The Second Cup, fresh from reporting a loss of $2.4 million over its past fiscal year, is trying to perk up its image in the minds of Canadian coffee drinkers with its first national advertising campaign.

The Toronto-based coffee chain – whose losses this fiscal year (ended June 29) contrast with profits of $2.2 million just a year earlier – is battling for position against u.s. giant Starbucks.

Seattle, Wash.-based Starbucks has been steadily moving eastward since entering Canada nine years ago and last year started making inroads into prime Second Cup territory – Toronto. Starbucks expects to have 40 stores in that city alone by early next fall.

Jennifer Murray, director of marketing for The Second Cup, says the launch of the ad campaign was not a defensive move. Rather it is intended to confirm to consumers that Second Cup is the quality leader in Canada.

Murray says that, until now, the stores have been the company’s primary vehicle for communicating with the consumer.

‘I think we most definitely will continue with our stores being the foundation of our marketing strategies,’ she says, ‘but we’ve reached critical mass and we’re now able to invest in media advertising for the first time.’

The Second Cup’s radio and transit campaign, created by Durnan Communications of Toronto, emphasizes quality while reinforcing the familiar sense of community with the tag line, ‘Where the world stops for just a second.’

It began this fall and will have a longer run in markets where the coffee chain has a larger presence, with advertising in Toronto, the company’s largest market, running through May 1997.

Media placement was handled by David Cairns and Company.

Second Cup has 270 stores across Canada and expects to add another 60 to that total over its current fiscal year, ending June 1997. Much of that growth is being fueled by some strong partnerships formed earlier this year.

Cara Operations bought a 37% stake in Second Cup in May. The deal includes the conversion of Cara’s airport restaurants and 50 Roasters coffee bar outlets to Second Cup stores. Second Cup will also be part of a new Cara concept, Chalet Cafe, which is a full-service Swiss Chalet restaurant with a smaller adjoining Second Cup component.

In October, Second Cup invested $6.5 million in The Great Canadian Bagel Company – opening up the opportunity for twinned stores. It has, so far, opened four co-branded locations with the bagel operator and penned an agreement with Air Canada that will see the airline featuring Second Cup coffee on every flight beginning early in the new year.