Woods Coffee to expand into Canada

Video: Woods Coffee expands to Canada

Woods Coffee owner Wes Herman announces the company's expansion into Canada.
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Woods Coffee owner Wes Herman announces the company's expansion into Canada.

Woods Coffee is about to expand into uncharted territory for a retail business born in Whatcom County.

It’s headed to Canada.

Owner Wes Herman announced that the Lynden-based coffee company is planning to open its first Canadian location in early 2016 at the new Tsawwassen Springs Golf Club. Woods is partnering with Shato Holdings, which is known for its ownership of White Spot and Triple O’s restaurants.

A retail location across the border is likely a first in decades for any Whatcom County business, said Jim Pettinger, whose Ferndale company UCan Trade Inc. helps businesses with cross-border commerce. Canadians currently make purchases in Whatcom County and then have the products shipped across the border. Or online orders from local companies are shipped there. But in his 30 years in this area, Pettinger can’t recall a single time a Whatcom business opened a storefront in Canada.

We need to make sure we can transfer the Woods culture into Canada.

Wes Herman, owner of Woods Coffee

Woods Coffee might find a good niche in the lower mainland, he said.

“I think it is something that could work well,” Pettinger said, noting that there aren’t many coffee shops in British Columbia with the same atmosphere as Woods.

The new Woods cafe will have the same look as many of its Whatcom County spots, including an indoor fireplace and Pacific Northwest decor. It will be near a 6,300-square-foot restaurant called Pat Quinn’s Restaurant and Bar, which is scheduled to open soon. Quinn was a hockey legend in Canada, having experienced both long playing and coaching careers before dying in 2014.

More locations possible

With 17 locations in Whatcom and Skagit counties, Woods has become a well-established local firm employing 203 people. Herman said the company plans to open one or two locations in British Columbia to make sure its ducks are in a row before potentially ramping up with more locations across Canada.

The coffee company is also continuing to look at locations south of Whatcom County after a successful expansion into Skagit County about a year ago.

“We need to make sure we can transfer the Woods culture into Canada,” Herman said. “We are (entering into) a much bigger market, and that creates complexities that we need to make sure we can handle.”

If Woods is well-received in Canada, it could mean more jobs in Whatcom County. Herman said the plan is to continue to roast the coffee beans in Whatcom County and ship what’s needed to the Canadian café. While this involves more paperwork, it’s been a relatively easy process, he said.

203Number of people currently employed at Woods Coffee

Canadians drove the expansion idea. Herman said he received plenty of feedback from his Birch Bay and Lynden coffee shops and emails every week from Canadians who had been to a Woods in Whatcom County, asking for the coffee shops to open in Canada.

Once the decision to cross the border was made, it came down to finding the right partner, Herman said. Eventually he met Ron Toigo, managing director of Shato Holdings who has a residence in Whatcom County.

“We took a long time to decide on the right coffee concept for our Tsawwassen Springs resort community,” Toigo said. “We could not find a concept in this market that had the drive-through system with the quality and ambiance of Woods Coffee.”

Keeping Woods culture is key

Woods Coffee will be entering a competitive coffee drive-through market, but one similar to Washington state, Herman said. Starbucks and Tim Hortons are among those that currently dominate the Canadian market.

One of the challenges for Woods will be introducing itself to Canadians not familiar with the coffee brand. Herman said that’s why it’s important to replicate the café as much as possible, including how employees treat customers.

“We’ve proven we can grow in a small market and keep that Woods culture, so it is super important to do that as we go into Canada,” said Herman, who was born in Canada.

Pettinger said the timing of Woods’ expansion has some advantages. With a weak Canadian dollar, materials and construction costs are less expensive for a U.S. company.

“Ultimately they would hope that at some point the Canadian dollar would strengthen, but right now the exchange rate works for them,” Pettinger said.

Woods’ first choice for a coffee shop in Canada is part of a big project in the lower mainland. Along with an 18-hole golf course that’s already in place, Tsawwassen Springs plans call for 296 condominiums, 194 houses, and retail that includes a grocer and meat shop as well as a fitness center.

Details about Woods can be found at woodscoffee.com.

Dave Gallagher: 360-715-2269, @BhamHeraldBiz

Woods Coffee timeline

A look at some of the significant events of the coffee company:

2002: First Woods Coffee founded in Lynden by Wes Herman;, second Lynden coffee shop opens six months later.

2005: Woods expands into Bellingham by opening on King Street.

2006: Coffee shop opens in Bakerview Square, marking the fifth Woods location.

2007: Boulevard Park location opens in Bellingham.

2008: Another expansion year for the company, as leases are signed to go into Sehome, Railroad Avenue and Ferndale.

March 2010: Introduces its compostable cup.

August 2010: Goes into Bellingham’s Flatiron building.

June 2011: Completes bakery, begins offering new items on its menus.

2012: Signs leases to go into Lakeway Drive building and near the Barkley movie theater.

May 2014: Launches its own roasting operation.

December 2014: Expands into Skagit County.

Nov. 10, 2015: Announces plans to build coffee shops in Canada.