Mrs. Fields Entering Coffee Field

Cookie retailer, "baking authority" testing specialty java on Chicago's State Street

CHICAGO -- Mrs. Fields, which declared bankruptcy in 2008 and now has 280 U.S. stores, is using Chicago as a test market as it attempts to re-energize with a broader menu, focusing on a push into specialty coffees and eventually breakfast and lunch, according to a Chicago Tribune report. The chain has opened a prototype for future stores on Chicago's State Street. The modern feel is more Seattle's Best Coffee than cookie stand, said the report, with the store offering lattes, ice-blended beverages and coffee flavors such as snickerdoodle and white chocolate macadamia nut.[image-nocss]

The Salt Lake City-based company is using the model to entice franchisees to convert existing stores and build new locations outside of malls.

Although there a "Debbi's signature" brew and a quote from Debbi Fields on the wall ("The only thing I had was this recipe, and with that recipe was a dream"), the founder sold Mrs. Fields in 1993.

Timothy Casey, CEO of privately held Mrs. Fields Famous Brands, which includes the cookie company and TCBY Enterprises, which is also in the throes of a reinvention, acknowledged that both brands are not what they once were. But he said they still have broad consumer awareness and positive associations.

"Both of those brands were very popular and cutting edge in their heyday and have an opportunity to make a strong comeback," he told the newspaper.

Casey, who has been at the company for a year after a five-year stint at Coffee Bean & Tea Leaf and a 10-year stay at Starbucks Coffee Co., said the impetus to add specialty coffee came from consumer research. When asked what the chain could add to become more relevant, "the first thing we heard from all of the research was specialty coffee," he said.

Competition is fierce. Starbucks has been honing its pastry offerings and has posted nine consecutive quarters of same-store sales gains. Last week, Dunkin' Donuts launched a highly successful initial public offering. And McDonald's successfully expanded the specialty coffee segment in 2009 with its foray into lattes, cappuccinos and eventually its own take on the Frappuccino.

Bonnie Riggs, an analyst with the NPD Group, a market research firm, told the paper that Mrs. Fields has high brand recognition and has been a destination for treats. "Our definition of a snack and a treat has changed somewhat" in recent years, she said, and now "specialty coffees fit into that definition."

Riggs added that specialty coffee has been a growth area for the restaurant industry, and NPD projects that it will continue to grow at a double-digit rate over the next decade.

Stacy DeBroff, CEO of Mom Central Consulting, said eating habits have changed in the last 20 years, and families are spending less time baking cookies and thinking more about eating healthy. Many will avoid temptation. "I think a lot of women would go out of the way to walk on the other side of the mall and to not even smell the cookie," she told the Tribune.

These days, "people are a lot more likely to spend $2.65 for a gourmet coffee than a cookie," she said. "And unless you're entertaining, I don't think adults are going to stop and have a bunch of cookies."

Greg Allison, senior director of marketing at Mrs. Fields Famous Brands, thinks there is room for the company in the specialty coffee business. "We're not asking for a big piece of the pie, we're asking for a sliver of the pie," he told the paper. "That's not going to be our core business."

Mrs. Fields is hoping to build its location base, which is why the company chose an urban street front to test its prototype. In these areas, Allison said, Mrs. Fields is hoping to expand its offerings to compete with chains like Panera and Corner Bakery.

In focus groups, Allison said, consumers give Mrs. Fields "baking authority" that stretches into sandwiches, salads and soups. Essentially, he said, it is looking for fast-casual offerings, decor and service, with orders brought to the table.

Allison said the additions were made possible by private-equity investors, who recently increased their stake, buying out other bondholders.

Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant industry consultancy, expressed skepticism about the chain's ability to become a breakfast-and-lunch destination. The breakfast market is highly competitive, lower margin and intensely habitual. Lunch is an even tougher sell.

"Most consumers don't consider cookies for lunch," he told the paper. "They want something healthier more traditional. It's going to be very hard to break the mold of being a cookie and dessert concept."