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Sunday 21 March 2010

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Brand is a curious and powerful beast. It is because of their acute understanding and implementation of brand that Degani bakery recently added a Degani bike shop to its business empire as an apparently natural progression.

Team Degani opened in Docklands last week as a hybrid bike shop and cafe. The only passing trade they will get will be boats on the Yarra as they have opened under "Battlestar ANZ" at the watery end of Collins St.

They will need good patronage from the 6500 employees above them, but they have presumably done their research about bicycle usage, both now and in the future.

The ANZ centre has 500 bike racks, which is significantly more than the handful of available car spaces. And try driving INTO Docklands (as opposed to driving TO Docklands). The precinct has been deliberately designed to discourage motor vehicles from entering. Those who dare enter in a car at the wrong time pay a penalty in time waiting for green turning arrows and other assorted hazards.

But I digress.

How does Degani, a franchised business which started as a family-run bakery from Clifton Hill, hope to have its cake and eat it too in the world of cycling?

The answer is two-fold: Coffee and sponsorship.

Bike riders love coffee. Before or after, it matters not. Add caffeine to endorphins and they're happy. And bike rider numbers are booming.

This is purely conjecture, but it seems that some time ago someone within the Degani organisation made this connection and convinced the others to go with it.

The lure of good coffee was probably originally designed to sell more cakes. But the focus would have soon changed to ways of selling more coffee. Cyclists crave coffee.

So how would Degani appeal to this market? Through sponsorship. Degani embarked on a frenzy of cycling event sponsorships culminating in this year's inaugural Bicycle Victoria Three Peaks Challenge. The company sponsors elite cyclists and had added its name to a "Kinglake" ride well before wildfire devastated that region last year.

It has done so much work in this space that the name "Degani" has almost become interchangeable with cycling.

So much so, that when it opened it's "Team Degani" store in Docklands last week, it seemed a natural progression.

There's a small range of bikes on sale there, with the major focus being on their own Team Degani bicycles. Some of the bikes are co-branded, but there are enough purely Team Degani bikes on sale to test the concept that a company can be baking cakes one day and selling bicycles the next.

Degani is doing the same as the more established bike brands are doing - painting their name on a frame that comes out of a Chinese factory. As an example, the once iconic Australian brand Malvern Star has resurfaced as a cheap Chinese import.

Other bike shops have taken the Degani journey in reverse. For example, The Freedom Machine in Port Melbourne has had a cafe attached to its store for many years. But this was designed to attract cyclists to the store where they would be tempted to buy other gear.

One suspects that TFM wouldn't brand their own bikes for fear of revealing the origin of the frame and, thereby, reveal the shocking trade secret that frames cost next to nothing to import and, in the process, undermine the appeal of the long-established brands they already stock.

Like the motor industry, bicycle brands come with associated emotional attachments and price tags to match. The romantic Italian brands Colnago, Pinerallo and Bianche dominate the high-end of the market using much the same style of brand appeal as Ferrari and Lambourgini.

Team Degani doesn't have anything to lose by revealing that the emperor is not wearing any clothes.

It remains to be seen whether bicycle consumers will be proud to say "Look at me. I'm riding a cup of coffee and a muffin."

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