(02:48):
the way, if you guys are listening to the podcast
instead of watching the podcast, well come over to YouTube
right now and just search saverer fm and you'll find
us there. This is the brand, Rudy. I know you
and I kind of chatted a little bit about this,
but what they've done is really kind of create a
(03:09):
uniqueness around what is a drive through coffee concept, and
they've done a really good job with their app framework.
They've done an excellent job I think in terms of
the branding elements. Notice the colors here though, Okay, so.
Speaker 3 (03:25):
Yeah, the colors are vibrant and everything goes right to
the heart of fresh, organic, et cetera.
Speaker 1 (03:32):
Right, does this remind you of any other color that
you've seen before?
Speaker 2 (03:38):
What a tricky question.
Speaker 1 (03:40):
Okay, so to me it has a Starbucks feel, you
know when you let's go back to it.
Speaker 2 (03:46):
Let's go about shades. The shades of green are there?
Are they not? And at the same time, notice the
pink and.
Speaker 1 (03:54):
Well it's definitely got the flag. Yeah, absolutely, they've got
the flare, which I think is a big factor in
approaching the gen Z marketers. You've got to have the
right kind of brand connection colors are And this is
what I was getting at, is these secrets that I
have discovered is that gen Z has an affinity to
a certain color palette. Did you know this?
Speaker 2 (04:17):
Yeah?
Speaker 3 (04:17):
And I know this, and a spectrum within the color
palette right of vibrance.
Speaker 1 (04:24):
So and each of these things triggers certain behavior, which
I know that there has been a psychological connection to
colors before, and why brands choose certain colors, power colors,
you know, docile colors for building you know, certain times
of approaches. But in being able to build a brand
down to the gen Z level, and I know this
(04:46):
is where you and I talk about this a lot,
is the culture side, how they connect and how you're
able to make a brand, because there's two things that
happen here. Is you have a brand that truly has culture,
and then you have brands out there that fake having culture.
Speaker 2 (05:05):
You know what I mean, Well, that's culture too.
Speaker 3 (05:09):
So right, the culture exists, the question is what do
we want to do with it?
Speaker 2 (05:17):
Right? And so are we is the culture there by default?
Speaker 3 (05:23):
And we never really even talk about the values or
we never talk about why we started the business or
culture is very definitive about how we treat each other,
the quality of the product, the value of the price, right,
and that culture derivative then becomes vibrant, as vibrant as
(05:45):
some of the colors, right.
Speaker 2 (05:46):
I think that's what we're going to see with Daryl
and their group.
Speaker 1 (05:50):
Go ahead, no, go ahead and finish it. I was
just going on the sense of when you have brands
that are I mean, you know, I've ran into a
couple of these here in South Florida, which they look
so slick. Okay, they just look amazingly slick, and then
you get into the operation and you start, you know,
(06:11):
because I test them all the time I'm ordering, I
try to mess them up, see how they handle a
little bit of issues with customer service. And in some
cases some of these brands, especially down here in this
food court in Darrel, these brands break down so quickly
in terms of customer service. They have no faith in
(06:31):
what they're doing. A lot of times they're blaming someone
else on the team for what happened. Why do you
think that is when you have a brand that just
looks so dynamite on the outside.
Speaker 3 (06:45):
Well without getting too psychologically in depth here, how about
pondering how a building or the brand dress, if you will,
the colors, the content, text, the texture, et cetera. Think
about how there are people in the world that on
(07:08):
the outside look like a million bucks, but I don't
want to do a business deal with them whatsoever.
Speaker 2 (07:17):
Right, So the construct of and.
Speaker 3 (07:22):
Now let's get even simpler, regardless of industry segment. It's
much easier for an operator or a group of investors
to hold on to to physically touch the color palette,
(07:42):
the seats, the tables, the technology. I can hold on
to that stuff. But when it comes to the way
we're going to transfer the color palette to the actual
delivery of the product and the consistence of the product
that falls through, so we don't dell it. We don't
(08:05):
have the human skills, the communication skills. We it's much
easier to put dollars and cents and time into that
three dimensional tangible stuff. And it's I think one of
the real dilemmas in our industry where we're all about
hospitality and taking care of people and just relaxing in
(08:28):
a great environment, that well, wait, we can design those
experiences the same way we can design the color palette,
the brick and mortar, et cetera. However, it takes thought
and it takes time, and it's not so easy to
really define. Well, gosh, what does excellence mean in my brain?
(08:52):
So in the building, the building looks good, and it
falls apart the second we walk in the door, because
we haven't put invest in the same amount of money
and time in developing the human experience and the fourth dimension,
the space right the experience of it.
Speaker 1 (09:09):
Well, you would think that most brands that have that
kind of look and feel. We just showed a color
palette for gen Z. Yeah, and they were matching up.
I'll bring Clutch back up just so you guys have
it on the scene.
Speaker 2 (09:23):
Yeah, they were matching.
Speaker 1 (09:24):
I mean, there's a lot of the same colors that
are being matched up in this brand to what gen
Z is essentially kind of migrating to, which again I
did not realize that there was such a thing as
a color palette for gen Z. So that was kind
of interesting in itself. And I know we got Darren
coming on here in a second. Darren, I see you
(09:45):
down in the green room. Will bring you right in
in a second.
Speaker 3 (09:47):
Okay, So just for what it's worth, Paul, there are
companies out in the world that do nothing but put
together color palettes for nation, right or okay, every year,
that's crazy. This is this year's color palette, and you'll
(10:08):
see an athletic wear, in dress, street dress, et cetera.
Speaker 2 (10:14):
Right, So I mean, yeah, there's well on ways to
make them body, Yeah.
Speaker 1 (10:19):
And I think the key here is the connection when
you get brands like Clutch, which Darren is in the
in the green room right now, so we'll bring him
on and we'll get him going and it'll be a
good one. And of course the thing that we're getting at.
First of all, let's welcome Darren Spice is coming in
from Clutch Coffee.
Speaker 2 (10:37):
Great to have you.
Speaker 4 (10:38):
Thanks for having me, all right, so.
Speaker 1 (10:40):
Let's let's move you up here. So you've got a
little bit of a different quan all right. So Darren,
we've been talking about gen Z's and how they attract
two brands like Clutch Coffee. Now, you guys have done
a really good job. We've been appreciating your brand colors,
the way that you guys have created a very unique
design in your drive throughs. All that along with the
(11:02):
menu boards. We even showed some MENI board concepts, which
we'll bring back on screen in a minute. But I
want to kind of open up with, at least for
your side, is first of all, why did you go
this direction when you started Clutch Coffee? Because you could
have gone the other route. You know that cozy brown,
soft tones, that kind of thing. Tell me a little
(11:22):
about the story.
Speaker 4 (11:24):
Yeah.
Speaker 5 (11:24):
So I think for us, from our perspective on the brand,
we have a youthful brand and I think that's a
key component in looking at the color palet on what
we're going to do right, So our workforce is typically
pretty young. Prior to starting Clutch, I worked at Dutch Bros.
For almost a decade and so a lot of that
focus was on a youthful energy and something that really
(11:47):
resonated with customers. So when we looked at our color palette,
we actually went through a very extensive exercise that kind
of mapped out and tried to pair different colors that
we thought would be complimentary.
Speaker 4 (12:00):
We wanted to reflect the brand.
Speaker 5 (12:01):
So the cheat code, if you will, is if you
look on our Instagram page, our story highlight buckets are
five different colors and those are actually the five different
colors of our palette in addition to the black base.
So just warm, vibrant colors that exude energy and our
(12:22):
eye catching, I think is the route we went so.
Speaker 1 (12:25):
With that because color and I'm sure you guys know this,
but we showed this earlier, is that there's a whole
gen Z palette that's out there that attracts and there's
different levels of psychological impressions that it leaves on gen Z.
So you see a lot of brands. I'll bring this
up for everybody in case you are watching on the
(12:46):
YouTube side, if you're listening on the audio version of this,
go over to YouTube and check this out. But this
is the gen Z pallete for twenty twenty five, and
see all sorts of different color trends. And if you
look at this, there are so many color trends that
are smack dab into what you guys are doing, So
kudos too. I don't know if that was by design
(13:07):
or by luck.
Speaker 5 (13:09):
It was by design, yeah, no, it's and it's I
think we look at that age range. You know, people
are still youthful on the relative spectrum or if you
are older, let's say you're older than gen Z. You
are looking for a youthful experience, right and someone that
(13:29):
brings that energy. So you know, I'll give a little
bit of credit to the gentleman that helped us map
out the color palette.
Speaker 4 (13:36):
Used to be the head of.
Speaker 5 (13:37):
Brand design for Jordan Brand Jordan and to college together,
so it was a really fun exercise to go through
it and it's kind of cool to see maybe this
is our year to hit that exact pallet.
Speaker 1 (13:49):
I love it. Well, it seems like you're tuned in.
We are looking at your core right there with Clutch
Live DRAMs, Clutch Cares, Swag and shops, so you've got
all the key components in terms of color there on
your Instagram you mentioned, And this is the thing that
we're trying to identify in today's podcast is how to
brands connect to that gen Z audience in the way
(14:10):
that you've been able to do it. And in looking
at some of the data that we researched on Clutch,
it was one of the reasons we reached out to
you guys was first of all, you had a really
good sentiment score on gen Z specifically, so whether it's
social or it's something that is within the brand DNA
(14:31):
that is causing gen Z to really attract to this brand.
What is the secret recipe when it comes to why
Clutch is winning in this category?
Speaker 5 (14:44):
Great question. I think there's a couple of things that
stand out at the forefront. But number one is if
you want to appeal or attract to gen Z, you
need to hire gen Z. People need to be able
to see a reflection of themselves and say, hey, that
person looks like me, be able to relate to me
age wise, give them other things to be able to
connect with customers as well when they're actually coming through
(15:07):
to drive through and having that experience. So that's one
big one I think is to hire the range or
the target you're actually looking at. Another component is just
the energy and the vibe that we set in the store.
So if someone driving in visits our drive through, we
have surround sounds, speakers set up inside and out, and
(15:28):
the entire goal there is to just for're the host
of the party right for the two or five minutes
that you're there. We want to deliver a great experience,
and so I think the music plays the key part
where it provides energy for our crew who's working. Oftentimes
you know, doing one thousand dollars an hour or more
in sales and then also provides an energy for our
(15:51):
customers as well. So that ambiance and the culture we
set there I think as another key component. And then
the very last one is allowing employe to be themselves
and to be authentic and certain brand. You know, it's
a balance because certain brands want to have people be
very uniform in what they wear or what they say.
(16:11):
While we do have pretty solid guidelines, we also want
people to be authentic, right, You're gonna get the best experience,
and so just letting people be themselves. They actually had
me record our marketing team had me record a whole
bunch of gen V sayings last week, some SMB real
and I learned some phrases that I had never heard before, so.
Speaker 2 (16:29):
I didn't.
Speaker 1 (16:32):
We got to share a couple of those. Come on, man,
what what.
Speaker 4 (16:36):
Was your favorite?
Speaker 2 (16:37):
Well?
Speaker 5 (16:37):
I knew one that was I was like, this slaves
or this eats. I'm like, I've heard that. But the
one that I had never heard that I was like,
I got to look this up was flop era and
that clutch doesn't I guess flop era being defined as
like not great, and so you know, clutch will help
you avoid flop eraop era?
Speaker 1 (16:59):
Is that one word or two words? Two words? Flop era?
I mean, we've got some gen zs in our in
our own team, and they're constantly teaching me the new
glossary of the English language, which is fun. Hey, Rudy,
this is getting right into your your wheelhouse because he's
he's saying all the buzzwords that I hear you say
(17:19):
all the time. Let them be authentic, let them do
these things when you analyze this brand, and you and
I got a chance to kind of break it down
a little bit before Darren came on, and you look
at the first of all, I don't know, are those
employees that are on your TikTok page and your Instagram
page or are those influencers primarily primarily employees.
Speaker 5 (17:40):
There's a few, there's a few brand ambassadors, okay, and
that's a whole other topic that I that I'm passionate about.
It goes a few of them on there, but a
lot of them are actual employees.
Speaker 1 (17:50):
So, Rudy, back to you on that is when you
when you look at getting a brand, especially with a
gen Z audience, Because I feel like you know certain
brands when you start hiring gen Z and this we
hear from you. You know, we've heard this from many operators.
Is they come and they think of it as a job,
or they think of it as something special, you know
(18:10):
that's beyond the job, whether it's a reach into the community,
something that they're doing for their career. What is it
that kind of is the trigger that can get them
to go one way versus the other.
Speaker 3 (18:22):
What I love just having met Durren in the last
three minutes, right, is a sincerity. Dare I use the
word authentic? Authenticity? This says, hey, let's be real and
if these are the values in the company, organic, sustainable, energetic, colorful, alive,
(18:47):
that we live it, eat it, breathe it. It's not
just this idea and after initial training is over, that's
the last I hear of it.
Speaker 2 (18:58):
Right.
Speaker 3 (18:58):
It seems to me sounds like, especially on an one
thousand dollars.
Speaker 2 (19:03):
Hour ring, you're living this, breathing.
Speaker 3 (19:06):
The concept constantly, and the values are intrinsic in the
dialogue up to and including the vocabulary and the language.
And somebody with as much gray hair as me can
actually play and.
Speaker 2 (19:21):
Fit in and be okay with it.
Speaker 3 (19:23):
Right, So there is the contact where I'll bet you're
even though Z is the sweet spot, perhaps you're seeing
a broadband of guests coming through and that's growing in
your growth.
Speaker 2 (19:42):
I'll bet.
Speaker 4 (19:45):
Yeah, that's a huge part.
Speaker 5 (19:46):
And I think you know, the mantra we have as
a company is that we exist to serve positive energy
and that can take a lot of forms, right, Like
you have the liquid version of the caffeine we're serving,
but I think it's also emotional energy and a psychological
aspect so to speak. Right, you learn more about your
(20:08):
regular customers than you probably care to know because they're
just eager to share and talk and build that relationship.
So we have a culture board in each store that
just is the reminder. It's like, hey, this is the
purpose of why we're here, right, we exist to serve
that positive energy.
Speaker 1 (20:24):
Well, I think this is something that we have not
seen too much of, at least in the past casual sector,
when you look at brands that are building based on
something like this, where they're trying to deliver something that
is beyond the fourth wall, you know kind of scenario,
which is I want to make your day great once
you leave here, hopefully it's done something that kind of
(20:46):
affects you for the rest of the day. Back to
your point on positive energy, that's that's something that first
of all, that's a big that's a big ask for
you know, young people to come out there. What is
the selection process to be able to get those kinds
of staff members into Clutch Coffee.
Speaker 4 (21:05):
It's hard.
Speaker 5 (21:06):
It's definitely not the challenge. It's hiring the challenge. I'm
not going to sugarcoat that. The biggest thing I think
we look for is the intangibles. So number one, you know,
do you have an outgoing personality? Are you not afraid
to talk to people? Because this job very much does
involve doing that, especially the way that we take orders
(21:26):
and the way that we have someone at the window.
Speaker 4 (21:28):
The window never closes.
Speaker 5 (21:29):
Someone is completely focused on having a conversation versus the
windows closing. So the intangibles I think are really important.
Are you know, are you outgoing?
Speaker 4 (21:38):
And do you have an ability to speak with people?
Are you coachable? Is huge?
Speaker 5 (21:44):
And because I don't people will say, oh, I've worked
at Starbucks before, I have this great resume. I actually
don't care if you Sometimes it's it's harder habits to break.
I'd rather you just say hey, I'm coachable and we'll
teach you everything you need to know. I hope we
provide you with some life skills to take to wherever
you go and xt. So I think the that being
intangible on being coachable and then reliable is a big one, right.
Speaker 4 (22:07):
And if you test things we can teach other well, how.
Speaker 1 (22:10):
Do you test that before they become an employee? Can
you test that in any way?
Speaker 4 (22:16):
You know?
Speaker 5 (22:16):
In terms of the in terms of the ability to communicate,
you usually can pick up pretty quickly whether someone is
you know, how long or how short are their answers?
Do they actually give you more depth and layers than
just you know, what do you enjoy doing?
Speaker 2 (22:30):
I don't know, like, well, y.
Speaker 3 (22:33):
Yeah, what if I jump in here. Two things that
just jump out during as I'm listening to you is
you're selling energy as much as coffee is to your point,
is one of the vehicles, but the energy ends up
being purpose Paul, when you're talking about culture, I'm here
(22:57):
to sell energy and the brand and with culture board
you've got up and the training you're doing all those
pieces and coffee is the way we do it. But
so is the engagement. And I would make the case
then to the interviewing that the same way we might
have done in different generations to do a stage in
(23:19):
a kitchen, you know, to go ahead and offer, hey,
put me in coach, I'll show you.
Speaker 2 (23:24):
I'll do this for free for the day.
Speaker 3 (23:27):
Whatever is like, we can create exercises in interviews that
create a mini stage if you will about hey, give
us a five second greeting, right, show me the energy?
Speaker 2 (23:42):
Right?
Speaker 1 (23:43):
Well, And I think that's one of those scenarios that
many people because hiring right now, it's just the job
force itself is already very depleted in terms of getting
the right.
Speaker 2 (23:55):
Hundred percent people.
Speaker 1 (23:57):
And now you're leveling up here trying to grab a
certain level of gen z even to a millennial. Probably well,
and you could getting right of the match.
Speaker 3 (24:06):
And dare I go here and Darren, I may be
stepping all over you, and I apologize if I am,
but to that point of am I teachable there? You
guys might be doing this maybe or not, but literally
we could set up an exercise that would be let's
take two minutes out of an interview and let's teach
(24:29):
you something and see how adaptable you are to this exercise, right,
that's actually very doable. So from a this is the
gestalt to me, you know, bubble it out, but literally
the interview has become experiential in real time in minutes
(24:51):
and yeah, as opposed.
Speaker 1 (24:52):
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(26:21):
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com use our link down below to get started. See
you there. Well, I think the key here that Clutch
has been able to do is the one they've identified,
you know, a brand that has separated in the coffee category,
which is hard to do, and now you're doing it
(26:43):
in a way that's got the hopefully the right kind
of talent. Because this is something you know, Rudy and
I brought up before you came on, is that there's
many new brands here in Miami where I'm from. That
looks so slick on the outside, but when you go
inside and you meet and get the great they're heartless.
(27:03):
You know, it's a bad service. They just could care
less that you're there, you know, those kind of things.
So there's a lot of that that has fallen upon
the fast casual category for sure. Do you think it's
because of your location? I'm kind of curious because I'm
looking at your map and I think Southern hospitality, you
know kind of thing.
Speaker 4 (27:23):
What is I have a great story about this, actually, Okay,
go ahead. Well I'm helping, and.
Speaker 5 (27:27):
Before I tell the story, I will if you're down
in Miami, I'll give a shout out. One of my
good buddies, uh started his own coffee brand down in
Fort Lauderdale, So if you haven't checked him out, I
would recommend it. It's what is a Cali Cali Coffee
c A l I. Okay, Craig and his fiance Rose
started it around the same time we started Clutch. He
(27:49):
also worked at Dutch Bros. Great guy, and they've built
a rating following down there as well. And so I
think that's relevant to your question of like, is this
box into Southern hospitality.
Speaker 4 (28:01):
And so.
Speaker 5 (28:03):
I won't call this a joke, but the funny part
about when we opened in the South and we opened
in Charlotte, what we brought experience wise and our core
values of how we were going to treat customers and
create that experience coming from the Northwest. I'm from Oregon
originally bringing that down there. When we went down there,
(28:23):
we said, okay, we're going into the belly of the
beast on customer service, right, like we said, southern Southern hospitality.
Speaker 4 (28:32):
And what we really learned quickly.
Speaker 5 (28:35):
Was like our level of expectation and our bar was
higher than anything that was there. And I think it
transcends geography and it comes down to do you really
care about delivering the best customer experience? And I think
the brands that emulate that the most that you could
see on a national scale six LA obviously, and then
(28:55):
now Dutch growths with having a thousand locations has continued
to grow that. And so we were kind of laughing
to ourselves as to Oregon boys starting it down there
was it was like, hey, yes, people are a lot
friendlier I would say, down there of greeting you saying hi.
But the customer service experience. Even going to a Starbucks
(29:15):
or a Duncan down there was still just a transactional
Starbucks or Dunkin experience.
Speaker 4 (29:20):
It wasn't much well.
Speaker 1 (29:22):
And I think that's the good name for the brand,
that Southern hospitality that you guys have been able to bring.
The branding itself very transcendent in terms of the space
because it's really attaching well onto other things. Because I
want to hit on one other thing before we wrap
up here. One of the things I wanted to hit
on was your rewards program. So I'm showing your app.
(29:43):
Let me bring it up real quick, and I got
a chance to take a look at this. First of all,
I was really impressed that you guys really had for
the number of units that you have. Normally you don't
see an app that is this well done. Not that
this is a bad thing, good thing, but it's just
you normally don't see it. So what was the process
for you guys to build your reward program and how
(30:07):
did you do it?
Speaker 4 (30:09):
Great question, So I'll give you a high level.
Speaker 5 (30:12):
We started back in the day, like every coffee company did,
most of them that were from the West coast, if
you will, which was buy ten drinks and get one free,
and that was the very cookie cutter with a stamp card,
which can be abused to the in degree, but that's
a separate story. And so we went from having that
(30:33):
the first i'd say, for three years three and a
half years, and then we shifted to a point space system,
which did a couple of things for us.
Speaker 4 (30:42):
One, it allowed us to gamify.
Speaker 5 (30:45):
In a similar way to other brands Starbucks being an example,
where you earn points based on spending. Ours happened to
be ten points for every dollar spent. Okay, But it
also allows us to have more flexibility as the market changes,
right as coffee prices have gone sky high, we can
adjust redemption levels versus just being boxed into by ten
(31:08):
get one free, which mathematically is a nine percent standing discount.
Speaker 1 (31:13):
What we go ahead? Go ahead?
Speaker 4 (31:16):
I think you were doing?
Speaker 2 (31:16):
That?
Speaker 4 (31:17):
Was we we focused on developing an app. I was.
Speaker 5 (31:20):
I was actually told by our old point of sale
provider that creating an app wasn't the way to go,
that PWA with a progressive web app and ordering online
was the future, which I wholeheartedly disagreed, disagree, stuck to
our with you man, and I want people to be
centralized into. If you're going to be committed to the
brand everything we share messaging wise.
Speaker 1 (31:38):
Bring them in the ecosystem exactly. I agree as well
with that. You can do things that we've started to
see some brands be able to do, and that is
create these milestones or these quests so to speak. And
they could be everything from brand quest, you're posting on
something on social, you've done something that is interesting for
the community, whatever it might be. But they can layer
(32:01):
into these and you can only do that when you
have these these community based platforms like what you guys
have been able to build. So that's very cool. When
you look at the category right now, your history, you know,
when you look at your history in the coffee business,
you've been with big brands, You've seen this business for
a while. Why stay in the coffee business? This is
(32:25):
very competitive? You know, it's not easy. Why stay here
and not just go hey, I'm gonna spin up a
nice bakery cafe.
Speaker 4 (32:33):
Yeah, good question. I think.
Speaker 5 (32:37):
Well, one thing that when going through COVID, I think
we were very fortunate with how we were set up
in that model that we you know, a lot of
bakeries or walk in cafes didn't survive that because they
weren't set up to be able to do takeaway if
you will. But to answer your bigger question about why
stay in the space as it does, because it is
getting very crowded, very saturated, oversaturated. I think what you
(33:00):
will see over the next five years is you'll see
a lot of consolidation in the market. I think it's
going to become My prediction is it'll be a coke
versus Pepsi war of what we'll call the new wave
of drive through. So that's not Starbucks, that's not Duncan,
that is Dutch Bros. And the other big brand that
I believe will emerge to compete with them on a
(33:21):
national scale is Seven Brew. Yeah, who's backed by Blackstone now,
so you know, a lot of powder and a lot
of strategic you know, firepower behind them. So I think
you're going to see some consolidation. You will see some
roll ups. There are still more brands trying to get
into this space now. I think it's probably a little
late to enter if you haven't already built a brand.
(33:43):
I might be a little biased, but that's kind of
what I see happening.
Speaker 1 (33:46):
Well, there's been. I mean, we've had Ziggi's on. We've
seen the drink concepts start to roll out with you know,
Fizz and Swig and many of these are doing this.
Now you have the coffee brands that are also going
into dirty soda or and or augmented drinks. You know,
they have these power stuff. And that was my next
question for you in terms of the menu. When you
(34:07):
look at the menu, and I'll bring your guys's menu up,
how focused in on just coffee oriented products are you?
Is there a future for you guys to go beyond that.
I know you have the amped, the classics and the
energy already kind of in place. Is this kind of
the framework for what you guys are going to build
(34:28):
or do you have something waiting in the wings?
Speaker 5 (34:30):
I think product innovation is really key in our space.
And actually if you click on the full menu image
button there, it should show you the full spray of
our menu there if you want to look at that
on the website.
Speaker 4 (34:43):
But there you go, there you go.
Speaker 5 (34:45):
So interestingly enough, right, like the energy drink category that's
very much a gen Z and younger rifle point. People
have shifted their caffeine consumption habits and that's twenty percent
of our product. Next, so one out of every five
drinks to go out the window of energy drinks already.
Speaker 4 (35:05):
And then I think, yeah, and I would.
Speaker 5 (35:07):
Say we have a little bit more variety than most
coffee brands do with a lot of them will have smoothies,
but like having the refreshers.
Speaker 1 (35:16):
These are great names, these are fantastic names. Oh my god,
go ahead. I'm sorry, thank.
Speaker 5 (35:24):
You, No, no, I appreciate it. So, I mean our
goal here is if someone says, well, I'm not a
coffee drinker, cool, we have eight other things that hopefully
I think we'll capture someone.
Speaker 4 (35:34):
That's the goal.
Speaker 5 (35:35):
There is the argument that can be made that the
menu has too many things, so that's always an internal
push and pull to to find the right balance there.
But I do think it's it's product innovation. And the
big thing right now is is cold foam. We call
it sweet top. I think that is a really nice
drink and answer and an up charge. It also allowed
(35:57):
a platform, if you will, to put other talkers on
top of that. Sure, it just kind of comes to
liquid dessert.
Speaker 1 (36:03):
Explain the cold foam, because that was something when I
was looking through the menu the Clutch Energy, you know,
just for everybody in case you missed it on the
video side, Cocoa Loco, Electric, Star Dust, Passion Sunset. I
was like, these are perfect for attracting the right kind
of audience, which is you know, as you know, vocabulary
(36:25):
is everything to gen Z, you know, which is is
kind of cool. Explain the coll foam, How does it work,
how do you make it? What's the process?
Speaker 5 (36:35):
So some some places like Starbucks will actually hand whip
it up for each drink, which I think is a
little labor intensive for us. So we have a brand
that we use a lot of brands use the same one.
It's called Riches on top okay, and it literally is
a pre made cold foam. It tastes great, and it
(36:55):
comes in in a cart and we have it in
squeeze bottles that make it really fast to be able
to do this, and so people will add it to coffees.
They'll actually put it on top of the energy drinks,
which sounds wild, but it's a hit and people enjoy it.
Any beverage that's served over ice can have it added
to it, and it's just kind of a nice suite,
(37:16):
like almost like a whipped cream on top of it,
but a little bit different texture to it, and we
promote it pretty heavily on a lot of our drinks,
just because I think it's a nice compliment and it
adds a dollar to any beverage.
Speaker 1 (37:30):
Last question for you is the challenges in the space.
Obviously a crowded market. We've seen this in pizza fast
casual pizza. We've got overrun, we started seeing failures, and
we started seeing consolidation. I kind of think Chicken might
be there now, you know there's so many Chicken brands,
(37:51):
and then you look at drive through coffee because to
your point, you hit on several of the major brands
that have done a fairly good job with this. What
is if you look out two, three, five years out,
what's the biggest thing you see coming down the pipe
for you in terms of competition.
Speaker 5 (38:09):
I think the biggest challenge competition wise is because there
are so many brands that are competing, You're seeing the
cost of real estate just go through the roof, and
part of that is impacted by other sectors, not even
in the coffee or QSR space, like car washers are
driving the price crazy, even down in South Florida and
(38:30):
so it's a really interesting thing to see where then
you have more competition for prime spots, right, you don't
want to be out positioned, and then brands either start
taking more risks or they sign up for one and
it ends up not being able to fulfill and then
you'll see that become a vacant space later. So trying
to be disciplined on what we sign. I mean, I
(38:52):
know I have enough contacts in the industry. At some
of those bigger brands, there's leases for them being signed
north of two hundred thousand at this point, and so
just trying to be disciplined but also competitive to make
sure you're not missing out on great spots.
Speaker 1 (39:06):
Well into this Forbes article, we'll kind of end on
this gen Z mindset is changing coffee. So it's literally
the way that brands are addressing kind of this next generation,
both from a culture standpoint, which you guys have been
able to do pretty well at your brand with Clutch,
but I think also is the dynamic of menu introduction,
(39:28):
the marketing model that you guys are using, whether it's
influencer based, all that kind of stuff, and then building
that culture which is sounds like you're on the right track, Rudy,
what do you think.
Speaker 3 (39:38):
Well, I'm just sitting with so much appreciation I and
the big takeaway for me is, Darren, you're able to
I so appreciate the clarity of what you're doing. You know,
what is the market you're getting into, that you're selling
(39:58):
energy right and captivating an age group, and that you
could own here's the sentence. I guess that I can
own that. It's not so easy to find great folks. However,
they are out there number one and number two. I
better be paying attention to things like real estate per
(40:22):
square foot, ring hours as well as right. All of
those pieces are part of success in a brand. It's
not just one little thing. And at the heart of it,
to your point, Paul, is culture driving the brand.
Speaker 2 (40:39):
And my takeaway from the interview is you're exuding culture.
Speaker 4 (40:43):
Dude.
Speaker 1 (40:43):
You're just well and they're delivering and delivering something that's
more than coffee, you know, which is hard. That's a
super hard thing to do. Guys.
Speaker 3 (40:51):
You know your values, Your values are alive. At least
it's coming across from me and allowing a group that
a lot of folks are just laughing off to go no, no, no,
there's power here big time y.
Speaker 1 (41:07):
So yeah, a lot to talk about there. On coming
podcasts you guys check out Clutchcoffeebar dot com. You'll get
a chance to see Darren's brand in full motion, all
the things he's got going on over there. And of
course fantastic that you guys have been able to open
up so many locations. Last question, are you planning on
moving out of the Southeast and moving elsewhere?
Speaker 4 (41:32):
I think we really want to try to densify the
area that we're in.
Speaker 5 (41:35):
I mean we actually at one point we're really exploring
South Florida and trying to grow in a second market there.
And when you spread your resources that fin at least
being as small as we are, it makes it challenging.
So I think our goal is to do a better
job of building on the brand awareness and recognition in
the markets that are more mature for us, and fill
(41:56):
in a little bit more so, probably staying focused in
the Carolinas.
Speaker 1 (42:00):
Excellent, Hey Darren, it's been great having you on. Thank
you so much for coming in on the podcast today.
We appreciate it.
Speaker 3 (42:06):
Continue success, Yeah, thank you, absolutely, all.
Speaker 1 (42:10):
Right, crazy times ahead here with this guy. Clutch Coffee
definitely in the right place at the right time. This
is a good one, I think. You know, when we
started doing the research on this, we had seen this
a little bit with Ziggy's, you know, we had the
Brandon on the other day, and I was just amazed
at the amount of great coffee brands that have emerged
in the last just few years. So, man, this is
(42:32):
going to be a big one to cover for sure.
Speaker 2 (42:34):
Well, I think so.
Speaker 3 (42:35):
The other piece that's interesting to me is as saturated
as we might say coffee is, right, or the beverage
drive through thing. The competition I was always trained and
is still believed devoutly. All that competition just makes us
look better, look better. We keep playing higher, right, we
(42:58):
keep raising the bar.
Speaker 1 (43:00):
Well, he's the only brand too that I've seen that
is marketing more than coffee, you know. I mean, it's
not even a drink business. It's almost like they're defining
some kind of delivery vehicle for good, you know, goodness
out there.
Speaker 2 (43:14):
But that is purpose personified.
Speaker 4 (43:17):
Yeah, right now.
Speaker 3 (43:18):
The purpose of our business is to get this thing
and how we do it as food and beverage, in
this case, beverage beverage, beverage, Bravo Darren.
Speaker 1 (43:27):
I love it, man, okay man. We're going to get
back to you guys on another episode here on Masterminds
is going to be fantastic. We'll get Molinari back in
the mix, Stacy's coming back in. We've got a lot
coming down the pipe for you guys here on the podcast.
If you're not checking out sav dot fm, make sure
and do. That's where we catch all the podcasts here,
and of course catch us on YouTube, which is just
(43:48):
saver Fm. You'll find us over there. One hundred and
seventy thousand subs over on YouTube. That's crazy. We just
passed one million viewers in the last year, so fantastic.
You guys, keep it up out there and we'll catch
you next time right here other Masterminds the podcast
We are back here on the Restaurant Masterminds podcast, and
today it's going to be a hot one because we're
going to dive into gen Z and how brands are
building to match this new demographic. It is going to
be so much fun. And of course I've got mister
Rudy mccopiloting with me today. How are you? I am
so good the culture guru coming in from Mixing and Associates.
(00:23):
So the cool thing today that we're going to dive
in on is all about this gen Z audience, which
there are so many secrets. In researching this, Rudy, I
found so many weird secrets about gen Z that we're
going to talk about today.
Speaker 2 (00:40):
So, oh my goodness, I can hardly wait. It is right.
We need to keep expanding our bandwidth.
Speaker 3 (00:48):
Man, absolutely and so excited to hear more and share
with you some of what we've seen.
Speaker 1 (00:55):
I love it. All right, let's get started. We'll be
right back. My name is Paul Baron. As the early
(01:23):
pioneer in fast casual, I've seen the industry evolve from
just a few operators to the most sought after segment
by consumers around the world. Now we're planning to shape
its future. Tap into decades of my expertise identifying the
emerging brands and tech winners in the space. Saber Capital
(01:44):
will be fueling the next generation of fast casual innovation.
All right, So we're back here on the Masterminds and
today's going to be a good one because we're gonna
jump into gen Z and what kind of brands are
building that. We're actually going to have a guest on
the show today, Rudy and are going to give you
guys kind of an insight to where our direction is
(02:05):
going here on gen Z. But primarily we're going to
be focusing on a brand named Clutch Coffee Bar. And
Darren Spice is going to be joining us here in
a little bit. We'll add him to the show, so
he'll come in and once we have him in the show,
you guys, we'll kind of do a little bit of
deep dive on that. What I want to begin with here, Rudy,
(02:26):
and this is something that I think you know, we've
seen over and over across the area of brand building
is how do you match up with the right kind
of brand at the right time. And one of the
things that all brands have been trying to do is
reach the gen z audience and this particular brand. I'm
going to share this for everybody and if you, by
(02:48):
the way, if you guys are listening to the podcast
instead of watching the podcast, well come over to YouTube
right now and just search saverer fm and you'll find
us there. This is the brand, Rudy. I know you
and I kind of chatted a little bit about this,
but what they've done is really kind of create a
(03:09):
uniqueness around what is a drive through coffee concept, and
they've done a really good job with their app framework.
They've done an excellent job I think in terms of
the branding elements. Notice the colors here though, Okay, so.
Speaker 3 (03:25):
Yeah, the colors are vibrant and everything goes right to
the heart of fresh, organic, et cetera.
Speaker 1 (03:32):
Right, does this remind you of any other color that
you've seen before?
Speaker 2 (03:38):
What a tricky question.
Speaker 1 (03:40):
Okay, so to me it has a Starbucks feel, you
know when you let's go back to it.
Speaker 2 (03:46):
Let's go about shades. The shades of green are there?
Are they not? And at the same time, notice the
pink and.
Speaker 1 (03:54):
Well it's definitely got the flag. Yeah, absolutely, they've got
the flare, which I think is a big factor in
approaching the gen Z marketers. You've got to have the
right kind of brand connection colors are And this is
what I was getting at, is these secrets that I
have discovered is that gen Z has an affinity to
a certain color palette. Did you know this?
Speaker 2 (04:17):
Yeah?
Speaker 3 (04:17):
And I know this, and a spectrum within the color
palette right of vibrance.
Speaker 1 (04:24):
So and each of these things triggers certain behavior, which
I know that there has been a psychological connection to
colors before, and why brands choose certain colors, power colors,
you know, docile colors for building you know, certain times
of approaches. But in being able to build a brand
down to the gen Z level, and I know this
(04:46):
is where you and I talk about this a lot,
is the culture side, how they connect and how you're
able to make a brand, because there's two things that
happen here. Is you have a brand that truly has culture,
and then you have brands out there that fake having culture.
Speaker 2 (05:05):
You know what I mean, Well, that's culture too.
Speaker 3 (05:09):
So right, the culture exists, the question is what do
we want to do with it?
Speaker 2 (05:17):
Right? And so are we is the culture there by default?
Speaker 3 (05:23):
And we never really even talk about the values or
we never talk about why we started the business or
culture is very definitive about how we treat each other,
the quality of the product, the value of the price, right,
and that culture derivative then becomes vibrant, as vibrant as
(05:45):
some of the colors, right.
Speaker 2 (05:46):
I think that's what we're going to see with Daryl
and their group.
Speaker 1 (05:50):
Go ahead, no, go ahead and finish it. I was
just going on the sense of when you have brands
that are I mean, you know, I've ran into a
couple of these here in South Florida, which they look
so slick. Okay, they just look amazingly slick, and then
you get into the operation and you start, you know,
(06:11):
because I test them all the time I'm ordering, I
try to mess them up, see how they handle a
little bit of issues with customer service. And in some
cases some of these brands, especially down here in this
food court in Darrel, these brands break down so quickly
in terms of customer service. They have no faith in
(06:31):
what they're doing. A lot of times they're blaming someone
else on the team for what happened. Why do you
think that is when you have a brand that just
looks so dynamite on the outside.
Speaker 3 (06:45):
Well without getting too psychologically in depth here, how about
pondering how a building or the brand dress, if you will,
the colors, the content, text, the texture, et cetera. Think
about how there are people in the world that on
(07:08):
the outside look like a million bucks, but I don't
want to do a business deal with them whatsoever.
Speaker 2 (07:17):
Right, So the construct of and.
Speaker 3 (07:22):
Now let's get even simpler, regardless of industry segment. It's
much easier for an operator or a group of investors
to hold on to to physically touch the color palette,
(07:42):
the seats, the tables, the technology. I can hold on
to that stuff. But when it comes to the way
we're going to transfer the color palette to the actual
delivery of the product and the consistence of the product
that falls through, so we don't dell it. We don't
(08:05):
have the human skills, the communication skills. We it's much
easier to put dollars and cents and time into that
three dimensional tangible stuff. And it's I think one of
the real dilemmas in our industry where we're all about
hospitality and taking care of people and just relaxing in
(08:28):
a great environment, that well, wait, we can design those
experiences the same way we can design the color palette,
the brick and mortar, et cetera. However, it takes thought
and it takes time, and it's not so easy to
really define. Well, gosh, what does excellence mean in my brain?
(08:52):
So in the building, the building looks good, and it
falls apart the second we walk in the door, because
we haven't put invest in the same amount of money
and time in developing the human experience and the fourth dimension,
the space right the experience of it.
Speaker 1 (09:09):
Well, you would think that most brands that have that
kind of look and feel. We just showed a color
palette for gen Z. Yeah, and they were matching up.
I'll bring Clutch back up just so you guys have
it on the scene.
Speaker 2 (09:23):
Yeah, they were matching.
Speaker 1 (09:24):
I mean, there's a lot of the same colors that
are being matched up in this brand to what gen
Z is essentially kind of migrating to, which again I
did not realize that there was such a thing as
a color palette for gen Z. So that was kind
of interesting in itself. And I know we got Darren
coming on here in a second. Darren, I see you
(09:45):
down in the green room. Will bring you right in
in a second.
Speaker 3 (09:47):
Okay, So just for what it's worth, Paul, there are
companies out in the world that do nothing but put
together color palettes for nation, right or okay, every year,
that's crazy. This is this year's color palette, and you'll
(10:08):
see an athletic wear, in dress, street dress, et cetera.
Speaker 2 (10:14):
Right, So I mean, yeah, there's well on ways to
make them body, Yeah.
Speaker 1 (10:19):
And I think the key here is the connection when
you get brands like Clutch, which Darren is in the
in the green room right now, so we'll bring him
on and we'll get him going and it'll be a
good one. And of course the thing that we're getting at.
First of all, let's welcome Darren Spice is coming in
from Clutch Coffee.
Speaker 2 (10:37):
Great to have you.
Speaker 4 (10:38):
Thanks for having me, all right, so.
Speaker 1 (10:40):
Let's let's move you up here. So you've got a
little bit of a different quan all right. So Darren,
we've been talking about gen Z's and how they attract
two brands like Clutch Coffee. Now, you guys have done
a really good job. We've been appreciating your brand colors,
the way that you guys have created a very unique
design in your drive throughs. All that along with the
(11:02):
menu boards. We even showed some MENI board concepts, which
we'll bring back on screen in a minute. But I
want to kind of open up with, at least for
your side, is first of all, why did you go
this direction when you started Clutch Coffee? Because you could
have gone the other route. You know that cozy brown,
soft tones, that kind of thing. Tell me a little
(11:22):
about the story.
Speaker 4 (11:24):
Yeah.
Speaker 5 (11:24):
So I think for us, from our perspective on the brand,
we have a youthful brand and I think that's a
key component in looking at the color palet on what
we're going to do right, So our workforce is typically
pretty young. Prior to starting Clutch, I worked at Dutch Bros.
For almost a decade and so a lot of that
focus was on a youthful energy and something that really
(11:47):
resonated with customers. So when we looked at our color palette,
we actually went through a very extensive exercise that kind
of mapped out and tried to pair different colors that
we thought would be complimentary.
Speaker 4 (12:00):
We wanted to reflect the brand.
Speaker 5 (12:01):
So the cheat code, if you will, is if you
look on our Instagram page, our story highlight buckets are
five different colors and those are actually the five different
colors of our palette in addition to the black base.
So just warm, vibrant colors that exude energy and our
(12:22):
eye catching, I think is the route we went so.
Speaker 1 (12:25):
With that because color and I'm sure you guys know this,
but we showed this earlier, is that there's a whole
gen Z palette that's out there that attracts and there's
different levels of psychological impressions that it leaves on gen Z.
So you see a lot of brands. I'll bring this
up for everybody in case you are watching on the
(12:46):
YouTube side, if you're listening on the audio version of this,
go over to YouTube and check this out. But this
is the gen Z pallete for twenty twenty five, and
see all sorts of different color trends. And if you
look at this, there are so many color trends that
are smack dab into what you guys are doing, So
kudos too. I don't know if that was by design
(13:07):
or by luck.
Speaker 5 (13:09):
It was by design, yeah, no, it's and it's I
think we look at that age range. You know, people
are still youthful on the relative spectrum or if you
are older, let's say you're older than gen Z. You
are looking for a youthful experience, right and someone that
(13:29):
brings that energy. So you know, I'll give a little
bit of credit to the gentleman that helped us map
out the color palette.
Speaker 4 (13:36):
Used to be the head of.
Speaker 5 (13:37):
Brand design for Jordan Brand Jordan and to college together,
so it was a really fun exercise to go through
it and it's kind of cool to see maybe this
is our year to hit that exact pallet.
Speaker 1 (13:49):
I love it. Well, it seems like you're tuned in.
We are looking at your core right there with Clutch
Live DRAMs, Clutch Cares, Swag and shops, so you've got
all the key components in terms of color there on
your Instagram you mentioned, And this is the thing that
we're trying to identify in today's podcast is how to
brands connect to that gen Z audience in the way
(14:10):
that you've been able to do it. And in looking
at some of the data that we researched on Clutch,
it was one of the reasons we reached out to
you guys was first of all, you had a really
good sentiment score on gen Z specifically, so whether it's
social or it's something that is within the brand DNA
(14:31):
that is causing gen Z to really attract to this brand.
What is the secret recipe when it comes to why
Clutch is winning in this category?
Speaker 5 (14:44):
Great question. I think there's a couple of things that
stand out at the forefront. But number one is if
you want to appeal or attract to gen Z, you
need to hire gen Z. People need to be able
to see a reflection of themselves and say, hey, that
person looks like me, be able to relate to me
age wise, give them other things to be able to
connect with customers as well when they're actually coming through
(15:07):
to drive through and having that experience. So that's one
big one I think is to hire the range or
the target you're actually looking at. Another component is just
the energy and the vibe that we set in the store.
So if someone driving in visits our drive through, we
have surround sounds, speakers set up inside and out, and
(15:28):
the entire goal there is to just for're the host
of the party right for the two or five minutes
that you're there. We want to deliver a great experience,
and so I think the music plays the key part
where it provides energy for our crew who's working. Oftentimes
you know, doing one thousand dollars an hour or more
in sales and then also provides an energy for our
(15:51):
customers as well. So that ambiance and the culture we
set there I think as another key component. And then
the very last one is allowing employe to be themselves
and to be authentic and certain brand. You know, it's
a balance because certain brands want to have people be
very uniform in what they wear or what they say.
(16:11):
While we do have pretty solid guidelines, we also want
people to be authentic, right, You're gonna get the best experience,
and so just letting people be themselves. They actually had
me record our marketing team had me record a whole
bunch of gen V sayings last week, some SMB real
and I learned some phrases that I had never heard before, so.
Speaker 2 (16:29):
I didn't.
Speaker 1 (16:32):
We got to share a couple of those. Come on, man,
what what.
Speaker 4 (16:36):
Was your favorite?
Speaker 2 (16:37):
Well?
Speaker 5 (16:37):
I knew one that was I was like, this slaves
or this eats. I'm like, I've heard that. But the
one that I had never heard that I was like,
I got to look this up was flop era and
that clutch doesn't I guess flop era being defined as
like not great, and so you know, clutch will help
you avoid flop eraop era?
Speaker 1 (16:59):
Is that one word or two words? Two words? Flop era?
I mean, we've got some gen zs in our in
our own team, and they're constantly teaching me the new
glossary of the English language, which is fun. Hey, Rudy,
this is getting right into your your wheelhouse because he's
he's saying all the buzzwords that I hear you say
(17:19):
all the time. Let them be authentic, let them do
these things when you analyze this brand, and you and
I got a chance to kind of break it down
a little bit before Darren came on, and you look
at the first of all, I don't know, are those
employees that are on your TikTok page and your Instagram
page or are those influencers primarily primarily employees.
Speaker 5 (17:40):
There's a few, there's a few brand ambassadors, okay, and
that's a whole other topic that I that I'm passionate about.
It goes a few of them on there, but a
lot of them are actual employees.
Speaker 1 (17:50):
So, Rudy, back to you on that is when you
when you look at getting a brand, especially with a
gen Z audience, Because I feel like you know certain
brands when you start hiring gen Z and this we
hear from you. You know, we've heard this from many operators.
Is they come and they think of it as a job,
or they think of it as something special, you know
(18:10):
that's beyond the job, whether it's a reach into the community,
something that they're doing for their career. What is it
that kind of is the trigger that can get them
to go one way versus the other.
Speaker 3 (18:22):
What I love just having met Durren in the last
three minutes, right, is a sincerity. Dare I use the
word authentic? Authenticity? This says, hey, let's be real and
if these are the values in the company, organic, sustainable, energetic, colorful, alive,
(18:47):
that we live it, eat it, breathe it. It's not
just this idea and after initial training is over, that's
the last I hear of it.
Speaker 2 (18:58):
Right.
Speaker 3 (18:58):
It seems to me sounds like, especially on an one
thousand dollars.
Speaker 2 (19:03):
Hour ring, you're living this, breathing.
Speaker 3 (19:06):
The concept constantly, and the values are intrinsic in the
dialogue up to and including the vocabulary and the language.
And somebody with as much gray hair as me can
actually play and.
Speaker 2 (19:21):
Fit in and be okay with it.
Speaker 3 (19:23):
Right, So there is the contact where I'll bet you're
even though Z is the sweet spot, perhaps you're seeing
a broadband of guests coming through and that's growing in
your growth.
Speaker 2 (19:42):
I'll bet.
Speaker 4 (19:45):
Yeah, that's a huge part.
Speaker 5 (19:46):
And I think you know, the mantra we have as
a company is that we exist to serve positive energy
and that can take a lot of forms, right, Like
you have the liquid version of the caffeine we're serving,
but I think it's also emotional energy and a psychological
aspect so to speak. Right, you learn more about your
(20:08):
regular customers than you probably care to know because they're
just eager to share and talk and build that relationship.
So we have a culture board in each store that
just is the reminder. It's like, hey, this is the
purpose of why we're here, right, we exist to serve
that positive energy.
Speaker 1 (20:24):
Well, I think this is something that we have not
seen too much of, at least in the past casual sector,
when you look at brands that are building based on
something like this, where they're trying to deliver something that
is beyond the fourth wall, you know kind of scenario,
which is I want to make your day great once
you leave here, hopefully it's done something that kind of
(20:46):
affects you for the rest of the day. Back to
your point on positive energy, that's that's something that first
of all, that's a big that's a big ask for
you know, young people to come out there. What is
the selection process to be able to get those kinds
of staff members into Clutch Coffee.
Speaker 4 (21:05):
It's hard.
Speaker 5 (21:06):
It's definitely not the challenge. It's hiring the challenge. I'm
not going to sugarcoat that. The biggest thing I think
we look for is the intangibles. So number one, you know,
do you have an outgoing personality? Are you not afraid
to talk to people? Because this job very much does
involve doing that, especially the way that we take orders
(21:26):
and the way that we have someone at the window.
Speaker 4 (21:28):
The window never closes.
Speaker 5 (21:29):
Someone is completely focused on having a conversation versus the
windows closing. So the intangibles I think are really important.
Are you know, are you outgoing?
Speaker 4 (21:38):
And do you have an ability to speak with people?
Are you coachable? Is huge?
Speaker 5 (21:44):
And because I don't people will say, oh, I've worked
at Starbucks before, I have this great resume. I actually
don't care if you Sometimes it's it's harder habits to break.
I'd rather you just say hey, I'm coachable and we'll
teach you everything you need to know. I hope we
provide you with some life skills to take to wherever
you go and xt. So I think the that being
intangible on being coachable and then reliable is a big one, right.
Speaker 4 (22:07):
And if you test things we can teach other well, how.
Speaker 1 (22:10):
Do you test that before they become an employee? Can
you test that in any way?
Speaker 4 (22:16):
You know?
Speaker 5 (22:16):
In terms of the in terms of the ability to communicate,
you usually can pick up pretty quickly whether someone is
you know, how long or how short are their answers?
Do they actually give you more depth and layers than
just you know, what do you enjoy doing?
Speaker 2 (22:30):
I don't know, like, well, y.
Speaker 3 (22:33):
Yeah, what if I jump in here. Two things that
just jump out during as I'm listening to you is
you're selling energy as much as coffee is to your point,
is one of the vehicles, but the energy ends up
being purpose Paul, when you're talking about culture, I'm here
(22:57):
to sell energy and the brand and with culture board
you've got up and the training you're doing all those
pieces and coffee is the way we do it. But
so is the engagement. And I would make the case
then to the interviewing that the same way we might
have done in different generations to do a stage in
(23:19):
a kitchen, you know, to go ahead and offer, hey,
put me in coach, I'll show you.
Speaker 2 (23:24):
I'll do this for free for the day.
Speaker 3 (23:27):
Whatever is like, we can create exercises in interviews that
create a mini stage if you will about hey, give
us a five second greeting, right, show me the energy?
Speaker 2 (23:42):
Right?
Speaker 1 (23:43):
Well, And I think that's one of those scenarios that
many people because hiring right now, it's just the job
force itself is already very depleted in terms of getting
the right.
Speaker 2 (23:55):
Hundred percent people.
Speaker 1 (23:57):
And now you're leveling up here trying to grab a
certain level of gen z even to a millennial. Probably well,
and you could getting right of the match.
Speaker 3 (24:06):
And dare I go here and Darren, I may be
stepping all over you, and I apologize if I am,
but to that point of am I teachable there? You
guys might be doing this maybe or not, but literally
we could set up an exercise that would be let's
take two minutes out of an interview and let's teach
(24:29):
you something and see how adaptable you are to this exercise, right,
that's actually very doable. So from a this is the
gestalt to me, you know, bubble it out, but literally
the interview has become experiential in real time in minutes
(24:51):
and yeah, as opposed.
Speaker 1 (24:52):
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you there. Well, I think the key here that Clutch
has been able to do is the one they've identified,
you know, a brand that has separated in the coffee category,
which is hard to do, and now you're doing it
(26:43):
in a way that's got the hopefully the right kind
of talent. Because this is something you know, Rudy and
I brought up before you came on, is that there's
many new brands here in Miami where I'm from. That
looks so slick on the outside, but when you go
inside and you meet and get the great they're heartless.
(27:03):
You know, it's a bad service. They just could care
less that you're there, you know, those kind of things.
So there's a lot of that that has fallen upon
the fast casual category for sure. Do you think it's
because of your location? I'm kind of curious because I'm
looking at your map and I think Southern hospitality, you
know kind of thing.
Speaker 4 (27:23):
What is I have a great story about this, actually, Okay,
go ahead. Well I'm helping, and.
Speaker 5 (27:27):
Before I tell the story, I will if you're down
in Miami, I'll give a shout out. One of my
good buddies, uh started his own coffee brand down in
Fort Lauderdale, So if you haven't checked him out, I
would recommend it. It's what is a Cali Cali Coffee
c A l I. Okay, Craig and his fiance Rose
started it around the same time we started Clutch. He
(27:49):
also worked at Dutch Bros. Great guy, and they've built
a rating following down there as well. And so I
think that's relevant to your question of like, is this
box into Southern hospitality.
Speaker 4 (28:01):
And so.
Speaker 5 (28:03):
I won't call this a joke, but the funny part
about when we opened in the South and we opened
in Charlotte, what we brought experience wise and our core
values of how we were going to treat customers and
create that experience coming from the Northwest. I'm from Oregon
originally bringing that down there. When we went down there,
(28:23):
we said, okay, we're going into the belly of the
beast on customer service, right, like we said, southern Southern hospitality.
Speaker 4 (28:32):
And what we really learned quickly.
Speaker 5 (28:35):
Was like our level of expectation and our bar was
higher than anything that was there. And I think it
transcends geography and it comes down to do you really
care about delivering the best customer experience? And I think
the brands that emulate that the most that you could
see on a national scale six LA obviously, and then
(28:55):
now Dutch growths with having a thousand locations has continued
to grow that. And so we were kind of laughing
to ourselves as to Oregon boys starting it down there
was it was like, hey, yes, people are a lot
friendlier I would say, down there of greeting you saying hi.
But the customer service experience. Even going to a Starbucks
(29:15):
or a Duncan down there was still just a transactional
Starbucks or Dunkin experience.
Speaker 4 (29:20):
It wasn't much well.
Speaker 1 (29:22):
And I think that's the good name for the brand,
that Southern hospitality that you guys have been able to bring.
The branding itself very transcendent in terms of the space
because it's really attaching well onto other things. Because I
want to hit on one other thing before we wrap
up here. One of the things I wanted to hit
on was your rewards program. So I'm showing your app.
(29:43):
Let me bring it up real quick, and I got
a chance to take a look at this. First of all,
I was really impressed that you guys really had for
the number of units that you have. Normally you don't
see an app that is this well done. Not that
this is a bad thing, good thing, but it's just
you normally don't see it. So what was the process
for you guys to build your reward program and how
(30:07):
did you do it?
Speaker 4 (30:09):
Great question, So I'll give you a high level.
Speaker 5 (30:12):
We started back in the day, like every coffee company did,
most of them that were from the West coast, if
you will, which was buy ten drinks and get one free,
and that was the very cookie cutter with a stamp card,
which can be abused to the in degree, but that's
a separate story. And so we went from having that
(30:33):
the first i'd say, for three years three and a
half years, and then we shifted to a point space system,
which did a couple of things for us.
Speaker 4 (30:42):
One, it allowed us to gamify.
Speaker 5 (30:45):
In a similar way to other brands Starbucks being an example,
where you earn points based on spending. Ours happened to
be ten points for every dollar spent. Okay, But it
also allows us to have more flexibility as the market changes,
right as coffee prices have gone sky high, we can
adjust redemption levels versus just being boxed into by ten
(31:08):
get one free, which mathematically is a nine percent standing discount.
Speaker 1 (31:13):
What we go ahead? Go ahead?
Speaker 4 (31:16):
I think you were doing?
Speaker 2 (31:16):
That?
Speaker 4 (31:17):
Was we we focused on developing an app. I was.
Speaker 5 (31:20):
I was actually told by our old point of sale
provider that creating an app wasn't the way to go,
that PWA with a progressive web app and ordering online
was the future, which I wholeheartedly disagreed, disagree, stuck to
our with you man, and I want people to be
centralized into. If you're going to be committed to the
brand everything we share messaging wise.
Speaker 1 (31:38):
Bring them in the ecosystem exactly. I agree as well
with that. You can do things that we've started to
see some brands be able to do, and that is
create these milestones or these quests so to speak. And
they could be everything from brand quest, you're posting on
something on social, you've done something that is interesting for
the community, whatever it might be. But they can layer
(32:01):
into these and you can only do that when you
have these these community based platforms like what you guys
have been able to build. So that's very cool. When
you look at the category right now, your history, you know,
when you look at your history in the coffee business,
you've been with big brands, You've seen this business for
a while. Why stay in the coffee business? This is
(32:25):
very competitive? You know, it's not easy. Why stay here
and not just go hey, I'm gonna spin up a
nice bakery cafe.
Speaker 4 (32:33):
Yeah, good question. I think.
Speaker 5 (32:37):
Well, one thing that when going through COVID, I think
we were very fortunate with how we were set up
in that model that we you know, a lot of
bakeries or walk in cafes didn't survive that because they
weren't set up to be able to do takeaway if
you will. But to answer your bigger question about why
stay in the space as it does, because it is
getting very crowded, very saturated, oversaturated. I think what you
(33:00):
will see over the next five years is you'll see
a lot of consolidation in the market. I think it's
going to become My prediction is it'll be a coke
versus Pepsi war of what we'll call the new wave
of drive through. So that's not Starbucks, that's not Duncan,
that is Dutch Bros. And the other big brand that
I believe will emerge to compete with them on a
(33:21):
national scale is Seven Brew. Yeah, who's backed by Blackstone now,
so you know, a lot of powder and a lot
of strategic you know, firepower behind them. So I think
you're going to see some consolidation. You will see some
roll ups. There are still more brands trying to get
into this space now. I think it's probably a little
late to enter if you haven't already built a brand.
(33:43):
I might be a little biased, but that's kind of
what I see happening.
Speaker 1 (33:46):
Well, there's been. I mean, we've had Ziggi's on. We've
seen the drink concepts start to roll out with you know,
Fizz and Swig and many of these are doing this.
Now you have the coffee brands that are also going
into dirty soda or and or augmented drinks. You know,
they have these power stuff. And that was my next
question for you in terms of the menu. When you
(34:07):
look at the menu, and I'll bring your guys's menu up,
how focused in on just coffee oriented products are you?
Is there a future for you guys to go beyond that.
I know you have the amped, the classics and the
energy already kind of in place. Is this kind of
the framework for what you guys are going to build
(34:28):
or do you have something waiting in the wings?
Speaker 5 (34:30):
I think product innovation is really key in our space.
And actually if you click on the full menu image
button there, it should show you the full spray of
our menu there if you want to look at that
on the website.
Speaker 4 (34:43):
But there you go, there you go.
Speaker 5 (34:45):
So interestingly enough, right, like the energy drink category that's
very much a gen Z and younger rifle point. People
have shifted their caffeine consumption habits and that's twenty percent
of our product. Next, so one out of every five
drinks to go out the window of energy drinks already.
Speaker 4 (35:05):
And then I think, yeah, and I would.
Speaker 5 (35:07):
Say we have a little bit more variety than most
coffee brands do with a lot of them will have smoothies,
but like having the refreshers.
Speaker 1 (35:16):
These are great names, these are fantastic names. Oh my god,
go ahead. I'm sorry, thank.
Speaker 5 (35:24):
You, No, no, I appreciate it. So, I mean our
goal here is if someone says, well, I'm not a
coffee drinker, cool, we have eight other things that hopefully
I think we'll capture someone.
Speaker 4 (35:34):
That's the goal.
Speaker 5 (35:35):
There is the argument that can be made that the
menu has too many things, so that's always an internal
push and pull to to find the right balance there.
But I do think it's it's product innovation. And the
big thing right now is is cold foam. We call
it sweet top. I think that is a really nice
drink and answer and an up charge. It also allowed
(35:57):
a platform, if you will, to put other talkers on
top of that. Sure, it just kind of comes to
liquid dessert.
Speaker 1 (36:03):
Explain the cold foam, because that was something when I
was looking through the menu the Clutch Energy, you know,
just for everybody in case you missed it on the
video side, Cocoa Loco, Electric, Star Dust, Passion Sunset. I
was like, these are perfect for attracting the right kind
of audience, which is you know, as you know, vocabulary
(36:25):
is everything to gen Z, you know, which is is
kind of cool. Explain the coll foam, How does it work,
how do you make it? What's the process?
Speaker 5 (36:35):
So some some places like Starbucks will actually hand whip
it up for each drink, which I think is a
little labor intensive for us. So we have a brand
that we use a lot of brands use the same one.
It's called Riches on top okay, and it literally is
a pre made cold foam. It tastes great, and it
(36:55):
comes in in a cart and we have it in
squeeze bottles that make it really fast to be able
to do this, and so people will add it to coffees.
They'll actually put it on top of the energy drinks,
which sounds wild, but it's a hit and people enjoy it.
Any beverage that's served over ice can have it added
to it, and it's just kind of a nice suite,
(37:16):
like almost like a whipped cream on top of it,
but a little bit different texture to it, and we
promote it pretty heavily on a lot of our drinks,
just because I think it's a nice compliment and it
adds a dollar to any beverage.
Speaker 1 (37:30):
Last question for you is the challenges in the space.
Obviously a crowded market. We've seen this in pizza fast
casual pizza. We've got overrun, we started seeing failures, and
we started seeing consolidation. I kind of think Chicken might
be there now, you know there's so many Chicken brands,
(37:51):
and then you look at drive through coffee because to
your point, you hit on several of the major brands
that have done a fairly good job with this. What
is if you look out two, three, five years out,
what's the biggest thing you see coming down the pipe
for you in terms of competition.
Speaker 5 (38:09):
I think the biggest challenge competition wise is because there
are so many brands that are competing, You're seeing the
cost of real estate just go through the roof, and
part of that is impacted by other sectors, not even
in the coffee or QSR space, like car washers are
driving the price crazy, even down in South Florida and
(38:30):
so it's a really interesting thing to see where then
you have more competition for prime spots, right, you don't
want to be out positioned, and then brands either start
taking more risks or they sign up for one and
it ends up not being able to fulfill and then
you'll see that become a vacant space later. So trying
to be disciplined on what we sign. I mean, I
(38:52):
know I have enough contacts in the industry. At some
of those bigger brands, there's leases for them being signed
north of two hundred thousand at this point, and so
just trying to be disciplined but also competitive to make
sure you're not missing out on great spots.
Speaker 1 (39:06):
Well into this Forbes article, we'll kind of end on
this gen Z mindset is changing coffee. So it's literally
the way that brands are addressing kind of this next generation,
both from a culture standpoint, which you guys have been
able to do pretty well at your brand with Clutch,
but I think also is the dynamic of menu introduction,
(39:28):
the marketing model that you guys are using, whether it's
influencer based, all that kind of stuff, and then building
that culture which is sounds like you're on the right track, Rudy,
what do you think.
Speaker 3 (39:38):
Well, I'm just sitting with so much appreciation I and
the big takeaway for me is, Darren, you're able to
I so appreciate the clarity of what you're doing. You know,
what is the market you're getting into, that you're selling
(39:58):
energy right and captivating an age group, and that you
could own here's the sentence. I guess that I can
own that. It's not so easy to find great folks. However,
they are out there number one and number two. I
better be paying attention to things like real estate per
(40:22):
square foot, ring hours as well as right. All of
those pieces are part of success in a brand. It's
not just one little thing. And at the heart of it,
to your point, Paul, is culture driving the brand.
Speaker 2 (40:39):
And my takeaway from the interview is you're exuding culture.
Speaker 4 (40:43):
Dude.
Speaker 1 (40:43):
You're just well and they're delivering and delivering something that's
more than coffee, you know, which is hard. That's a
super hard thing to do. Guys.
Speaker 3 (40:51):
You know your values, Your values are alive. At least
it's coming across from me and allowing a group that
a lot of folks are just laughing off to go no, no, no,
there's power here big time y.
Speaker 1 (41:07):
So yeah, a lot to talk about there. On coming
podcasts you guys check out Clutchcoffeebar dot com. You'll get
a chance to see Darren's brand in full motion, all
the things he's got going on over there. And of
course fantastic that you guys have been able to open
up so many locations. Last question, are you planning on
moving out of the Southeast and moving elsewhere?
Speaker 4 (41:32):
I think we really want to try to densify the
area that we're in.
Speaker 5 (41:35):
I mean we actually at one point we're really exploring
South Florida and trying to grow in a second market there.
And when you spread your resources that fin at least
being as small as we are, it makes it challenging.
So I think our goal is to do a better
job of building on the brand awareness and recognition in
the markets that are more mature for us, and fill
(41:56):
in a little bit more so, probably staying focused in
the Carolinas.
Speaker 1 (42:00):
Excellent, Hey Darren, it's been great having you on. Thank
you so much for coming in on the podcast today.
We appreciate it.
Speaker 3 (42:06):
Continue success, Yeah, thank you, absolutely, all.
Speaker 1 (42:10):
Right, crazy times ahead here with this guy. Clutch Coffee
definitely in the right place at the right time. This
is a good one, I think. You know, when we
started doing the research on this, we had seen this
a little bit with Ziggy's, you know, we had the
Brandon on the other day, and I was just amazed
at the amount of great coffee brands that have emerged
in the last just few years. So, man, this is
(42:32):
going to be a big one to cover for sure.
Speaker 2 (42:34):
Well, I think so.
Speaker 3 (42:35):
The other piece that's interesting to me is as saturated
as we might say coffee is, right, or the beverage
drive through thing. The competition I was always trained and
is still believed devoutly. All that competition just makes us
look better, look better. We keep playing higher, right, we
(42:58):
keep raising the bar.
Speaker 1 (43:00):
Well, he's the only brand too that I've seen that
is marketing more than coffee, you know. I mean, it's
not even a drink business. It's almost like they're defining
some kind of delivery vehicle for good, you know, goodness
out there.
Speaker 2 (43:14):
But that is purpose personified.
Speaker 4 (43:17):
Yeah, right now.
Speaker 3 (43:18):
The purpose of our business is to get this thing
and how we do it as food and beverage, in
this case, beverage beverage, beverage, Bravo Darren.
Speaker 1 (43:27):
I love it, man, okay man. We're going to get
back to you guys on another episode here on Masterminds
is going to be fantastic. We'll get Molinari back in
the mix, Stacy's coming back in. We've got a lot
coming down the pipe for you guys here on the podcast.
If you're not checking out sav dot fm, make sure
and do. That's where we catch all the podcasts here,
and of course catch us on YouTube, which is just
(43:48):
saver Fm. You'll find us over there. One hundred and
seventy thousand subs over on YouTube. That's crazy. We just
passed one million viewers in the last year, so fantastic.
You guys, keep it up out there and we'll catch
you next time right here other Masterminds the podcast
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