Big ideas brewing at Liquid Planet in Missoula

Liquid Planet owner has expansion plans – and a strong belief in his business model

Liquid Planet (406-541-4541) will become a national company if co-owner Scott Billadeau has any say in the matter.

By ROBERT STRUCKMAN of the Missoulian

http://missoulian.com/articles/2004/09/20/business/bus01.txt

"I know it sounds crazy, but I want to raise the culture of drink in the United States," he said.

He’ll have to buck a national trend to do it.

The downtown cafe at 223 N. Higgins Ave. opened about a year ago. The emphasis is coffee, although the business offers everything related to drinks, from beer and wine to fancy wine openers, from designer coffeeware to beans and books about anything you gulp down.

And coffeehouses don’t work as chains, said Armando Escobar, a Columbus, Ohio, consultant to coffeehouse owners across the nation.

Starbucks is the exception, not the rule.

Despite the worldwide image of Starbucks, the seemingly ubiquitous Seattle-based coffee chain which recently arrived in Missoula, the retail coffee industry is dominated by more than 20,000 owner-operated independent businesses.

As a general rule, coffee chains rarely are successful with more than a dozen outlets, Escobar said. A few chains number in the hundreds, but nobody has close to Starbucks’ 8,000 company-owned stores in North America.

"There is no No. 2 to Starbucks," he said.

Nobody really knows why copycats have failed to succeed.

Sales trends do suggest that the door might be open for another chain with the right stuff. Sales at independent cafes have been declining in recent years, while the biggest chains, led by Starbucks and Barnes & Noble cafes (which sell Starbucks-brand coffee) have been gaining.

"The independents are not doing it right, in general, and that’s why numbers are falling," Escobar said.

The remedy?

"Focus on espresso-based beverages, and do it well," he said.

"If you try to do too much, you’ll send mixed messages. Too much confuses the customer base."

"I don’t agree," Billadeau said.

He wants to do it all.

The strength of Billadeau’s plan may be that his approach is so different, so counter-intuitive. He might be right. He sure thinks so.

Liquid Planet offers customers a wide number of options. As far as the space itself, there is a free conference area at the front of the store, open to reservations. Across the entranceway is an area of soft couches and shelves full of books, what Billadeau calls the library. The books, of course, are for sale, not to lend.

The front has natural light. The rear is darker, a place to "get away from it all," Billadeau said. There’s a retail area on one side and intimate seating on the other. There are computers back there, too.

In the middle of the store is a huge globe-shaped wine rack and beer section and a long, curved coffee bar where baristas serve a range of eatables and drinkables, including crepes.

On Friday morning, a young man with earphones typed on a computer at the bar. Three others sat in the library, sipping from frothy cups. A guy wearing jeans and a weathered baseball hat bought a sampler box of international beers. A woman perused the globe of wine. A few people stood in line at the counter getting drinks, and about 30 people sat at tables in the rear area.

The store bustled. Billadeau has been hustling, too.

He has been all over the map. Liquid Planet has expanded into the airport. He and his co-owner have "substantially" invested in a local coffee mug company. Liquid Planet’s Web site will be up and running in the next few weeks. Soon the company will also deliver coffee and other beverages. Billadeau talks about expansion opportunities in big cities on the West Coast.

Prospects look bright for such a young company.

It wasn’t always that way.

At the beginning of last November, the store’s honeymoon period had ended. Traffic through the doors had slowed to "mediocre," Billadeau said. There were almost no retail sales.

"I had to relook at the inventory of the entire store, every single product, every single margin. It was pretty darn tough," he said.

He completely stopped marketing. Then he studied the media market and selectively bought some television and radio commercials. He tried to figure out how to draw more people into the store.

"There’s a huge segment of Missoula that comes downtown about once a year," he said.

People still see the sign, walk in and express surprise that the store exists.

"It’s mind-boggling, but I guess it means we still haven’t reached our whole market," Billadeau said.

Despite the slow start, Liquid Planet broke even its first year.

As for the Starbucks comparison, Billadeau won’t try to be something he’s not. In fact, he bridles at the comparison.

"That’s a coffee shop. I sell all things beverage. Starbucks wouldn’t work in a space like this. They raised the bar to here. I want to raise it to here," he said.

Reporter Robert Struckman can be reached at 523-5262 or at [email protected].