By: Shannon Lough

The choice for Canadians over where to grab a fresh cup of coffee is tough competition for cafes like Second Cup, who are in a downward struggle in the java wars.

For Second Cup, business is consistently flat but the coffee shop is dealing with a new challenge, saving their brand. Over the past two years, the trademark brown and yellow logo of a steaming cup of coffee has cost the company millions.

A trademark’s value is based on how well it’s recognized. It isn’t a concrete form of cash for a company but building brand awareness is vital to obtaining high value for a company.

In 2012, the company marked nearly a 15 per cent decline in the value of their brand, and in 2013 it declined another 18 per cent.

A trademark that loses worth inevitably damages the company’s image to investors.

Management at Second Cup assures that its trademark is “well established” and will “provide benefits indefinitely into the future.” In 2012 that same trademark cost the company $12.8-million in impairment, and another $13.2-million in 2013.

Financial advisor for HUB Financials, Scott Cottrell said that stating their brand has less value than in previous years has reflected in their financials.

“They were consistently over seven-to-eight dollars in their stock and when they indicated there was an impairment on their assets the stock dropped to four dollars,” Cottrell said.

Cottrell said their recent annual report shows the company is being more conservative and lowering their expectations for growth.

Recently, Second Cup had a slight growth in stocks since announcing at the end of last year a change in the Board of Directors. Michael Bregman, who was once the CEO and brought the company public in 1993, is now the Director.

“They’re bringing back their old ways. That tells me that they were doing something well when he was CEO and they’re trying to bring back past success,” Cottrell said.

Chief financial officer at Second Cup, Steve Boyack started working for the company this past summer when stocks were at the lowest for the year. Boyack says that Bregman’s return is part of the reason stocks are looking slightly upward.

There is a chance that stocks may improve in 2014 after millions was spent investing in research and innovation to improve the coffee brand and drive company growth.

Second Cup is still fighting to win over the hearts of Canadians by renovating their cafes and establishing the Perks loyalty program. They also launched a plan to sell their beans at grocery stores and partnered  with TASSIMO. Boyack says the goal is to build “better brand awareness.”

This is not an original marketing development. These attempts are only following the trend of other competitors and Cottrell says “it’s not a leading strategy” to revamp their trademark.

With brand names like Starbucks, Tim Hortons and McCafe embedding themselves at every corner of the street, Canada’s biggest specialty coffee shop is being overshadowed by the giants of the industry.

“In Canada we have a lot of strong competition. First and foremost Starbucks. They have probably 1,200 locations over our 360,” Boyack said.

McDonald’s became another strong competitor after putting $1-billion into renovations and launching McCafe.

Since 2011, they’ve given over 60 million cups of coffee and captured a lot of shares, it “paints a picture of who we compete with,” Boyack said.

The independent market is also vying for loyalty from coffee drinkers as well. Boyack said there are many good independent coffee shops across Canada. In Ottawa, Bridgehead has 15 locations including several key spots in the downtown area.

Second Cup may claim to have the best coffee in town, but its going to have to save its brand or be forgotten.