Extreme makeover: the coffee addition: how a three-unit, specialty coffee retailer took private labeling to the next level.

The Forza Coffee Company label was born from a combined passion for Italy, the love of coffee, and the pursuit of making a difference in the three units within our communities.

Forza, in Italian, signifies "strength". Our logo--a roman coin--has the phrase "Forza di Vita," or translated, "The strength of life." In Italy, the local espresso shops define their communities. Forza strives to establish itself as a partner in each of our communities, making each relationship a strong (Forza) one.

Brand Yourself Apart from Your Competition

In carefully researching private labeling, we've found that developing a private label allows the entrepreneur to go from the "Mom and Pop" or corporate bland look and feel, to a killer brand.

In today's mature specialty coffee market, it is advantageous to develop a sophisticated label to brand yourself apart from your competition. The private label is not just a bag of coffee beans with your company name on it, but encompasses all aspects of branding. The journey of private labeling, if done correctly, can be extremely rewarding as you begin to fulfill your dreams and vision--instead of living in someone else's destiny.

The rewards of private labeling? Financial freedom. The risks? Financial ruin. The solution to navigate this path, and substantially reduce your business risk, is to do diligent research, learn from those who have gone before, know your customer base, know your strengths, and partner well with those who can fill the gaps on your team to eliminate any weaknesses.

Utilizing Our Strengths, and Knowing to Lean on Others for Theirs

Our journey began as a licensed/franchised store. We were one of a dozen regional stores. While upscale and smart looking, our colors were a simple two-tone scheme. It had a nice, classic brand and exterior and interior design, though for us it wasn't unique. Our theme was easy to duplicate, the graphics and logos were not readily available, and our label did not jump out and go "WOW" at anyone.

When we decided to go independent we realized that our strengths lie in the designs of the stores, the development of personnel, training, and developing a culture of community inside our stores. My partner, Ray Jahn offered strengths on the financial side. His negotiations with vendors, products and materials has kept our cost of goods at an industry low, and driven our sales to increase between 16-22% a store.

We recognized our weakness and partnered with Dillanos Roasters, located in Sumner, Washington. They are known in the industry for their coffee quality and consistency, and its extensive private label brand development. Dillanos worked with us in crafting a signature roast that we are proud to call our own.

Dillanos' private label design team, which included a graphic artist and senior marketing professional, developed five potential private label names and uniquely different cafe brand personalities. We chose Forza, a great Italian-themed logo and concept, complete with new colors, faux painting, marble etching, and black and white thematic photographs to transform the walls.

The wooden sneeze guards around the espresso machines came down, and were replaced with a glass with our logo etched inside. New menus, signs and fun logos like "Ciao" went up, as the old ones came down. We held our breath as the first customers came in, and then one customer after another said, "WOW".

We used plastic loyalty cards before, and offered each customer the opportunity to exchange their "old card" for the "Forza Card". After the second day 1,400 Forza cards had been issued and exchanged for the old cards. Our customer base was on board with us, and now we went, "WOW".

Re-branding Success or Failure Depends on Your Staff

One of our first steps towards rebranding began with our staff. To be successful they had to be on board. Success or failure will depend on the staff. It sounds obvious, but too few owners include the staff for buy-in at key junctures of the brand change.

The staff greets the customer, interacts, forms a lasting relationship, and sells the owners' vision. Many of our baristas can name over 200 customers and their drinks. Many know their pet's names, the first concert the customer attended, and the health of everyone in their immediate families. These baristas are exceptional; several have competed at the national level and all are self-motivated, passionate about people, and extremely professional. We completed the new branding/labeling of Forza with their over-the-top enthusiasm and support.

Our baristas now wear a uniform: black pants with white collared shirts, and emblazoned on the back of the neck is the phrase "Forza di Vita". The uniform is complete with a black apron, with Forza Coffee Company written on the front.

To get them on board, we held a meeting during the early stages of changing our label with the staff. Only the managers knew of a change. We explained that we had chosen to change our own label, to make our own way and follow our dream. We outlined our plan and then borrowed the concept from The Bachelor reality TV show. We called each barista up, told them why they were valuable to us, and offered each of them a long stemmed rose; asking each barista to join us in our journey with Forza.

They all accepted, bought in on our vision, and have driven our label with their enthusiasm further than we could have ever hoped by ourselves.

Sometimes we forget, and believe we are in the coffee business. We are not. First and last, Forza is in the relationship business.

It takes vision and the desire to pursue a dream to choose to go private label. However, it takes a team to make it successful. Make sure you have the confidence in a proven design team, a quality and consistent roaster lined up, and the support of your staff.

RELATED ARTICLE: Are you ready to take the plunge into private labelling?

Whether it is specialty coffee, premium tea or widgets, you'd better do your research in private labeling before taking the first step. Why? Because it involves a sizable investment that can be a profit generator or a financial drain.

If it were only as simple as slapping on a label and selling products with your logo on them, everyone would be doing it--but they're not.

Establishing Your Brand

The brand of specialty coffee you have been serving has established brand equity with your customers. When you create your new brand, however, you'll be starting from scratch. Chances are that your advertising or marketing spin will be minimal to nil, so you'll be relying on the quality of the product and your image introduction to do the selling for you. Many existing and potential new customers may not recognize your new brand name, and could make the switch to a familiar established brand down the street from you.

Selecting your roaster partner is a critical step in making the change affordable. With select roasters staffed to help your private label, you can find that unique look and color scheme to make your one- to three-unit chain stand apart. A number of roasters have the expertise, having found what does and doesn't sell, as well as why. They are ready to help make your new identity a success. Keep in mind that they have a vested interest in your success.

All of those "small" elements can mean a lot to the bottom line. Disposable cups with your logo are only available from the major distributors in minimum quantities of 50,000 or 100,000. Do you have the cash flow to order that many? Do you have the storage space for that quantity? Can you work with your roaster on ordering and storing them, or gradually having them delivered with your coffee, as you need them? Can you afford new professional interior and exterior signage, decor and menu board changes?

Private Labeling Isn't New

Brand equity is what private labeling is all about. Private label brands have been part of the retail industry for decades. In Europe, on average, 45% of all products retail consultant John Stanley of John Stanley Associates.

Both markets are considered fairly mature with little room for growth, especially in Europe. For that reason, many of the global private label giants are expanding to capitalize on less-saturated markets. A recent ACNeilsen report shows that the largest growth among the new markets are in Latin and Central America.

Traditionally, private label products have been strong in low-emotional involvement goods, such as butter, eggs, flour and sugar. These staple ingredients are part of larger recipes. The individual performance becomes unidentifiable in the finished product. In Europe, these prices can be 10-18% cheaper. The number jumps considerably, up to 25% less than the brand leader, on average, in the U.S.

As the private label market matures, more diverse products and services come on line. Specialty coffee was a logical, private label product to come to the market. Like other upscale products, the price equals or exceeds those of the established brands.

Consistency, Consistency, Consistency

The tricky part of private labeling is to keep close control over credibility. The product must perform in the same way as the branded products that consumers currently know. Once you've tarnished your overall image with inconsistent quality, it is that much harder to build back your customer base. Consistent performance is a vital part of private label success. Consistency in product flavor, consistency in quality, consistency in packaging.

For specialty coffee retailers, initial questions to seriously address include:

--Can you maintain consistency in flavor?

--Will the product always be fresh?

--Will you only sell your coffee beans in your units, or other locations as well?

--Will your coffee supplier provide the product in a timely fashion?

--Will the effort be profitable for you?

--Does your roaster provide private label branding development as a value-added service?

Private label specialty coffee can be an excellent balance to your coffee shop's brand equity, if you carefully do

Brad Carpenter, along with partner Ray Jahn, currently own three Forza Coffee Company shops in the Tacoma, Washington area. While both Brad and Ray were in the law enforcement industry when they started three years ago, Brad now dedicates all of his time to their specialty coffee business. Brad has been called upon to speak on private label/branding both locally and nationally.