He Likes Coffee

September 8, 2006 – 2:43 pm

Memphis Business Journal
September 8, 2006

With four retail outlets, High Point Coffee is only about 12,000 shy of challenging the dominant coffee retailer in the country.

But owner Thomas Blanche is no fool. And he may enjoy his product, but not enough to give him such a caffeine high that he starts to believe he can possibly challenge the 800-pound barista Starbucks.

“I started with the simple idea of being a regional player, really not knowing how to get there,” says Blanche, 51, who has spent most of his career in food service management with companies like Ponderosa Grill and Cracker Barrel Old County Store before working with airport concessionaire Host Marriott.

A long-time coffee connoisseur, Blanche honed his skills with Marriott, opening Starbucks stores in airports before starting his own chain of coffee shops.

Blanche opened Uptown Coffee House, located north of the Oxford Square, in July 2002. Determined to create a different yet similar Starbucks experience — they have the feel of a national chain without being one — Blanche poured $125,000 into the 1,760-square-foot store and then two years later shelled out another $80,000 for custom cabinetry.

The first High Point Coffee shop opened at Poplar and Perkins Extended in May 2003. In December 2004, he opened an Uptown Coffee House in Tupelo and in April of this year another High Point at Union and Belvedere.

Blanche currently lives in Tupelo where his wife is an anesthesiologist. He travels to Memphis at least twice a week to check on the stores.

It wasn’t Blanche’s decision to operate one coffee business under two names, he says, but when he leased the location at Poplar the landlord preferred he pick another name. He picked High Point, not for the popular Memphis neighborhood, but because most of the best coffee beans are found at the highest elevations.

Separate names, he says, hurts sales because there’s no obvious connection between Uptown and High Point and he eventually plans to operate all the stores under just the High Point Coffee name.

Still, despite the two names, sales for the most part have been strong.

Oxford’s sales are growing at about 13%-15% annually, and the location at Poplar is increasing 4%-7% year-over-year, Blanche says.

He declines to give specific sales numbers, but says the industry average for sales per coffee house is $350,000-$450,000 and the combined sales for his stores average about 25% above that.

Getting those sales have come at the cost of locating stores in prime locations, outfitting them with nice fixtures and trying to provide a competitive product, he says.

One way of ensuring that quality came in August 2003 when Blanche and his wife’s brother-in-law, Dan Skinner, partnered to open the wholesale roasting business High Point Coffee Roasters in New Albany.

The roastery gets beans from a dozen countries and supplies both Blanche’s stores and customers in a five-state area. It has shipped to 25 states from Maine to Washington and the coffee blends he and his partner created during their training won first place. There are now plans to add a second roaster at the New Albany operation.

While the roasting business has proven successful, the focus is not so much on growing the roastery but rather the coffee shops, Blanche says.

“If you grow the coffee shops the roastery will grow,” he says.

In addition to striving to have the best blends of coffee, Blanche says he looks for the unusual food items and other non-coffee drinks. He carries a line of popular cakes from West Side Barbecue in New Albany and the new Union store bakes scones, muffins and cookies on-site. His experience in food service helps him know how to work with his suppliers to get the best products at the best prices, he says.

And then there’s his staff, led mostly by former Starbucks managers and staff who love coffee but wanted to work in a more relaxed, less corporate environment. Both managers in Memphis, Diana Shull and Melissa Mann, cut their teeth at Starbucks.

Shull, manager of the Union store, left management at Ann Taylor to join High Point even though it meant a cut in salary. She worked at Starbucks for a year before being recruited away to the woman’s apparel company.

Blanche’s passion for coffee and his mostly hands-off management style attracted her.

Shull says High Point can compete with the likes of Starbucks because of its focus on coffee, something that has become secondary at her former employer.

“It’s not about the coffee anymore,” she says of her one-time employer. “It’s a marketing machine.”

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