Offer the Right Blend

Coffee has become quite the cultural phenomenon in America. Packaged Facts, a division of Rockville, Md.-based MarketResearch.com, states in its April “Coffee and Ready-to-Drink Coffee in the U.S.: Retail and Foodservice” report that 83 percent of American adults drink coffee, and 45 percent of American adults drink coffee daily. The vast majority of grocery shoppers, therefore, are potential coffee purchasers.

For retailers, then, the coffee category could be a great place to set a store brand’s standards because great coffee creates loyal shoppers, says Alton McEwen, CEO, Distant Lands Coffee, Renton, Wash.

“When people find a brand of coffee they love at a great price, they will return to purchase it again and again,” he says. “Consider it a ‘gateway’ product. If people love the store brand coffee, they will be more likely to purchase other products under the store brand name.”

Get ’em young

Younger coffee drinkers, 18- to 24-year-olds, typically drink coffee less than once per week, Packaged Facts reports. Retailers might want to do more to court this young demographic and encourage the onset of a coffee habit at an earlier age, either with unique coffee formats or functional attributes.

One unique format retailers could consider are multi-serve coffee concentrate bottles, says Tarick Gamay director of sales and marketing for Alexandria, Va.-based DreamPak. The coffee concentrate bottles allow consumers to add the coffee to hot water or to milk and to customize the strength of the coffee flavor. And it’s the ability to customize their drink that will really resonate with these younger consumers, who are used to going to a coffee shop and ordering a beverage that was made just for them.

Another way retailers could attract younger generations is by embracing limited-edition offerings or seasonal flavors, says Robert Johnson, vice president of sales and marketing, Magnum Coffee Roastery, Nunica, Mich. Five years ago, females 45 years old and older made up most of the flavored coffee drink demographic. But now younger consumers are looking for flavored coffees that mirror their coffee shop experience.

Many of the coffee “regulars,” meanwhile, are consumers who are increasingly willing to spend more on better-quality coffee, McEwen says. No longer just a “get-up-and-go” tool, coffee is becoming a luxury, a sought-out pleasurable experience.

Coffee is similar to craft beer, says Darron Burke, president, Miami-based Burke Brands LLC. Quality is becoming ever more important to the consumer, and this reality will eventually be reflected in considerable market share shifting away from the large national brands to those brands that have made the commitment to offer a high-quality product.

With this emphasis on quality and luxury, retailers might want to reconsider how they market their coffees, especially instant coffees. The word “instant” currently has a negative connotation in America. So, retailers might want to use a term such as “micro-ground,” which has a premium connotation.

In addition to marketing instant coffee in a new way, retailers need to educate the consumer about the product, says Fernando Rey, sales head for SEDA Outspan Iberia S.L., Palencia, Spain. Retailers that communicate to the consumer that technology has made it possible to create a high-quality soluble coffee product will fare much better than those that don’t.

Add a little romance

When it comes to packaging, retailers would do well to add a bit of romance to their private label coffee, Johnson says. They could use the back of the bag, can or box to tell the consumer where the coffee beans are from, who farmed them and the positives associated with buying the product.

Billie Rice, vice president of sales for Little Chute, Wis.-based Trilliant Food & Nutrition LLC, agrees.

“Consumers want to have a story behind their coffee and tea,” she says. “Origin coffee is a great way to portray that.”

And retailers should keep in mind that quality coffee roasted to order requires a degassing valve, Burke says. A growing number of sophisticated coffee consumers look for this packaging element.

Additionally, for the “time-starved” consumer, the front panel of coffee packaging should be simple and concise, and should clearly articulate what is in the package, says Clay Dockery, division vice president, corporate brands, Massimo Zanetti Beverage, Portsmouth, Va. Colors used to differentiate between roast level, caffeine level and flavor could also help the consumer navigate the category.

Up the experience

When it comes to in-store promotions, failing to adequately promote private label coffee products is a lost opportunity, says Jerry Gilbert, vice president of retail sales for Mother Parkers Tea & Coffee, Mississauga, Ontario. Retailers that support their own brand at the same frequency as the national brands are the retailers that are winning in the marketplace.

Another way to entice trial is to engage the senses and add some theater to the shopping experience, says Tracy DeCarlo, category lead, coffee and tea, Daymon Worldwide, Stamford, Conn. For example, retailers could play up the wonderful aromas, the sound of coffee beans being ground and the variety of bean types offered; and, of course, to be most impactful, they could sample the coffee.

Yet another way to promote trial of store brand coffee is with promotions that offer shoppers a mix-and-match approach, says Susan Lambert, business development manager, Massimo Zanetti Beverage. A mix-and-match approach could help out the many shoppers who are looking to purchase coffee in multiple formats. For example, large cans, 12-count single-serve cups and premium bag coffees could be merchandised in this way because they often have similar price points. Additionally, for retailers that offer premium store brand coffee, a coffee-of-the-month program is a great way to feature a variety of items.

And since many retailers have some type of coffee shop or café located within their stores, they should use that to their advantage, Gamay says. The consumer is already standing in line waiting to order, so he advises retailers to use that space and time to merchandise store brand coffee and capture their attention.

Do consider offering teas with unusual physical and emotional health claims.

Don’t ignore the male demographic when it comes to tea.

Do consider offering multi-serve coffee concentrate bottles.

Don’t skimp on quality; consumers are looking for sophistication.