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Specialty coffee moves from strength to strength.

All great American adventures begin with pioneers walking a treacherous and exciting path. The success of their endeavoers impresses upon others an interest to follow. Some of the pilgrims are new initiates. Others are converts from kindred businesses. Still others are simply following Sutton's Law. * There is always a field of enterprise open to the American adventurer whether it be in the last century or the last decade.

In 1970, there were so few specialty coffee businesses in the United States that you could count them on your fingers and toes. By 1990, the Specialty Coffee Association of America (SCAA) alone boasted nearing 400 members. The Winter Coffee Drinking Study 1990 (The last to be sponsored by the Promotion Fund of the International Coffee Organization) reported that just over 3% of shoppers who purchased coffee for at-home consumption purchased those beans at a specialty coffee store.

Among the uncounted in the Winter Coffee Drinking Study are the thousands and thousands who buy their beans at a specialty food retailer or one of the other outlets who purvey specialty coffee today. It also leaves out the significant number of shoppers who are buying Arabica specialty type coffees in supermarkets settings. Uncalculated is the fact that folks who buy specialty coffee drink it more frequently than those who drink commercial brands, and they brew it with a higher concentration of coffee to water ratio than do commercial coffee drinkers. Also not calculated is the matter of price per pound. Specialty coffee consumers spend significantly more for each pound of product than do commercial brand purchasers. Start extrapolating numbers and its easy to see why some specialty coffee pundits are saying that specialty coffee represents between 8-12% of all coffee purchase dollars in the home-use market.

On July 8, 1991 at the regional membership meeting of SCCA held in New York, executive director Ted Lingle spoke of 50% of market for specialty coffee by the end of the decade. That is another 400-500% growth in share in eight years. And the strange thing is that no one in the room gasped except me. There is more concern in the community as to where we would get that volume of good coffee to sell than there is concern about whether specialties has the momentum to reach such a lofty goal.

The successful education of the American public to better tasting Arabica products is evidenced in the type of coffee makers they are using at home. The automatic electric drip coffee maker is now used in 45% of U.S. households. From a pre-eminent position in the old coffee industry's heyday of 1960, the pump percolator is represented in only 4% of households. There is little doubt that better brewing practices contribute to the sale of better beans. And everyone now knows, and some even advertise: better beans make better coffee.

The browning of America continues with more roasters, more retailers, more direct-mail outlets and more specialty coffee type products available every year. This is wonderful news, and news that all of us in the American coffee business can be proud of. We must remember though that these strides have come at a price. What was originally an intellectual and philosophical exercise for the pure of heart and stout of mind has transcended the pioneer stage and is rapidly maturing as part and parcel of the main stream U.S. coffee community. For this reason, it sometimes behooves us to remember our roots.

The earliest participants in the specialty field were fellows who were already there but didn't know it, such as M.E. Swing in Washington D.C., Graffeo's in San Francisco, and Simpson & Vail in New York. Others as Pete's and Starbuck's were born of the philosophy of specialty coffee by new coffee retailers who, for whatever intellectual, spiritual, and monetary reasons, stopped making an honest living doing other things and turned their energies and their lives toward good coffee.

The entry level costs of setting up as a roaster were high compared to return. Brazil's Black Frost of 1975 changed the economics of the industry. Still, many sought to purchase fresh roasted beans from others. Within a short time roaster/wholesalers began to appear. Among the early wholesalers were James Finley & Co., New Jersey; Northwestern Coffee Mills, Wisconsin; Schapira, New York; Capricorn, California; Stewart Bros. Coffee (now SBC), and Starbucks (blue Anchor), both in Washington. Some of these were born as retailers, others began life as wholesale sources.

By the mid--70's, specialty roasters on the West Coast, including United Coffee, Coffee Bean International, Gavina, and Peerless, were strong regional competitors. In the East and Central regions, there was an early entry of institutional roasters who saw specialty's marketing potential: White Coffee in New York, James G. Gill/First Colony of Norfolk, Virginia and Superior Tea & Coffee Co., now Superior Coffee & Foods, a division of Sara Lee, Chicago, Illinois made early commitments to specialty coffee by expansion into whole bean product lines and marketing strategies.

The activities of the regional institutional roasters went a long way toward bringing specialty coffee to the mass market. The advertising clout of these strong players were rewarded with editorial support for specialty coffee among the gourmet food trade periodicals. Gourmet Retailers, and its publisher Ed Loeb has been actively supporting specialty coffee since its earliest days. Regular attendance by institutional specialty players at trade shows such as those sponsored by National Association for the Specialty Food Trade (NASFT) brought specialty coffee to the attention of the widest possible retailer audience.

The activity of the many regional roasters who joined the early entrants and the growing number of roasting retailers and others selling beans has successfully created a national distribution of better coffee where there had not even been product awareness on the part of the consumer only a short number of years earlier. In effect, specialty coffee represents a coffee enterprise that is a many-headed competitor of substantial strength. Philip Morris (Maxwell House, Sanka, Brim); Proctor & Gamble (Folgers, Maryland Club); and Nestle (Hills, Chase Sanborn, MJB) have taken due notice.

* Gangster William (Willy) Sutton, when asked why he robbed banks replied, "Because that's where they keep the money."
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Title Annotation:Specialty Coffee Association reports growing market
Author:Schoenholt, Donald
Publication:Tea & Coffee Trade Journal
Date:Oct 1, 1991
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