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Private labeling: company size is not an issue.

Gourmet coffee means growth - growth in consumption, growth in retail sales, growth in pounds roasted and sold. Coffee, especially gourmet coffee, is living up to its name of "Brown Gold" by increasing the revenues of any establishment selling it either by the cup, pound, or lot.

What about smaller companies that want to sell proprietary blends or roasts of coffee but do not want to incur the cost of labor and equipment to roast and blend their own? They are perfect candidates for private label and moving into it is easier that many people think.

"Company size and poundage minimums are no constraint to private labeling," according to Michael P. Caruso, president of Berardi's Fresh Roast, Inc. in N. Royalton, Ohio. "Anyone can have their coffees private labeled. If they are willing to invest money in packaging, they can get into it."

According to Caruso, packaging materials for private labeling run the gamut from film to paper, the resources of the customer is the determining factor. Many of his customers receive their special blends in large bulk bags, stock the beans in bins, and package the coffee in tin tie paper bags with self applied labels. This is, of course, the entry level approach to private label. He also has customers that, have purchased film stock and he roasts for them once or twice a month. Caruso loads their film on a machine that forms the package and fills it with their custom blend of coffee beans. The finished product is packaged in their private label film stock.

"All size retailers are looking at private label from one store retail and cafe operations to multi-store units. People want products recognized as coming from their own store, not products that can be purchased anywhere," continues Caruso. This is especially true for house blends and special flavor blends. To illustrate, Caruso volunteered that Vanilla Nut and Irish Creme can be combined to make an original Nutty Irishman flavor or the combination can be called anything the store owner wants to call it.

Caruso sees a continued growth trend in private labeling for smaller retailers, especially unique espresso blends, and credits the increased number of espresso carts for this growth. "We sell three espresso blends under our own name and eight private label espresso blends. The packaging for these blends ranges from a one color bag with a label applied with the company name to the more complex four color valve bags."

He also sees an advantage to being a regional roaster. "Some roasters, especially the larger ones, can't be bothered with five pound amounts for customers. This is not true with my company. We are especially known for two things, the freshness and quality of our products, and our sensitivity to small retailers." No account is too small to help.

Another company that specializes in small lot private labeling is Emerson's Coffee and Tea in Asheville, North Carolina. Owner/operators are the husband and wife team of John and Helen Emerson, vice president and president, respectively.

Although their retail/roasting facility has only been in operation for about two years, they "researched the coffee market, joined the Specialty Coffee Association, and traveled extensively before ever opening our doors," according to John.

The Emerson's see a continued growth in private labeling for the smaller retailer because they are "looking for something different. Large specialty coffee suppliers have their brand everywhere. Smaller roast companies, because they can give more personalized service, develop a customer base and retain customer loyalty."

This personalized service starts when a customer walks in the door and says that they want to develop their own blend of coffee for private label. The first three things we discuss is flavor profile, roast color, and price point. With this information, we develop four to five different samples for the customer to taste, and we keep developing samples until they are satisfied" according to John. He keeps an inventory of 20 different varietals on hand at all times and already has 120 different flavored coffee blends. Some of the more unique ones that they have developed are Mountain Mystique, Mississippi Mud Pie, Very Cherry Chocolate, and Banana Split. "We can usually satisfy a customer's taste preference with the inventory of beans that we have on hand by varying proportions and roast colors. Because we do not require a special inventory to private label, we do not require a contract or minimum poundage."

John agrees that private label espresso blends is a growth area and this growth is just beginning. "The growth of espresso out west has definitely influenced the growth of it in our area. More and more customers are asking for private label espresso blends."

Although requests for espresso blends is increasing, the bulk of his private label work is in custom flavor blends and non-flavored house blends. "Retail customers who sell whole bean coffee to end users especially want unique flavor blends. Restaurants are more interested in unflavored private label blends," according to John.

Even though the Emerson's roast and sell their products in their retail store, they do not see themselves as competition for their private label customers. Because these customers can come up with their own blends under their own label, they feel that everyone benefits.

A new participant in private label roasting is America's oldest coffee merchant, Gillies Coffee Company, located in Brooklyn, New York. Donald Schoenholt is president and roastmaster of Gillies. His family has been in the coffee business so long, he can't ever remember they're not being in it. "Our family began Gillies in 1840 and it has been in continuous operation since then. I learned how to roast coffee at my father's knee. My father learned from his father, who learned from his father."

Gillies is an all Arabica coffee roaster and only became interested in doing private label roasting after moving into a new facility in Brooklyn. "We are in the process of building a 14,000 sq. ft. facility designed especially for specialty work. Private labeling is new for us. The new facility, with its extra capacity, will allow us to do work for others," according to Schoenholt.

Gillies currently roasts and packs whole bean coffees in 25 lb. lined burlap bags, or 5 lb. valve bags - packed three 5 lb. bags to a case - and either of these sizes can be private labeled. Although they do not currently package any consumer size bags whole bean, they are contemplating this size for the future.

As part of their regular whole bean inventory, Gillies carries 50 flavor compounds and over 24 varietals. They currently manufacture five house blends of their own design, have two complete decaffeinated lines [CO.sub.2] and Swiss Water Process), and four different espresso colors, Bay City[TM], Vienna (dark), French (darker), and Italian (darkest). Gillies also has a full line of certified organic coffees in regular, dark, and flavored. When you combine their available products, they have over 100 items that they consecutively stock in whole bean coffees.

In addition to whole bean coffees, Gillies has an array of roasted and ground coffee in fractional packages ranging in size from 2.25 oz. to 3.0 oz. to 1.0 lb. packages and any of these package sizes can be packed in custom film or plain film, depending on the customers preference. The array of fractional packages include 100% Colombian, Mocha Java, and Legendary[TM] which are all a traditional roast color and DNS Reserve[TM] which is a blend of Traditional and Vienna roasts.

Donald refers to the vast array of whole bean, roasted, and ground coffees normally manufactured in Gillies as "custom grade" and a 100 lb. minimum is required for private labeling. If a customer wants coffee private labeled and what they want is not something that Gillies normally manufactures, Schoenholt considers the request "custom made" and 500 lbs., or a full roast, is required and the product is tailored exclusively to the customers' needs.

Although he gladly does custom work, Schoenholt stresses that Gillies will only do quality private label. "When we discuss the customers needs, we'll talk about flavor profile and packaging. When those needs are satisfied, then we will discuss price. If the price is more important than quality, I'll recommend that they work with another roaster." Perhaps this devotion to quality is one reason Gillies has been in business so long.

If a retailer wants to private label, size is truly not a constraint. If financial resources are limited, buying film stock may not realistic. Step one may be working with a roaster to find fresh, high quality coffees that fit within the taste profile that you want. Step two may be sacking the coffees in high quality generic coffee bags with an attractive and colorful label applied to the bag. Custom printed film stock may not be for your operation until step four or five. The most important thing to keep in mind is that the coffee has to be fresh and of a quality that will keep your customer base loyal and coming back for more. Price is not as much of an issue in privately labeled coffees as taste - if your coffee tastes good and your blend is proprietary, customers will come.
COPYRIGHT 1993 Lockwood Trade Journal Co., Inc.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Grounds for Discussion
Author:Sturdivant, Shea
Publication:Tea & Coffee Trade Journal
Article Type:Column
Date:Apr 1, 1993
Previous Article:Aroma cognition.
Next Article:Shhhhh - be very, very quiet: a report on private label coffee in the specialty market.

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