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Organic coffee: a trend or a new tradition?

The success of the specialty coffee market hinges on the ability of roasters to create new, enticing products for retailers and consumers.

The process of developing unique, exotic blends and bold, rich coffee flavors begins with close scrutiny of the ever-changing and increasingly sophisticated consumer taste preferences. At First Colony Coffee & Tea Company, it also involves taking a look at the world around us to identify current trends that could impact our business.

The emergence of the "environmentally conscious" decade of the 1990's brought with it a variety of new cultural trends. An emphasis on recycling, pollution reduction, and preserving our natural resources marked the country's new environmental movement. In addition, the popularity of organic foods soared. In the five-year period between 1986 and 1991, organic food sales grew by 400% and organic beverage sales grew by 1,450%. This new consumer loyalty solidified the organic coffee market.

First Colony's venture into organic was driven by an interest in organic coffee from nutritionists, environmentalists, organic marketers, and, most importantly, consumers. When we introduced our full line nationally in 1991, we were considered pioneers in what was then a very small, select market.

While the market still remains somewhat limited today, the category is certainly broadening. As consumers become more informed and environmental sensitivity grows stronger, we anticipate consumer preferences for organic foods also will increase.

At First Colony, our organic products currently account for almost 10% of our sales volume. This strong percentage is a testament to the enormous potential of organic coffee. Over the next two years, we expect continued growth in our organic sales which will be paralleled by further expansion of our organic product offerings.

Nationally, we anticipate that over the next two to three years, sales of all organic coffees will increase by as much as 70% over current levels. Indeed, organic coffee is a product with its own well-defined niche and great growth potential.

By definition, organic food is grown without the use of synthetic fertilizers, growth regulators, insecticides or herbicides. Touted as environmentally sound agriculture, proponents of organic farming say it is healthier for the environment, farmers, and end product consumers.

We position the First Colony organic product line as an environmentally conscious coffee alternative. As expected, the majority of our organic coffee drinkers do so for reasons tied to health, the environment, and taste.

But while consumer preference for organic is increasing, the market is not without problems. Most noteworthy among these surrounds the issue of organic authenticity. Currently, there is a lack of verifiable validity. Therefore, the issue of organic certification has become increasingly important.

Under the U.S. Department of Agriculture, the National Organic Standards Board is currently developing national standards for officially defining organic foods. In the interim, there are three independent U.S. certifying organizations, the Organic Growers and Buyers Association (OGBA), the Organic Crop Improvement Association (OCIA), and Demeter, that serve as organic industry "watchdogs."

In the case of certifying an organic coffee, the beans first must come from a certified farm. The crops must have been farmed without chemical additives and pesticides for a minimum of three years. Certifying organizations usually visit the farms once a year to ensure these conditions are being met. Certification can become a time-consuming, expensive venture. As a result, there currently are only a limited number of source countries from which to purchase certified organic coffee.

In addition to using certified green beans, a certified organic coffee must also be roasted in certified facilities. Here again, because certification must be received every year at a cost of almost $5,000 per year, the current number of U.S. certified roasting facilities is limited. Our roasting facilities in Norfolk, Virginia, and San Francisco are among only a handful of certified roasting facilities in the country.

We strongly believe, however, the issue of certification is key to consumer acceptance and continued growth of the organic coffee market. Certification ensures we are getting authentic organic beans from our suppliers. This, in turn, allows us to assure our customers they are getting an authentic product from us.

Without proper documentation of your product's authenticity, you could be making false claims about your organic product. That's why we would urge the small roaster who might be thinking about entering the organic market for the first time to consider the importance of certification. It is far easier to buy from already-certified suppliers than to try to create a paper trail of authenticity for yourself.

Our commitment to certified authenticity was paramount in the original development of our organic products. In fact, First Colony was among the first broad lines of certified organic coffees available to the specialty and gourmet trade on a national basis. Our beans and facilities are certified by OGBA.

One final word about certification: it is key to legitimizing quality standards for the entire organic coffee segment. We believe that over time, more and more organic coffees will become certified. This will lead to more uniform, high quality products and accelerated growth of the market.

First Colony certified organic coffee beans come from a variety of countries including Peru, Costa Rica, El Salvador, Mexico, Guatemala, Sumatra, and Kona (U.S.). (Although the number one selling non-organic coffee comes from Columbia, there are, as yet, no reliable certified sources in that country.) We purchase our beans directly from farms in some cases, but most often we purchase them from importers. These brokers provide us with all documentation that the product is certified organic.

From there, we roast the beans at our two certified facilities. We hold the same quality standards for our organic beans as we do non-organic - we select only those beans that will make a great cup of coffee. We also roast our organic beans in the same manner as our non-organic. Taste is not sacrificed in the organic roasting process. In fact, many people prefer the taste of organic over non-organic varieties.

First Colony entered the organic coffee market for two key reasons: one, in response to an emerging environmental trend, and two, because the category represented a great opportunity.

The success of our organic line has far exceeded our original expectations. Our products are distributed on a national basis in gourmet food stores, department stores, specialty stores, and some open trade. We also sell a large amount of organic to private label customers. While our organic distribution is national, we have particularly strong organic sales in the Northwest and Northeast regions.

We have received tremendous feedback from our customers and attribute much of our success to the breadth of our product line. Despite a limited number of countries from which to obtain certified organic beans, we currently offer more than 20 special organic blends, varietals from five countries and Swiss Water[TM] process decaffeinated organic coffees. Our most popular, bestselling product is our Rainforest Blend, followed closely by Coffee Kids Blend.

In addition, we offer more than 20 naturally flavored organic varieties, with names like Irish Creme, French Vanilla, and Double Dutch Chocolate. Although these cannot be certified organic in the truest sense, we use certified organic beans and natural flavorings to produce these delicious coffees. We support our organic line with ongoing trade advertising. This visibility has helped our distribution, which after only a year and a half, continues to grow.

Due to the success of our organic product line, we are able to purchase our beans in large volume quantities. This has enabled us to negotiate good prices, which translates into less add-on costs for our customers. In many cases, a small roaster purchasing a limited quantity of certified beans might pay the same for green coffee as he could buy it roasted from us. Our list prices are typically no more than 20-30% premium over comparable, non-organic coffees. This is something that has not only been attractive to our customers, but to final product consumers as well.

With more than 90 years in the coffee business, First Colony has a proven track record of successfully distinguishing new coffee traditions from a host of here-today-gone-tomorrow coffee trends. Right now, we believe organic will play an increasing role in the future success of our specialty coffee business. As certification grows and consumer preferences continue to lean towards organic, perhaps one day in the near future, all specialty coffees on the market will be certified organic.
COPYRIGHT 1993 Lockwood Trade Journal Co., Inc.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Feldmann, Michael V.
Publication:Tea & Coffee Trade Journal
Date:Apr 1, 1993
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