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What's happening in flavored coffees (roaster, retailer, iced profile).

What's happening in flavored coffees (Roaster, retailer, iced profile)

Barrie House Coffee has two divisions. The gourmet division sells directly to gourmet shops in the U.S., Japan and Korea and soon will be selling to England. According to the company, flavored coffees are gaining popularity in Japan and Korea as well as in the U.S. The second division is Office Coffee Services, which sells to companies who sell to offices, conveniences stores and restaurants.

According to Dan Kopf, executive vice president, flavor coffee sales are holding at about 30%. "What is changing are the flavors and new markets for flavored coffees." Amaretta is popular as well as Chocolate Raspberry, which has been increasing in popularity over the last 6-9 months. New and growing markets for flavored coffees are office coffee service and restaurants.

In the area of office coffee service, the company has taken four of the most popular flavors and packaged them for OCS. These fractional packages include Swiss Mocha Almond, Chocolate Raspberry Cream, Hazelnut and Toasted Almond. There has been a good response to these fractional packages.

Over the last year, the company has made all flavors kosher and parve. "The kosher segment of the market is larger than you think," Kopf said. "Not everyone who buys kosher products is actually kosher. The kosher sign for many people is a symbol for purity and cleanliness." (Parve means that the product can be consumed with meat and dairy products.) "White tablecloth-restaurants are getting into flavored coffees," Kopf said. "It may cost a restaurant $.01 cent more per cup and they can charge from 25-50 cents more per cup," he said.

Dallis Bros. has been in the coffee business for 78 years and directs its marketing efforts to gourmet stores, in-store roasting, restaurants and espresso bars with 52 varieties of whole coffee beans and over 30 green coffee beans. The company emphasis is on quality and family tradition and is still owned and operated by family members.

Dallis Bros. has about 20 flavored coffees, both in regular and in Swiss water decaffeinated beans. All flavored coffees available to wholesalers are in whole bean form.

"We do a lot of pounds and a lot of different flavors," says Martha Bear Dallis. Flavors range from the established popular Amaretto Hazelnut and French Vanilla flavors to the more unusual Strawberry, Eggnog and Maple Walnut. The company has six chocolate flavors including Dutch Chocolate, Chocolate Almond, Chocolate Cherry, Chocolate Fudge, Chocolate Mint and Chocolate Raspberry. Liqueur flavors include Kahlua, Jamaican Rum, Sambuca, French Brandy and Amaretto.

"We are starting to see a trend in restaurant service of brewed flavored coffees. Many are now brewing three pots of coffee, one regular, one decaffeinated and one flavored," Dallis said.

"In our retail store adjacent to the factory, we have two coffee roasters, and we do in-store coffee roasting of flavored as well as other blended coffees. We see that people who are getting into gourmet coffees will often start with flavored coffees. Choosing a coffee doesn't seem so frightening then. They taste great especially with half and half, which adheres to flavor oils so that you get a very smooth taste. Then, as their palates become more sophisticated, they will venture into new areas. It is a way to introduce a newer, younger coffee drinker into coffee, using flavored coffee. The older generation of coffee drinker who has been drinking coffee for a long time is more likely to want straight coffee," she said.

"It comes down to personal preferences. In our store, we do six different coffee blends each day: house, decaf, flavor, light body, medium body and a full body. Some customers flip over flavored coffees. Others prefer a non-flavored bean. About 17% of store sales are in flavored beans. Flavored coffee sales go up around the holidays to about 20% when it is purchased for gifts. Gender seems to influence the choice. Women prefer flavored coffees more than men. Women treat flavored coffees as deserts," she said.

Fairwinds Gourmet Coffee Co. * Bow, NH

"My view of flavored coffee," said Fairwinds marketing manager Peter Donovan, "was an explosive growth in the 80's. At first people were entranced with the idea and taste of flavors. The growth continued through the 80's as more and more people became aware that it existed. I feel that that extreme growth may be tapering off some, but that flavored coffee will continue to grow into the 90's," he said. "I think of it as Phase I where there is a great deal of experimentation contributing to high growth. In Phase II, there is still trial and experimentation, but many consumers have found coffees they like in the specialty coffee area."

"Flavored coffee drinkers may not represent the mainstream. They are more a segment of new consumers to the coffee category. They have become coffee consumers because the specialty coffee industry has found a way to serve a group that was not being reached. By delivering on the promise of a flavor like Chocolate Raspberry, the coffee industry is tapping into a latent demand for an item that the consumer hadn't experienced."

Donavan feels that flavored coffees have now grown to become a significant piece of the business in both regular and decaf products. "Decaffeinated flavored coffees are another consideration. Before we only had Sanka and regular. Decaffeinated coffee lines have also expanded. Now there is a broader and more sophisticated mix of regular and decaffeinated flavored coffee for product niche development."

In terms of taste preferences, Donavan finds that flavor preferences vary from region to region. In the Southeast, Amaretto and Southern Pecan are popular flavors.

According to Donovan, restaurant coffee service is a few years behind retail trends. "The only thing in the way of flavored coffee service in restaurants are the logistics. Restaurants are just beginning to offer a brewed decaf. Flavored coffees will gain more acceptance and grow in the 90's. There are a few who currently offer flavored coffees," he said

Donovan feels that there is currently not a lot of flavored coffee in office coffee service. One of the reasons, he feels, is that it is difficult to get a large group to agree on a flavor. The company does sell a variety pack and has its own office coffee service.

First Colony Coffee & Tea Co. * Norfolk, VA

James G. Gill was a regional coffee company established in 1902 providing a mass market-type coffee. When the company's president decided 15 years ago that business was in the specialty coffee area, he established First Colony to serve that market. First Colony is now the parent company. Forty percent of its business is in private label.

First Colony has introduced a new line of dark roast coffees, more that half of which are flavored. The dark roast line comes in three different degrees of dark roast, Full City, French and Espresso. The complete dark roast line consists of 24 items, 15 of which are flavored.

According to Michael Feldman, vice president-sales, initially the lighter Full City has done better than the others. The line has been introduced nationally. Although part of the reason the line was marketed was in response to West Coast interest in dark roasted coffees, there is more response to the products from the East coast. The line is currently available in Macys and Bloomingdales. The company will be doing a private label line for Neiman Marcus, most of which will be flavored.

Flavored coffees are very big in the retail stores. "I've been told that flavored coffees account for up to 50% of coffee sales for such major coffee retailers as Barney's and Gloria Jeans," said Feldman.

First Colony recently started doing major business in the foodservice area. The company is packaging assorted flavored coffee fractional packs. "We started to see a trend in institutions that wanted better coffee and greater variety."

When asked about popularity of flavors, Feldman said that Vanilla Nut and Hazelnut are currently the most popular flavors. "Vanilla works better with coffee than other flavors. We find that chocolate doesn't work as well because chocolate and coffee share some of the same chemical properties so that the chocolate flavor doesn't come across as strongly."

Gilles Coffee * New York, NY

Flavored coffees is not new to us, says Donald Schoenfeld of Gilles Coffee. The company has been making flavored coffees since the late 60's to early 70's. Gilles currently has 40 different flavored coffees in light roast, dark roast, decaffeinated and Swiss water decaffeinated. Two top selling flavors are Vanilla Hazelnut and Chocolate Almond. Sales of flavored coffees have peaked at 20% for the last two years. The company does not do flavored coffees for food service.

Schoenfeld spoke about flavored coffee issues that need be considered by the specialty coffee industry. Flavored coffees are made in many restaurants by adding liquid or instant powdered flavor to a cup of coffee after it's brewed. Many restaurants have pumps of liquid flavoring. This method is considered to be easier by many restauranteurs. A restauranteur need only inventory the one coffee when a packet or pump method of adding flavor to coffee is used.

Flavor contamination is an important concern when dealing with flavored coffees. A good deal of thought must go into how to design a flavoring process area to protect against contamination. Beans can pick up odors and flavors of coffees around or in contact with them. Even if you store a sack of beans next to a sack of flavored beans, aromas can be absorbed. Flavors often come in a base for suspending the flavor. Beans are coated with the slightly oily liquid and then go through packaging machines or flow bins before they are bagged. Then when the next coffee is processed, it can pick up the flavor of the previous coffee.

"As home consumers become more sophisticated, they will do some of their own flavoring at home. It can be as simple as adding a crushed cinnamon stick, liqueurs or fruits. The biggest flavor of coffee is coffee. Coffee is a strong and popular flavor itself."

Green Mountain Coffee Roasters * Waterbury, VT

Green Mountain Coffee markets 1.3 million pounds of coffee per year to the metro New York and New England region. It sells 45 coffees, eight of which are flavored. They include Amaretto, French Vanilla, Hazelnut, Irish Creme, Swiss Chocolate Almond, Viennese Cinnamon, Chocolate Raspberry and Rainforest Nut. Rainforest Nut is a proprietary trademarked coffee blend. All flavors are also sold decaffeinated.

The company also markets Swiss Water Process Decaffeinated coffees in Swiss Chocolate Almond, Chocolate Raspberry Decaf, French Vanilla and Hazelnut.

Green Mountain's Dan Cox feels that coffee should be flavored to enhance it, not to disguise it. You should be able to smell and taste the flavor, but still be able to taste the coffee. Some companies create flavors that are not compatible with coffee. It is up to a roastmaster to make the proper flavor selections. "Two years ago Peaches and Cream was a hot flavor. Swiss Chocolate Almond was new last year; now it is a staple."

As of June 1st, the company has marketed four flavored coffees in a new 10-12 cup fractional packages for office service and restaurants. Fracs, as they are called within the company, are available in Swiss Chocolate Almond and Hazelnut, in regular and decaffeinated.

The company has become extensively involved with environmental issues and contributes 10% of the profits of its Rainforest Nut proprietary blend to support Rain Forest Alliance and Conservation International. The company is also represented on the Board of Coffee Kids.

Schapira's Coffee * Pine Plains, NY

Schapira's Coffee is a coffee roaster who took another approach to the flavored coffee business. They developed "Flavors for Coffee", a dry flavored product that is added to the brew basket when regular coffee is being brewed.

"Flavors for Coffee" is sold in #3 bulk bags and in 2 oz. consumer packages predominantly to gourmet stores, coffee shops and to some restaurants.

There are 15 flavors available in #3 bulk bags. Five of those are available in 2 oz. packages. The five flavors include Almond Rapture, Chocolate Almond, Chocolate Mint, Cinnamon, Fantasia (Chocolate, Cinnamon & Orange). The remaining 10 flavors are Amaretto, Cafe Brulot, Chocolate, Chocolate Cherry, Chocolate Cognac, Chocolate Orange, Chocolate Rum, Florentine (Chocolate Almond & Chocolate Orange), Irish Creme (Chocolate Cognac, Chocolate Cherry & Coconut) and Lemon. The company also actively private labels the product.

Flavoring products are all natural ingredients that allow people to make flavored coffee when they want it. They need only put 1/2 teaspoon in the brew basket to make the flavored coffee of their choice.

Schapira's has been a specialty coffee roaster for over 18 years.

Superior Coffee & Tea * Bensenville, IL

According to recent promotional literature from Superior, "Flavored coffees are now the biggest category in the specialty coffee market!" Superior Coffee and Foods has been a coffee roaster for over 80 years and was one of the first to become part of the flavored coffee effort. The company is informally known as "The Flavored Coffee People".

Flavored coffees are marketed in the company's specialty gourmet division. Specialty coffees are available in 65 varieties, all Arabica beans, sold in bulk, 12 and 4 oz. packages, whole bean or ground. Forty percent (40%) of the specialty coffees sold are flavored coffees available under the Emerald Cream and Cafe Angelica labels.

The company currently markets 21 flavored coffees and features five new flavors including Apricot Cordial, Cappuccino Italiano, Chocolate Cherry Kiss, Fiesta Creme, and Vanilla Almond Royale sold in #5 and 12 oz. valve bags. Superior also has Swiss Water Process decaffeinated coffees in 10 flavors including Almond Amaretto, Cafe Angelica, Dutch Chocolate, Dutch Chocolate Almondine, Dutch Chocolate Mint, Emerald Cream, Georgia Pecan, Raspberry Almond, Vanilla Colada and Vanilla Creme.

In addition, Superior does a large gift business in flavored coffees, which are available all year but sell best at the holiday season. Retailers are offered two gift programs. They may buy a case of 4 oz. gift packages of coffee in flavored or blended and make their own gift boxes. Three different cases are available, two of which are flavored while the other case is blended coffee. Each case of flavored coffee contains 24, 4 oz. bags of ground coffee, six packages of four different flavors. The flavors chosen for gift boxes are the best selling whole bean flavors.

In addition, Superior offers its own gift boxes, three of which are flavored and one which is blended coffee. Each contains four, 4 oz. packages of four different flavored coffees. Both programs have been very successful.

Another successful Superior flavored coffee program is to the convenience stores. The company does various customized promotions to this market, both for coffee service and for the sale of flavored coffees.

Superior indicates a commitment to flavored coffee through its broad selection, advertising and promotional materials and special programs featuring flavored coffee. Word from Superior is a belief in the continued growth in the sales of flavored coffee marketing it in a variety of new ways.

River Road Coffee * Massena, NY

River Road is a full-line specialty coffee roaster with its own brand name, as well as extensive private label business in regular and flavored coffees in packaging ranging from 2 oz. fractional packages to 5 lb. whole bean valve bags.

"Flavors comprise the most explosive segment of today's specialty coffee business and biggest growth in my business," says David Copeland, president of River Road Coffee. "I do more non-flavored than flavored business, but the flavored is growing more. Flavored coffees used to be 40% of my business, now they are 50%."

"Statistics show that the top seven flavors account for 70% of the total flavored coffee sales in the U.S. and Canada, mainly Hazelnut, Chocolate and Amaretto. Specifically they are: 1. Vanilla Nut (Hazelnut & Cream); 2. Irish Creme; 3. Chocolate all types; 4. Vanilla all types; 5. Macademia Nuts all types; 6. Amarettos all types; 7. Chocolate Almond; 8. Coconut; 9. Cinnamon; 10. Chocolate Raspberry & Cream. Some flavor companies offer between 75 and 90 different flavors but there are only a few in great demand," Copeland said.

According to Copeland, the coffee business is losing tremendous ground to the soft drink business. Even seltzers are now flavored, he said. By making flavored coffees available to younger people you are creating coffee drinkers. The soft drink industry has been taking from the coffee industry every year. It's because of our refusal to innovate. "If someone can make 10 different flavored seltzers and be successful at it, why shouldn't the coffee industry make flavored coffees," Copeland said.

"The purists may complain about flavored coffees. But they are here to stay. They have brought tremendous recognition to the specialty coffee industry. In this country, the average person can enjoy a Hazelnut coffee which has a greater appeal than a fine Sumatra or Kenya coffee because most people don't have the palate to discern the difference in great coffee," he said.

"I'm not saying all flavored coffees are palatable. But when a product is done properly it is good, and that will be reflected in its sales."

River Road was one of the first to put flavored coffee into fractional packages in any volume for the restaurant business. These flavors are now available in national food service chains. The flavors are already in big office coffee services, and the company plans a large roll-out this year. "It is too early to tell what the impact will be in the foodservice or OCS areas, but we've made more fractional packages this year than we did in the last two years so there is definite growth," Copeland said.

Copeland felt that coffee retailers don't always realize what flavors cost. It cost $.45 to 4.55 cents per pound of coffee to flavor it. Some flavorings cost $1.20/oz, he said. Also, the process of flavoring both beans and ground coffees is very labor intensive.

Thanksgiving Coffee * Fort Bragg, CA

An important part of Thanksgiving Coffee's business is the customized blends it develops for restaurants, inns and bed and breakfasts from its restaurant division. Although most restaurants do not choose a flavored coffee for their house blend, they do often include a percent of flavored coffee in their custom blended coffee. Some restaurants or bed and breakfasts may use a flavored coffee as a special treat, a dessert coffee or a coffee of the week. However, according to manager of the restaurant division Joe Schneiweiss, at this point flavored coffee is a consumer phenomenon and most widespread in grocery and specialty coffee stores.

White Coffee * Long Island City, NY

For White Coffee, sales of flavored coffees are increasing each year. The company has 44 different naturally flavored 100% Colombian coffees, 41 flavored decaffeinated pure water Swiss process and European process, 7 naturally flavored French roast Colombian coffees. Its product line ranges from the Almond to Vanilla Creme de Noisette. There are seven different chocolates, four vanillas, four cinnamons and seven liqueur flavors. White's top seller is Vanilla Hazelnut.

Sury Kothari, quality control specialist, sees great potential in the company's flavored coffee business. "It started with the consumer and now top class restaurants want to serve our flavored coffees. Some popular restaurant flavors are Cappucino, Irish Cream and Creme de Noisette as well as the top seller Vanilla Hazelnut. We also sell to Europe where we have seen greater and greater interest in flavored coffees in the last five years."

Liz Fader writes for various industry publications on the packaging industry.
COPYRIGHT 1991 Lockwood Trade Journal Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:part 2; Dallis Bros. Coffee, Fairwinds Gourmet Coffee Co., First Colony Coffee and Tea Co., Giles Coffee, Green Mountain Coffee Roasters, Schapira's Coffee, Superior Coffee and Tea, River Road Coffee, Thanksgiving Coffee, and White Coffee are profiled
Author:Fader, Liz
Publication:Tea & Coffee Trade Journal
Date:Dec 1, 1991
Previous Article:Jacobs Suchard leading in German market.
Next Article:Recycle coffee grounds.

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