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Value added gets serious: coffee producer takes message on the road.

The rumblings in mid-October that the coffee market has finally turned around and that we are now in the midst of a bullish upswing only highlights the low expectations that the industry has set its sights on over the past few years; a bullish upswing into the 60 [cents] bracket, indeed.

Perhaps more significant than the technical readjustment we are currently undergoing is the change in priorities that all commodity-related businesses are contemplating. In the past, traders--be they in wheat, cocoa or coffee--have more often than not been arbitrators between poorly linked and often inefficient markets.

The usefulness of offices staffed with crop analysts and meteorologists in distant lands becomes less apparent as independent news organizations send out the same information on an equally timely basis as the private outposts; expenses can come down using these services and the competitiveness of organizations with private and formerly useful resources suffers even more.

As the market becomes more efficient and better posted it becomes, almost by definition, impossible to make a profit. Enter value added -- an old term applied to anything that might give someone an edge in a market that is otherwise increasingly and uncomfortably becoming more of an even field everyday. (All that needs to happen now is a government crackdown on market manipulation, the last outpost of the profitable trader in these tough times.)

Training program launched

Fazenda Vista Alegre (FVA), producers of the patented Natural Dry [TM] process coffee has launched a training program for roaster/retailers and wholesalers throughout the country. The program will involve both new and existing accounts for the first few months and then be offered to the trade at large beginning in January of 1993.

Recognizing that roaster/retailers, particularly those new to the business, are constantly searching for information on coffee and ways of keeping their staff members well informed, prompted FVA to initiate this new program. The sessions will focus on green coffee production, the roasting process, cupping and blending. The specific presentation may be tailored to the needs of the participating retailers. They may be presented to groups of retailers on a by-invitation basis or at individual locations by appointment.

This is not the first attempt by a specialty coffee producer to embark upon an educational program. The producers of Yauco Selecto, a premium coffee from Puerto Rico, recently conducted some brief training sessions in the New York area. The purpose of these programs is to first educate retail salespeople on coffee production in general and then to focus on the merits of a premium specialty coffee.

While all specialty coffees sell at prices significantly more than those of typical canned coffees, premium coffees--such as Yauco Selecto and FVA Natural Dry [TM]--are priced even higher still. These coffees do not have the recognizability and cachet of Kona or Jamaican Blue Mountain, however; so unless consumers either taste the coffee and perceive a significant and positive difference or they find other reasons for paying a premium, they are unlikely to stray from the usual favorites.

In Yauco Selecto's case, for instance, people are often less concerned with the price when they realize that the farm in Puerto Rico must pay according to the U.S. minimum wage and faces the other costs and restrictions of being a U.S. employer, even though these circumstances add nothing to the value of the coffee itself. This is not to say that the producers of Yauco Selecto feel that higher production expenses justify the coffee's high price, only that the marketing is more involved than it might be for a coffee that sells more easily at a lower price.

Getting a complex marketing message across in the whole bean specialty coffee market is not all that easy however; adding value involves more than simply increasing the price. First of all, in the world of green coffee buyers and sellers the message is usually short. A quick cupping and a price quote are usually all the information exchange that needs to occur before a transaction is concluded.

When the price does stands out there's a whole lot more explaining to do and green coffee buyers are often not inclined to listen. Likewise, sellers are often uncomfortable taking time away from potentially larger sales of cheaper coffees to spend their time flogging a few boutique coffees.

Further, even if the buyer takes on a bag of a premium green coffee it does not mean that the coffee will sell. Typically the bag of premium coffee is left to fend for itself amongst all the other coffees being offered by the retailer. Given that most of the other coffees are more familiar to the consumer and less expensive, it is not difficult to predict how fast the new, unusual premium coffee will sell.

With many of the coffees a sample tasting is enough to convince the consumer that the coffee is worth the premium asked. If the coffee has an unusual taste or is exceptionally pricey, however, a taste may not be enough. Finally, even if the consumer likes the coffee a sale may not occur if the salesclerk doesn't know anything about the coffee, or does not seem personally sold on the product.

Dedicating staff to marketing and training has become an increasingly typical solution to the problems outlined above. These trainings are utilized both as sales pitches if it is the initial presentation and as follow-up seminars if they are repeated designed to help retail sales staff members learn about the coffee, taste it and hopefully develop a positive attitude toward the coffee.

"We feel that we have an excellent coffee with a unique and delightful taste," notes Atilio Cardinali, marketing director for Fazenda Vista Alegre, "But without the sales staff's ability to help consumers understand why this coffee is so unique the message does not always get across. People first have to taste the coffee but they also have to understand that it is O.K. to like it. We also feel that the coffee is easier to appreciate once it is understood why it tastes so different. Our new training program is designed to address these concerns and help our customers sell more of our coffee."

The benefit many retailers are finding, according to Cardinali, is not entirely expected, "What we have learned is that once a store's sales staff gets enthusiastic about one coffee they become more actively involved in selling all the coffees. As a result of the training program we are seeing increases at our customers' stores across the entire whole bean line-up. Also, many retailers have adopted a regular series of seminars for their sales staff based on the initial success of our limited trial."

Just as the business of retailing coffee is changing so too, it seems, is the business of the green coffee dealer.
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Title Annotation:Fazenda Vista Alegre offer training program in selling higher-priced gourmet coffees in difficult market conditions by emphasizing the coffee's value added attributes
Publication:Tea & Coffee Trade Journal
Date:Nov 1, 1992
Previous Article:The bank oriented roaster environment: part 1.
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