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Trends for specialty coffee in 1993.

While it seems to us in the trade that everybody must have already discovered specialty coffee, the fact is that most Americans don't drink the stuff. Growth is healthy however, and as more people come into the specialty coffee tent, our industry will continue to undergo some are a few of the developments that 1993 will probably bring.

According to Ted Lingle, executive director of the Specialty Coffee Association of America, "Two major trends in 1993 are already underway: the unprecedented proliferation of single unit retail roasters, and the expansion of the retail drink trade throughout the U.S. through the growth in numbers of coffeehouses, coffee carts, and coffee bars. We probably get 20 calls a day from people want to get into the business of selling coffee drinks. At this point the biggest limit on expansion is finding locations and finding out booked out as much as a year filling orders for people wanting to open single store locations." As a measure of growth, the SCAA increased its membership by 40 during the first 10 days of 1993. "We have had to revise our membership projections three times in the past five months," according to Lingle, "and the board directed me to hire another full time staff member to field calls from people wanting information on the SCAA." Lingle, who used to sell roasted coffee to foodservice outlets, concludes, "I wish restauranteurs were as eager to learn about quality coffee as the coffee and canned coffee, they now have to show why their coffee is better than the freshly roasted whole bean coffee for sale across the street. Inevitably some consumers will get confused and perhaps even intimidated or resentful enough to go back to the canned stuff or at least confine their coffee explorations to the whole bean bins in the grocery store. The advent of wine snobbery that came after American consumers first became aware of liner wines from California and Europe did no good for the wine trade Hopefully, the coffee trade will not have this problem.

Coffee consumers, as they come to believe in their increasing sophistication, will become increasingly demanding. They will expect sales staff in coffee bars and retail shops to be well-informed and proficient at their craft. They will expect every kid behind a coffee bar to know what restretto means and they will want their questions on roast, freshness, and bean origins to be answered without a lot of hemming and hawing. In other words, as the market exposes more consumers to specialty coffee, it will take more than whole coffee beans to induce a consumer to buy. Employee training will become a critical issue for retailers seeking to differentiate themselves from each other and their product from the inexpensive whole beans available in grocery stores.

Meanwhile, grocery stores will continue to introduce consumers to specialty coffee in addition to keeping the price of specialty coffee in a more narrow range than many coffee retailers would like. Flavors will continue to be a big part of this business, but we can also expect to see some additional "estate exclusives" weighing in from time to time. In addition, as wholesalers jobbing grocery stores won't have bright, articulate employees extolling the virtue of their coffees to the consumer, there will be fancier merchandising displays and endcaps festooned with marketing materials and glitzier packaging.

Coffee bars will be offering more specialized drinks as they attempt to make themselves memorable to consumers. Expect to see a lot more drinks named after the store, the owner, and the owner's cat.

Large chains will get exclusives on coffees or they will focus on proprietary blends. Single store retail roasters and small chains will take advantage of marketing materials offered by farmers who have, over the past several years, developed brochures, posters and point-of-sale materials for their coffees.

The blends developed by large chains will get more marketing attention and some may find their way into grocery and specialty food distribution. The "art of blending" will be discussed more in marketing materials by the large chains while small stores will focus on their "micro-roastery" status and their craftsmanship and artisanship. Look for a brochure entitled, "Zen and the Art of the Full City Roast," it is only a matter of time ! Estate coffees will become more popular and become, as noted above, the exclusive of a few stores or will be distributed through many small stores. Two kinds of "estate" coffees will co-exist: those which for reasons of quality or uniqueness are truly different and worth a premium, and those which are simply marked up because of their fancy marketing programs and are absolutely ordinary (at best) in every other respect (e.g. taste, flavor aroma). It remains to be seen if the public will be able to tell the difference.

Owners of coffee estates will, in general, become the marketing partners of the small roasters who cannot afford to develop on their own the necessary collateral materials that will allow them to compete with the larger chains. Conversely, the large chains will not be as interested in more expensive coffees that come with their own marketing materials as they will surmise that they can add the sizzle themselves and save money.

Even for the few farms who are able to sell their estate names to large roasters, this will likely be a marriage made in hell as the retailer and the farmer will constantly be at odds over how the premium for the coffee should be divided. Further, the farmer, selling all his coffee to one roaster will be less motivated to maintain pristine quality, the roaster, conversely, will be committed in terms of marketing material and merchandising to a coffee that is not necessarily what it should be delivery after delivery. The roaster could feel obligated to take coffees in that their quality standards might not ordinarily allow them to accept.

Small stores and chains, as they fight with the larger and more powerful competitors, will have to settle for lesser locations and become more focused on attracting larger ticket sales to make up for the lower number of sales a lesser location will allow. Thus, it is not unlikely that the smaller stores will end up selling more beans per store and have beans be a higher percentage of gross sales. This is contrary to the current thinking on the part of almost all operators that the way to riches is through drink sales.

The personality of the coffee retailer's store will become increasingly important to jaded consumers with a plethora of cappuccino suppliers. Certain stores will be seen as hip (and, to this writer's disgust) politically correct. Other stores will be stained with equally undeserved negative cachet and be viewed (even worse) as un-hip.

Reflections from Tim McCormack, vice president of Caravali Coffees of Seattle include a "solidification of the specialty coffee revolution combined with a virtual frenzy on the part of people wanting to get into the retail roasting business. In addition," according to McCormack, "consumers are getting increasingly demanding about their drinks, what they want in them and how they want them prepared. There is more awareness of coffee in general, but people are still making generalizations about qualities and origins that would not be made in a more mature marketplace like that of wine. Not many people would say, for instance, 'Oh yeah, French wines, they're hearty and robust and the best in the world.' Also, with all the people that are getting into the business I have to wonder how many people are really taking the time to understand the product and take care of it and show it the respect it deserves."
COPYRIGHT 1993 Lockwood Trade Journal Co., Inc.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Castle, Timothy
Publication:Tea & Coffee Trade Journal
Date:Jan 1, 1993
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