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by Rob Bethge

4 Ways Mobile Can Future-Proof Your Coffee Business

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , , Author:

The cof­fee industry’s out­look on 2015 reminds me of the open­ing lines of Charles Dickens’ novel A Tale of Two Cities: “It was the best of times, it was the worst of times.”

First, the “the best of times”: Quality cof­fee is more pop­u­lar than ever. Consumers will gladly pay pre­mium prices for fair-trade beans, new prepa­ra­tion meth­ods, and a curated ambiance. But even as cof­fee cul­ture is now ubiq­ui­tous, so are Starbucks loca­tions. Independent cof­fee shops are squeezed by chains, by increas­ingly sophis­ti­cated home prepa­ra­tion, by con­sumer belt-tightening – indeed, by each other. As cof­fee cul­ture democ­ra­tizes, it puts pres­sure on inde­pen­dents to raise their games.

Many cof­fee pur­vey­ors see “going mobile” as a box to check and noth­ing more. It may sur­prise you to learn, how­ever: mobile can help you solve four top vul­ner­a­bil­i­ties cof­fee busi­nesses face in 2015.

A word on mobile pay­ments
You’ll notice right away that mobile pay­ment isn’t a near-term vul­ner­a­bil­ity I dis­cuss below. Mobile pay­ment is excit­ing, but it doesn’t solve a par­tic­u­larly press­ing cus­tomer prob­lem. You can already pay for your cof­fee a zil­lion con­ve­nient ways. Paying with your smart­phone will impress your date, but it won’t make your life appre­cia­bly easier.

Mobile pay­ment is com­ing, how­ever, and cof­fee brands must embrace mobile gen­er­ally for long-term sur­vival. But how do you start? Enter mobile loy­alty pro­grams. By encour­ag­ing repeat busi­ness with a mobile pro­gram, you’re forg­ing a cru­cial mobile link between cus­tomer and mer­chant, paving the ways for lots of excit­ing longer-term inno­va­tions with near-term ben­e­fits that mer­chants and cus­tomers love.

Problem:
Earning rewards can slow down the line.
Solution:
Beacons auto­mate mobile check-ins for regulars.

Beacon tech­nol­ogy is per­haps the most excit­ing inno­va­tion to hit mobile loy­alty for cof­fee busi­nesses. We pre­dict it’ll become wide­spread by the end of 2015.

Think of bea­cons as light­houses: they emit a low-energy Bluetooth sig­nal that nearby mobile phones can respond to, like mov­ing ships. You roll up to your favorite cof­fee shop, phone in hand. You’ve already signed up for a loy­alty pro­gram and checked in man­u­ally once. Sensing this, your mobile app asks if you’d like to auto­mate future check-ins with this mer­chant. If you agree, you’ll be auto­mat­i­cally checked in every time you stroll into the shop.

Beacons auto­mate mobile check-ins, which elim­i­nates fum­bling for your phone and keeps the reg­is­ter lines mov­ing. But bea­cons also empower mer­chants to deliver mag­i­cal new retail expe­ri­ences. If you browse near the coffee-making equip­ment, a mobile mes­sage can alert you to cool prod­ucts on sale. With auto­mated check-in, mobile pre-ordering becomes infi­nitely eas­ier – see below. We’re just scratch­ing the sur­face with the poten­tial of bea­con tech­nol­ogy, but it’s sure to be tremendous.

Problem:
Customers only stop in for morn­ing joe.
Solution:
Targeted mobile spe­cials bring them back all day long.

It’s an age-old prob­lem: how do you tempt the AM-coffee crowd back for lunch or snacks? Answer: mobile spe­cials tai­lored to their preferences.

Say it’s a rainy, cold Thursday after­noon. You ping your cus­tomers with a demon­strated sweet tooth for a 3pm snack: get 2 cook­ies for the price of 1 – while they’re still warm! The cus­tomer checks in at your store and taps the spe­cial to redeem it at the reg­is­ter – noth­ing sim­pler or more satisfying.

Mobile spe­cials are an incred­i­bly ver­sa­tile tool for cof­fee busi­nesses. Introduce new menu items to cus­tomers likely to enjoy them. Drive foot traf­fic dur­ing slower hours. Cross-sell prod­ucts your cus­tomers may like, but just aren’t aware of. Surprise loyal cus­tomers with an occa­sional treat. Try a “Like Us to Unlock” mobile spe­cial to moti­vate your social media fan base. Think of mobile spe­cials like a barista well-versed in every one of your reg­u­lars’ tastes. They can con­fi­dently rec­om­mend a new menu item or today’s spe­cial, and cus­tomers will appre­ci­ate the per­son­al­ized assist.

Problem:
Who has time to wait for an order?
Solution:
Mobile pre-ordering speeds up the line.

Another mobile inno­va­tion on the hori­zon for 2015 is mobile pre-ordering. The con­cept is sim­ple but thrilling: instead of rat­tling off the details of your daily cof­fee order, your mobile app will soon know your reg­u­lar order and alert wait-staff to start prepar­ing it as soon as you check-in. Talk about speed­ing up the line.

Problem:
How can you per­son­al­ize ser­vice and mar­ket more effec­tively?
Solution:
Mobile puts “big data” to work for small cof­fee businesses.

Another under-appreciated ben­e­fit of mobile loy­alty pro­grams is how data-rich they are. Customer buy­ing habits, pur­chase fre­quency, prod­uct and reward pref­er­ences, even how suc­cess­ful your lat­est mobile spe­cial cam­paign was – cof­fee mer­chants can know all of that and more instantly with a mobile loy­alty pro­gram. Marketing insights are yours for the ask­ing once you’ve got a mobile loy­alty pro­gram up and running.

Mobile loy­alty helps you test your best hunches about what new menu items to intro­duce, how to boost foot traf­fic, which higher-value prod­ucts to cross-sell, and much more. It com­ple­ments your social media efforts nicely, too. Best of all, the data you’ll gather with a mobile loy­alty phone helps you cul­ti­vate deep and last­ing rela­tion­ships with your cus­tomers in an inti­mate space: their mobile phones.

Coöperative Programs

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , Author:

Today’s mild ara­bica cof­fee farm­ers face mar­ket volatil­ity, exchange rate fluc­tu­a­tions, cli­mate vari­abil­ity and the increased preva­lence of plant blight and harm­ful insects that accom­pany cli­mate change. They tend to have small cof­fee plan­ta­tions, of around 4 acres in size, and their chil­dren do not want to con­tinue with farm­ing. At the same time, con­sumers and the indus­try expect farm­ers to use sus­tain­able meth­ods, meet stricter envi­ron­men­tal stan­dards and con­tinue pro­duc­ing excep­tional qual­ity cof­fees at high altitudes.

For mild ara­bica cof­fee to con­tinue being an option for the 21st cen­tury con­sumer, the com­monly increas­ing chal­lenges that grow­ers face also imply col­lec­tive action. In order to accom­plish change in the scale required we need com­mon objec­tives, artic­u­lated strate­gies and, more impor­tantly, the capac­ity to imple­ment them.

While there are many chal­lenges, in this arti­cle I will con­cen­trate on three: the need to achieve con­sen­sus to ini­ti­ate bold plans, the chal­lenge of cof­fee leaf rust, and the need to make sure that the mar­ket works for small farmers.

Institutional frame­work
Colombia has a strong insti­tu­tional frame­work to help over­come today’s chal­lenges. Since 1927, the Colombian Coffee Growers Federation (FNC) has been part of that story, help­ing to estab­lish and pre­serve the legacy of our nation’s sig­na­ture export. Perhaps the biggest FNC asset is its abil­ity to pro­vide a process for grow­ers to agree on com­mon objec­tives. Thanks to the legit­i­macy and demo­c­ra­tic char­ac­ter of the FNC, grow­ers can voice their needs and par­tic­i­pate in joint deci­sion making.

Being able to rep­re­sent and make deci­sions on behalf of grow­ers is cru­cial. Their man­date is ren­o­vated every 4 years through cof­fee grower elec­tions; the last took place this past September. These elec­tions are the biggest of any agri­cul­tural insti­tu­tion in the world. Selecting their legit­i­mate FNC local, provin­cial, and national lead­ers for the next four years is the first step toward arriv­ing at com­mon objectives.

Thus, democ­racy under­pins the abil­ity to develop com­mon poli­cies, sus­tain­abil­ity projects or pro­mo­tional cam­paigns. The cre­ation of the well-known Juan Valdez brand would not have been pos­si­ble with­out this sys­tem of devel­op­ing col­lec­tive action. This frame­work also facil­i­tates the devel­op­ment of col­lab­o­ra­tion agree­ments with a num­ber of clients, NGOs, inter­na­tional coöper­a­tion agen­cies, and gov­ern­ments. It also pro­vides the legit­i­macy to defend cof­fee grow­ers’ inter­ests in inter­na­tional sus­tain­abil­ity dis­cus­sions or even domes­tic polit­i­cal econ­omy strug­gles with other indus­try stake­hold­ers. In sum, we believe that with­out a strong insti­tu­tion to accom­plish projects to over­come com­mon chal­lenges, mild ara­bica cof­fee farm­ing will not be viable in the long run.

Combating Leaf Rust through Institutional Models
Between 2009 and 2011, Colombia had to face one of its most dif­fi­cult sus­tain­abil­ity chal­lenges. Up until that point, no sin­gle cer­ti­fi­ca­tion pro­to­col had sug­gested a strat­egy against the cof­fee leaf rust (Roya). Production was impacted through­out the region, with the aver­age Colombian farmer expe­ri­enc­ing a 30% reduc­tion in yields dur­ing that period.1

While Colombia and the FNC’s Research & Development Center, Cenicafé, were ready for the cri­sis in terms of pro­vid­ing new vari­eties, one aspect is to have the seeds and yet another very dif­fer­ent is to have grow­ers adopt it and over­come indus­try skep­ti­cism. It is thanks to the FNC insti­tu­tional frame­work that we were able to ren­o­vate nearly 3.2 bil­lion trees since 2009, mak­ing two thirds of the country´s plan­ta­tions rust resis­tant. Over the last five years, more than 420,000 cof­fee grow­ers renewed their plan­ta­tions, invest­ing over $1.5 bil­lion. Thanks to the ambi­tious renewal of cof­fee plan­ta­tions and pro­duc­tion recon­ver­sion devel­oped by the FNC, Colombia made an impres­sive leap in pro­duc­tion and farm mod­ern­iza­tion. Average pro­duc­tiv­ity has reached 15.2 60-kilo bags of green cof­fee per hectare, the third high­est of the past 14 years.

Purchase Guarantee
One of the biggest prob­lems small plan­ta­tion own­ers have is the abil­ity to sell their crop at trans­par­ent mar­ket prices that reflect the inter­na­tional value of their crop. In addi­tion, they need to sell their har­vest as it matures, with the liq­uid­ity of a cash pay­ment. Colombia´s sys­tem to ensure that cof­fee grow­ers receive the high­est pos­si­ble pro­por­tion of inter­na­tional prices for their beans is pos­si­ble thanks to the Purchase Guarantee Policy (PGP).

The main focus of this pro­gram is to pro­vide the con­di­tions for pro­duc­ers to sell small quan­ti­ties of cof­fee at trans­par­ent mar­ket prices 365 days a year at more than 500 pur­chas­ing points across the coun­try, in cash, close to their farms. This pro­vides mar­ket access to small pro­duc­ers, which allows them to cap­ture a higher value in spite of trans­ac­tion vol­ume, which is often very lim­ited. Since we are deal­ing with small plan­ta­tions that are har­vested through­out the year, the aver­age trans­ac­tion vol­ume when a grower goes to mar­ket is of less than 60 kilos of green cof­fee. If it were not for this sys­tem, the mar­ket would cease to oper­ate, to the detri­ment of cof­fee grow­ers, whose nego­ti­at­ing power is very reduced in their local com­mu­ni­ties.
Of course, there are a num­ber of addi­tional chal­lenges that need scaled up solu­tions and that can only be over­come with a strong asso­cia­tiv­ity and insti­tu­tional mod­els. The abil­ity to develop Geographical Indications, min­i­mum qual­ity require­ments that enhance the ori­gins’ equity and posi­tion­ing, or wide scale sus­tain­abil­ity efforts are just a few of them. The les­son is clear: united we can do more. All too often, con­sumers view cof­fee as a sim­ple com­mod­ity that they take for granted; many traders want to see it as an inter­change­able good that is just to be traded. Colombian grow­ers, how­ever, take a dif­fer­ent view. It is their pride and the result of indi­vid­ual and col­lab­o­ra­tive efforts. When you have a chance, please stop and smell the beans and become aware of the chal­lenges that hun­dreds of thou­sands of cof­fee grow­ers cur­rently face and their abil­ity to over­come them.

1 If inter­ested on how this was accom­plished please watch FNC’s lessons on sus­tain­abil­ity. Oxford, CABI, 2013. www.youtube.com/watch?v=kjfA8L10RBw

Gender Equity in Coffee

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , , Author:

If you are involved in cof­fee, it is not news to you that the indus­try today faces an array of challenges—including cli­mate change, plant dis­ease, food inse­cu­rity, pro­ducer com­mu­nity out-migration, among others—that threaten the liveli­hoods of farm­ers and the sup­ply of qual­ity cof­fee required by roast­ers and retail­ers. But on top of these issues lies another, less talked-about chal­lenge faced through­out much of the devel­op­ing world: how to empower women within their communities.

The Coffee Quality Institute (CQI) has launched a new project, the Partnership for Gender Equity (PGE), aimed at bet­ter under­stand­ing gen­der con­cerns at ori­gin and how CQI and other indus­try mem­bers can help address them. The col­lab­o­ra­tive research ini­tia­tive includes par­tic­i­pa­tory work­shops in four coun­tries, as well as an exten­sive lit­er­a­ture review, to pro­duce a final report con­tain­ing rec­om­men­da­tions for action, includ­ing fur­ther areas for study, pilot projects, and investments.

Why focus on gen­der equity now?
With so many dif­fi­cult and urgent issues to address in the indus­try, one might ques­tion whether com­mit­ting resources to gen­der equal­ity at this time is a priority.

Because of the scale of our chal­lenges, I believe we can’t afford not to focus on gen­der equity,” said David Roche, CQI’s Executive Director. “Experience around the world demon­strates the pos­i­tive impacts of empow­er­ing women in agri­cul­tural com­mu­ni­ties and indi­cates a clear oppor­tu­nity to strengthen the cof­fee sup­ply chain – to make it more resilient in the face of adver­sity. This fits the mis­sion of CQI: to improve both the qual­ity of cof­fee and the lives of those who pro­duce it.”

The promise of empow­er­ing women in devel­op­ing economies, the high return on invest­ment, is so well doc­u­mented that most gov­ern­ment and NGO devel­op­ment orga­ni­za­tions now require a gen­der equity com­po­nent for devel­op­ment pro­grams. Yet there remains an oppor­tu­nity to develop spe­cific approaches for coffee-producing com­mu­ni­ties to encour­age and cap­i­tal­ize on improved gen­der equity. And mem­bers of the indus­try need guid­ance on how they can sup­port that effort through­out the value chain.

There has been quite a bit of enthu­si­asm and sup­port for the ini­tia­tive. It is clear that the cof­fee indus­try is look­ing for some direc­tion. They know it is impor­tant to address gen­der equity, but don’t know the ‘how’,” com­mented CQI’s VP of Strategic Partnerships Kimberly Easson. “The Partnership for Gender Equity aims to pro­vide us with an informed approach to tap­ping into the full capa­bil­i­ties of both men and women in cof­fee grow­ing com­mu­ni­ties – and impor­tantly, an approach devel­oped col­lab­o­ra­tively with mem­bers of those communities.”

Developing a producer-based per­spec­tive
The first inter­ac­tive gen­der work­shop was held in October 2014 in Popayan, Colombia with 34 local men and women farm­ers and six inter­na­tional indus­try par­tic­i­pants. Together they explored the bal­ance of power in com­mu­nity and sup­ply chain rela­tion­ships, the rel­a­tive share of work and income, and other dynam­ics that influ­ence the well-being of com­mu­ni­ties and hence, the health of the cof­fee sup­ply chain. Through the work­shop exer­cises, par­tic­i­pants gained new per­spec­tives about the value of women’s work and the impor­tance of mak­ing shared deci­sions on issues that impact fam­ily well-being. Building on this new under­stand­ing, the group dis­cussed a vision for the future, and how to improve upon cur­rent con­di­tions based on the gen­der analysis.

Future work­shops are sched­uled for Nicaragua in January 2015, Uganda in February, and Indonesia later in the year.

Industry par­tic­i­pa­tion for suc­cess
ACDI/VOCA, the respected global devel­op­ment orga­ni­za­tion and a leader in inclu­sive mar­ket devel­op­ment, recently com­mit­ted to becom­ing a found­ing part­ner for CQI’s gen­der ini­tia­tive, bring­ing both core fund­ing and a com­bined exper­tise in strength­en­ing cof­fee value chains and increas­ing gen­der equity in house­holds, com­mu­ni­ties and mar­kets around the world. Additionally, AMFOTEK, a devel­oper and man­u­fac­turer of pre­mium cof­fee and other bev­er­ages and a 100% woman-owned busi­ness enter­prise (WBE) based out­side of Chicago, has signed on as a found­ing partner.

CQI con­tin­ues to invite involve­ment in the ini­tia­tive through fund­ing oppor­tu­ni­ties and work­shop par­tic­i­pa­tion. Interested indus­try mem­bers should con­tact Kimberly Easson at keasson@coffeeinstitute.org.

Consistency In a Growing Industry

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , , Author:

Of all the dis­cus­sions I’ve had in the world of Specialty Coffee— debates over proper use of Extract Mojo, mil­i­tant agree­ment or dis­agree­ment with what­ever Scott Rao book just came out, that café/roaster that used to be cool but like, totally sold out— there’s one that I’ve always been par­tic­u­larly gripped by: Consistency, and in par­tic­u­lar, what we actu­ally talk about when we talk about consistency.

It’s a sub­ject mulled over the way a younger you once dreamed about being an adult— with bright, lofty expec­ta­tions, but no clear idea on how we’ll all actu­ally get there. In the still bur­geon­ing indus­try of Specialty Coffee, where agree­ment is not always an option, we can at least col­lec­tively and deci­sively share one dream. Growers, buy­ers, roast­ers, baris­tas, cus­tomers— we all want to have our cof­fees taste as good as they can be, with­out fail, all the time.

Obviously, a great many fac­tors go into this. And of all the bev­er­age indus­tries, we have some of the most unique hic­cups in terms of chal­lenges. The one that stands out to me— and for the pur­poses of this essay, the one I’ll set my focus on— is that our drinks are largely all made from scratch mate­ri­als and all made to order.

There at the very end of the cof­fee bean’s jour­ney comes its biggest threat.

Our friends in sim­i­lar indus­tries don’t have this prob­lem. The mois­ture con­tent of malts that go into a craft beer, the almost super­sti­tious way a vint­ner posi­tions his grapes, a whiskey connoisseur’s selec­tion of the per­fect bar­rel— these are all deci­sions made behind closed doors, with the peace and pur­pose that comes with clear-cut prac­tices and method­ol­ogy. This is sim­i­lar to a scene you would see at a cof­fee roast­ing facil­ity. But where the story ends for most bev­er­ages, ours has one last chapter.

Cafes, in con­tra­ri­ety to roast­ing facil­i­ties and pro­cess­ing loca­tions, are often bustling, demand­ing places. They’re more akin to a busy open kitchen than the hushed lab­o­ra­to­ries dis­cussed above, and the baris­tas are more akin to cooks. Orders come in, are passed down the line, exe­cuted, then passed along. Outside of the café, we can focus in on the smaller parts that move the larger wheel. But the make or break of our indus­try falls on the barista, and once those café doors are open, it’s game on. This requires rep­e­ti­tion more than it does artistry, a con­cept that can be met with a fair amount of resistance.

In my expe­ri­ence, con­sis­tency in the café is some­thing that is feared more than it is cel­e­brated. If we deliver the same prod­uct, over and over again, with­out devi­a­tion or impro­vi­sa­tion, then there is very lit­tle that sep­a­rates us from being fast food employ­ees. Third-wave baris­tas are often times referred to as arti­sans, and artistry by its nature does not value consistency.

But per­haps we should be empha­siz­ing it more. Because with­out a repeat­able expe­ri­ence, it may be sig­nif­i­cantly harder to have patrons come along and sup­port us. We need con­stancy in order to give new cus­tomers a frame of ref­er­ence for why Specialty Coffee is valu­able. Say you had a restau­rant you really loved. But, if the food was only some­times good and at its worst, ter­ri­ble, you’d find a new restau­rant. Even some of my favorite spe­cialty cafes suf­fer from spo­radic quality.

Because we’re a newer indus­try that is heav­ily influ­enced, almost defined, by growth and inno­va­tion, it is hard to find a repeat­able model while also pro­gress­ing for­ward. But there are things that I believe we can do to help.

Being trans­par­ent with our­selves and oth­ers is a step I see many have already taken. Sharing roast pro­files, TDS read­ings, and end­less brew recipes/theories in a respect­ful man­ner is prac­ti­cally com­mon­place while more and more edu­ca­tional books and videos are becom­ing avail­able (I can remem­ber a not so dis­tant past where there seemed to be only online mes­sage boards and that one book by David Schomer.)

Openness to the growth of automa­tion is, in my opin­ion, another move for­ward. While once looked at with skep­ti­cism in third-wave cafes, shops all over the world are embrac­ing a new gen­er­a­tion of batch-brewers and vol­u­met­ric machines to help unbur­den baris­tas dur­ing the busy café hours, free­ing up their focus to serv­ing and engag­ing the cus­tomer rather than fight­ing against scales and timers.

This also changes how shops can be set up. With the advance­ment of automa­tion, you need fewer baris­tas. While this is often seen as a threat to work­ing baris­tas every­where (includ­ing myself at a time), what this actu­ally means is more money and con­trol for the career baris­tas that are in it for the long haul, while also pro­vid­ing a posi­tion made up of sim­pler, eas­ier tasks for the peo­ple that just want a cool job while they’re in school or pur­su­ing other fields.

Reality is that most baris­tas will not be per­ma­nent baris­tas, and the train­ing it takes to get a novice to the level of skilled pro­fes­sional is an invest­ment too great for many small busi­nesses. This isn’t just because of the sheer amount of prod­uct and time it takes to train, but also because you’re now “try­ing out” your invest­ment on pay­ing cus­tomers. Charging some­one the same price for a drink made by a skilled hand and one made by a shaky new­bie on his first day is not only an eth­i­cal gray area, it will hurt your busi­ness, and the indus­try, in the long run. The cus­tomer is pay­ing for incon­sis­tency, but they won’t pay forever.

The last step towards con­sis­tency that I’ll speak about is this: Acknowledging the fact that we’re test­ing our­selves on a live and pay­ing audi­ence and that our goal is to keep them around for the jour­ney for­ward. By sim­ply keep­ing this at the fore­front of our deci­sions is a step in the right direc­tion. With the way we treat our patrons, our edu­ca­tional spiels to friends who aren’t quite sure what you do for a liv­ing, the way we hold our­selves as pro­fes­sion­als— in all the intri­ca­cies that go into what we do— we should do with the mind­set that most cus­tomers are still test­ing us too, and the goal should be to make that as com­fort­able and reward­ing an expe­ri­ence as pos­si­ble. Talking, shar­ing, test­ing, chal­leng­ing— this all will con­tinue to push us for­ward for that ever chang­ing and lofty goal: To make cof­fee taste as good as it can, consistently.

August Afternoon Seeks Cool Operators

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , Author:

It’s midafter­noon in August, and I’m walk­ing through the lofty cor­ri­dors of a land­mark hotel in the heart of a major east coast city. I’m walk­ing past gor­geous dis­plays of exotic flora, past the ele­gant water dis­play with arch­ing foun­tains, and right past a lonely look­ing barista, idly pol­ish­ing her MegaBucks Italian espresso machine, which is parked behind eight or so empty barstools at this very hip, very deserted lobby cof­fee bar. I’ve got 20 min­utes before my next meet­ing, just around the cor­ner from this hotel; the roasted cof­fee smells deli­cious, and the lonely barista and her cof­fee bar look so friendly and invit­ing. There’s just one catch: I’m a cof­fee LOVER, but I rarely drink hot cof­fee after 10:30 in the morn­ing. It’s a quirk of mine. In fact, I gen­er­ally don’t drink any­thing hot in the after­noon, espe­cially in August, but a quick check of the menu here says I’m out of luck: there’s cof­fee, Café Au Lait, Café Mocha, Café Latte, Mocha Latte, and Espresso shots. No iced cof­fee, and no iced teas. In fact, noth­ing cold at all. I keep walking.

I walk to the near­est esca­la­tor, down toward my meet­ing. At the bot­tom of the esca­la­tor is the hotel gift shop, nearly deserted this time of the after­noon. The encounter with the lobby cof­fee bar has ignited my daily drive for a nice, cold bev­er­age, prefer­ably a lov­ingly brewed iced cof­fee. Maybe even a nice, del­i­cately fla­vored iced tea. In any case, some­thing cold and deli­cious, with some chew­able ice I can linger over and savor dur­ing my meet­ing. I walk into the hotel gift shop, hop­ing I might get lucky and find some­thing per­fect to take to my meet­ing. Alas, while they do have cold teas and chilled cof­fees here, they don’t have the lov­ingly brewed kind, just the kind with flashy labels, and unfath­omable ingre­di­ents listed on the back: “high fruc­tose corn syrup, sodium hexa­m­etaphos­phate, caramel color, nat­ural fla­vors (really??)”. Every one of them is some­where between 100 and 300 calo­ries, and of course, this small gift shop also doesn’t have ice, which kind of kills the deal for me. The days of sodas and slushies has passed me by; I’m a cold brewed, low-cal kind of guy these days. I keep walking.

Around the cor­ner I enter the lobby and recep­tion area for the com­pany I am meet­ing and check in with the recep­tion­ist. I’m ten min­utes early so the friendly recep­tion­ist tells me to help myself to a bev­er­age in the adja­cent lounge and … HELLO! Imagine my pleas­ant sur­prise to dis­cover an invit­ing array of sin­gle serve cof­fees, a mod­ern look­ing state-of-the-art brewer, and YES! an iced tea pro­gram. Sitting smack dab in the mid­dle of the counter, sep­a­rat­ing the rack of sin­gle serve cof­fee choices and brewer, is one of those beau­ti­ful lit­tle coun­ter­top ice machines, the kind that makes deli­cious, chew­able ice. In a box to the right of this ice machine is a selec­tion of bagged teas, includ­ing some that say “cold brewed” right on them. Jackpot! A moment ago I was mildly per­turbed at not get­ting my after­noon pick-up, and now here I am look­ing at an entic­ing selec­tion of teas. I’m pretty sure I could fig­ure out how to make an iced cof­fee here too, if need be.

I had my meet­ing, a good one, and enjoyed my cup of iced tea. Even as I par­tic­i­pated in the meet­ing, my mind had latched onto some­thing I couldn’t stop think­ing about: in a world gone “hot cof­fee crazy,” where are all the iced tea and iced cof­fee options? Please under­stand, I LOVE cof­fee. It’s great you can get pretty good hot cof­fee almost any­where. And the vari­ety! Yet, I’ve dis­cov­ered there’s more to day­time liq­uid refresh­ment than hot cof­fees and teas. Particularly in the after­noon, and even more par­tic­u­larly on hot days or in hot cli­mates, there are cold bev­er­ages. Cold teas, cold cof­fees, heck, there’s even cold water!

So why isn’t it eas­ier to get a great tast­ing, per­son­al­ized iced bev­er­age? The mar­ket is there. The hot cof­fee folks have proven that given con­ve­nience and choice, peo­ple will embrace their options and do what con­sumers do best. Studies have shown iced cof­fee and iced tea are grow­ing trends, and have shown that after­noon day­parts in par­tic­u­lar are under­served by hot cof­fee only. I do under­stand not every­one has an ice machine handy, but I also know there are good ones out there that fit the bill, and you can’t make iced drinks with­out ice. So now I’m wait­ing, patiently, for the inevitable growth in deli­cious, iced teas and iced cof­fees, in every office break room, in every lobby lounge, in every place we want them to be, and in every fla­vor and style imag­in­able. And I’ll have mine with that nice, chew­able ice, please.

Go Grateful

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , , Author:

Like many indus­tries, the global cof­fee indus­try is faced with chal­lenges of an inven­tively lim­it­less num­ber and vari­ety. Climate change feels beyond the industry’s con­trol. Irrigation and arti­fi­cial feed­ing of the trees can in some cases be used to deal with this, but in many coun­tries this is just not pos­si­ble. Crop-related dis­eases are another chal­lenge – curi­ous sound­ing names like Roya fun­gus, leaf rust and cof­fee berry borer make us quake. Fungicides can help, but if you are an organic pro­ducer, you just don’t have this option. Urbanization is yet another chal­lenge, with excel­lent cof­fee grow­ing land being sold off as farm­ers are given choices and chances to get sub­stan­tial pay­outs they never had access to before. Shifting con­sumer pref­er­ences, with a lim­it­less num­ber of options, are yet another con­stant trial.

Most of these fac­tors seem out of the con­trol of coffee-associated com­pa­nies, which are vul­ner­a­ble to los­ing busi­ness, cus­tomers, crops, land, employ­ees and even their rep­u­ta­tions. Finding effec­tive strate­gies for deal­ing with the sense of defense­less­ness, expo­sure and help­less­ness that is emerg­ing can be daunt­ing. So what can cof­fee com­pa­nies do when they expe­ri­ence this vul­ner­a­bil­ity in so many are­nas? The first step is to rec­og­nize that many things are truly out of their con­trol, although there are always some pos­i­tive actions they can take. But there is one tac­tic that is totally within each and every cof­fee indus­try member’s con­trol and capa­bil­ity: They can proac­tively and suc­cess­fully become con­scious of, and express their grat­i­tude in, every aspect of their work and their lives. It has been proven through many dif­fer­ent sci­en­tific stud­ies and case exam­ples that the prac­tice of grat­i­tude cre­ates extremely pos­i­tive results and actions.

Let’s start with the exam­ple of employee reten­tion – there are so many dif­fer­ent options for today’s work­force, and so lit­tle loy­alty. Whether it is an awe­some barista or a cre­ative, resource­ful, inno­v­a­tive cor­po­rate exec­u­tive you want to keep, there is lit­tle faith­ful­ness in today’s work­place with a major excep­tion: loy­alty and engage­ment are the result when peo­ple feel we value, appre­ci­ate and are grate­ful toward them!

So what are the real ben­e­fits of acknowl­edg­ment and grat­i­tude in the work­place? The Gallup Organization reports that a whop­ping 52 per­cent of peo­ple are not engaged in their work. They are the “sleep­walk­ers,” those just putting in time. I say they can and will be engaged – and stay engaged – if lead­ers first become con­scious of their own grat­i­tude and appre­ci­a­tion toward their peo­ple, and then express it to them. The Society for Human Resource Management (SHRM) said in an employee reten­tion study that the num­ber one rea­son peo­ple leave is lack of appre­ci­a­tion. Gratitude will not only keep them there, but make them per­form to their max­i­mum levels.

This form of lead­er­ship is what our employ­ees, our ven­dors, our sup­pli­ers, and yes – cer­tainly our cus­tomers – truly want. We hear so many sto­ries about good peo­ple who leave good jobs at good com­pa­nies because they DON’T feel appre­ci­ated. How can the cof­fee indus­try pre­vent the loss of these con­trib­u­tors? Expressing grat­i­tude, and estab­lish­ing cul­tures of appre­ci­a­tion are such sim­ple, cheap and always avail­able solu­tions that not only make “sense” – they makes dol­lars! Lots of them! The five C’s of Acknowledgment (Consciousness, Choice, Courage, Communications and Commitment) are a great way to start prac­tic­ing this.

Keeping cus­tomers and gain­ing new ones is a pri­or­ity in this indus­try. It is a given that cus­tomers love to be treated with respect and car­ing, and with grat­i­tude for bring­ing their busi­ness to our par­tic­u­lar cof­fee shop, and for buy­ing our own brand of cof­fee. They like know­ing that we are car­ing for oth­ers, too! So when Starbucks, for exam­ple, takes this kind of action: “In honor of World AIDS Day, Starbucks will make a 10 cent (U.S.) dona­tion for every hand­crafted bev­er­age sold in par­tic­i­pat­ing U.S. and Canada stores,” or Dutch broth­ers hon­ors cofounder Dane Boersma, who died of Lou Gehrig’s dis­ease, by hav­ing all loca­tions annu­ally donate one des­ig­nated day’s pro­ceeds to the Muscular Dystrophy Foundation, this tugs at their cus­tomers’ heart­strings. They feel proud and good about pur­chas­ing from a com­pany that cares about oth­ers, not just about prof­its. Loyalty cards are another way to show grat­i­tude to cus­tomers and sup­port cus­tomer reten­tion. There are many choices avail­able to con­sumers, so we need to express grat­i­tude toward those who choose what we offer!

And with­out a doubt, grat­i­tude is con­ta­gious! People respond in kind when they feel appre­ci­ated, or receive some spe­cial cus­tomer ser­vice. They tell great sto­ries about the ser­vice they receive. They tweet about it, they go on your blogs and com­ment. They come back and bring their associates.

Moreover, don’t for­get the emo­tional and health ben­e­fits of grat­i­tude and acknowl­edg­ment – both for the giver and the receiver! Dr. Michael McCullough reported in a study that focused on the effects of grat­i­tude on phys­i­cal and emo­tional well-being that peo­ple who prac­ticed grat­i­tude rated their lives more favor­ably and expe­ri­enced fewer symp­toms of phys­i­cal ill­ness, such as stress and fatigue. When we feel a sense of well-being, it is much eas­ier to appre­ci­ate and express grat­i­tude toward others.

It is clear that there are many chal­lenges that may seem out of con­trol at times for the cof­fee indus­try. So when you as a proud but wor­ried mem­ber of it are feel­ing vul­ner­a­ble, Go Grateful! It’s a sure­fire way to get unpre­dictably pos­i­tive results, for you and your recipients!

Please visit: www.GratefulLeadership.com

Branding for the Future

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , Author:

Over the past 20+ years I have had the oppor­tu­nity to speak to count­less num­bers of cof­fee pro­fes­sion­als at con­ven­tions and sem­i­nars around the globe. Marketing is a hot topic, but Branding is rarely if ever discussed.

Regardless of the indus­try or the size of the com­pany, Branding is one of the most impor­tant aspects of a suc­cess­ful business.

There comes a time in every busi­ness when it is essen­tial to con­sider re-branding.  Re-branding is a scary propo­si­tion for estab­lished businesses…will peo­ple accept a new name, logo, or buy­ing proposition?

This is the ques­tion that one well-known roaster/retailer faced when he decided to change his company’s name and image from Caffé Pronto to Ceremony Coffee.  I asked Vincent Iatesta why and how he made the change.

Many of you will relate to this story. After more than 10 years in busi­ness, Vincent and his team wanted a brand that was bet­ter aligned with the company’s prod­ucts, qual­ity and ser­vice offer­ing.  He believed the name Caffé Pronto sounded like a QSR estab­lish­ment and was a hin­drance in build­ing the whole­sale busi­ness rather than a brand that tar­get cus­tomers engaged with.  They were already work­ing hard with cus­tomers, sourc­ing amaz­ing cof­fees and roast­ing light to high­light the ter­roir, but the Caffé Pronto con­cept didn’t really cap­ture or con­vey any of this.

They took a hard look at their busi­ness and through a year-long inter­nal rebrand­ing ini­tia­tive, arrived at the Ceremony con­cept, and “we haven’t looked back”.  Changing the name of the com­pany was a start, but it also required new pack­ag­ing, web­site and every­thing else related to the iden­tity.  They also fine-tuned other aspects of their busi­ness model.
•    A sig­nif­i­cant focus on sea­son­ally fresh sin­gle ori­gin cof­fees replaced a heavy hand on blends
•    Remaining blends were renamed to align with the new brand
•    Both whole­sale and retail menus were sim­pli­fied and more coffee-centric
•    Customer ser­vice capac­ity was improved in admin, tech sup­port and train­ing
The entire focus of the com­pany changed from main­stream cof­fee offer­ings to cel­e­brat­ing the ori­gin, pro­duc­tion, and ser­vices of coffee.

Did it work?  The retail and whole­sale growth of Ceremony is amaz­ing.  They con­tinue to re-evaluate the busi­ness with the same thought­ful­ness they used when they did their orig­i­nal re-branding.  For more infor­ma­tion about Ceremony cof­fee visit www.ceremonycoffee.com.

Rebranding is not just for roast­ers and retail­ers.  Producers are faced with the same chal­lenge of ensur­ing their brand is aligned with their mis­sion, val­ues, capa­bil­i­ties, and customer’s needs.

This year one of Brazil’s most inno­v­a­tive cof­fee pro­duc­ers took a long hard look at their brand propo­si­tion.  After a trip to Europe in early sum­mer, the Daterra mar­ket­ing team lead by Gabriel Moreira decided to accept the chal­lenge they received from exist­ing and poten­tial cus­tomers…
“We don’t want to pur­chase the same cof­fee that other roast­ers in our com­mu­nity are pur­chas­ing. We want some­thing spe­cial and exclu­sive from all of cof­fee supplies”.

Daterra had built a rep­u­ta­tion of being a big farm with a strong focus on automa­tion and qual­ity.  The prob­lem was, as the Daterra brand became more rec­og­nized and widely used, some roast­ers began to think of the com­pany as too big and not able to meet their busi­ness focus. What made the Daterra brand strong now appeared to be a bar­rier to success.

For years, the Daterra pro­duc­tion and mar­ket­ing team had been talk­ing about the hid­den jew­els or mas­ter­pieces on the farm.  Last year they decided to con­duct an auc­tion to pro­vide bet­ter recog­ni­tion of the Daterra brand as a niche cof­fee pro­ducer.  Even after the suc­cess of the auc­tion, roast­ers were still not clear about the capa­bil­i­ties of the farm.

Thus, the Daterra rebrand­ing project was born.  The task was straight­for­ward but the work was any­thing but sim­ple.  How do you re-brand a large 20-year old farm to meet the needs of the cur­rent market?

The mar­ket­ing, pro­duc­tion and qual­ity teams had no option but to work with the real­ity of the farm.  The fol­low­ing were a few key real­i­ties, which proved to be both plusses and minuses for the team.
•    17,000 acres, with about 40% planted in cof­fee
•    15,000,000 trees
•    Average annual pro­duc­tion of 10 mil­lion pounds of green cof­fee
•    GPS farm man­age­ment
•    Advanced sort­ing equip­ment
•    Focus on exper­i­men­ta­tion and innovation…dedicated sci­en­tist on staff
•    100% Traceability…ability to sort all cof­fee pro­duc­tion by loca­tion on the farm, vari­etal, pro­cess­ing method and cup pro­file
•    Full qual­ity range of products

The team rec­om­mended the Three Farm brand­ing con­cept as an effec­tive tool for roast­ers to help deter­mine what level cof­fee they need for dif­fer­ent uses.

Brands of Daterra    Quality     Attributes
Classics    82–85    RA Certification – Large Quantities mar­keted by menu name.  Used for blend­ing and sin­gle ori­gin brew­ing.
Collections    85–88    RA Certification – Registered by lot and menu name.  Recommend for sin­gle ori­gin brew­ing.
Masterpieces    89 –    RA Certification – Very small lots, excep­tional qual­ity, fully trace­able, rarely reproducible

To learm more about Daterra Coffee con­tact them at www.daterracoffee.com.br

Resilient Together

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , , Author:

Four years ago I had the oppor­tu­nity to visit a community-based small-farmer coöper­a­tive in San Jeronimo, Nicaragua that is part of PRODECOOP, the well-known 2,000-member Fair Trade Coöperative. I was trav­el­ing with Raul Diaz, Director of CII-ASDENIC, and Chris Bacon, a researcher for the Community Agroecology Network. These orga­ni­za­tions were part of a new food secu­rity project that was being funded by Green Mountain Coffee Roasters at the time. The goal of this project was to help fam­i­lies become more resilient to “los meses fla­cos” (the thin months of food scarcity) and to other poten­tial shocks that they might be exposed to at the house­hold level, like cli­mate change, low mar­ket prices, and more.

San Jeronimo is a small, iso­lated rural ham­let in the munic­i­pal­ity of Telpaneca, in the north­ern depart­ment of Madriz. One dirt road runs through vil­lage that con­sists of 40 or so small homes that are vis­i­ble from the road.

This par­tic­u­lar morn­ing, we were plan­ning to meet with the coöperative’s lead­ers to talk about the plans for the food secu­rity project. During the meet­ing I remem­ber ask­ing the co-op lead­ers what their dreams were for this project. First, they wanted to estab­lish a seed bank so that they could save the seeds of crops that grew well in their com­mu­nity – seeds of prod­ucts that their mem­bers’ fam­i­lies liked to eat. They said that the gov­ern­ment often offered free or low-cost seeds, but these were fre­quently vari­eties that either didn’t grow well in the local micro-climate or were not veg­eta­bles that the fam­i­lies like to eat. Secondly, they also wanted to estab­lish com­mu­nal silos where fam­i­lies could store basic grains.

Two years later, when Raul and I again vis­ited San Jeronimo, we met a very moti­vated woman who had left space in the mid­dle of her small corn­field for a veg­etable gar­den. She expressed con­cern about hav­ing enough water for the gar­den dur­ing the dry sea­son. Twice a day, fam­i­lies in the area hiked almost a half-an-hour up a large hill with buck­ets to fetch the clean­est water at its source. They spent almost two hours a day gath­er­ing water to meet their fam­i­lies’ basic needs for this pre­cious com­mod­ity. I asked Raul if CII-ASDENIC had ever imple­mented a potable water project. He told me the orga­ni­za­tion had worked on a few munic­i­pal water projects, and was hop­ing to do more. Two months later, a water com­po­nent was added to the food secu­rity project in San Jeronimo.

Little by lit­tle, both projects took shape. Family gar­dens were devel­op­ing, and the seed bank became a real­ity. During one of my vis­its, the entire com­mu­nity was out shov­els in hand, dig­ging a 3-foot deep trench and lay­ing plas­tic pipe from the water’s source, down­hill to the small hamlet.

This March, Raul and I met with the Water Committee, made up of co-op mem­bers. They pro­vided an encour­ag­ing report on the project’s progress. Toward the end of the meet­ing I asked the Committee’s leader, Maximino Gutierrez Lira, if San Jeronimo had been affected by la roya, or cof­fee rust dis­ease. He slowly shook his head up and down, and said that two years ago the com­mu­nity co-op col­lected 2,000 quin­tales of cof­fee; this year 300 quin­tales – an 85% drop in yield due to la roya. This was the harsh­est impact from la roya that I had run into in all of my trav­els. The norm was closer to a 25–65% loss. I was stunned. I asked Maximino, “Have you lost co-op mem­bers to migra­tion?” He said, “No.” I was con­fused, and couldn’t imag­ine any fam­ily or com­mu­nity with­stand­ing an 85% loss of income from cof­fee and not leav­ing this remote area for other paid work. I must have looked con­fused too, for Maximino said, “Follow me.”

We walked over to the side of the co-op build­ing and entered a room that had eight 7 ft. tall metal silos filled with dried corn and beans. He explained that fam­i­lies filled these silos together, and together they would draw from these grains dur­ing “the thin months” to feed their fam­i­lies. If there was any extra, they would together decide to sell this excess into the local mar­ket as another source of income. Then Maximino said, “Let’s go for a walk.”

We left the co-op build­ing and walked down the only dirt road in town. In front of every home there was a 4 ft. tall cement pil­ing, painted bright green, with a spigot on top. Maximino explained that every home now had fresh, clean water deliv­ered right to house. In addi­tion to pro­vid­ing abun­dant clean water for drink­ing, fam­i­lies were using the water for their food gar­dens. We walked behind a few homes with their own­ers and saw beau­ti­ful and pro­duc­tive gar­dens. He explained that with fresh clean water, boun­ti­ful veg­etable gar­dens, and the com­mu­nal silos for food and income, fam­i­lies had no need to leave the com­mu­nity. In fact, they were bet­ter off now, even with la roya, than they were four years ago.

What has San Jeronimo taught us? Members of this com­mu­nity have with­stood the shock of los­ing 85% of their income yet are still work­ing their cof­fee. While resources are needed to start projects like this, this les­son is about more than resources. It is about the impor­tance of moti­va­tion, the pos­i­tive atti­tude of San Jeronimo farm­ing fam­i­lies, and their will­ing­ness to work together for the com­mon good. They are a model of resilience; a model that our indus­try des­per­ately needs to repli­cate if we are to thrive from tree to cup in an increas­ingly chal­leng­ing envi­ron­ment. If we are inter­ested in the long-term health and resilience of our indus­try and a con­sis­tent sup­ply of spe­cialty cof­fee, we must fol­low the lead of the farm­ers of San Jeronimo, and work and invest in our future together, which starts on the farm.

The Price of Emission

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , , Author:

There are a num­ber of say­ings that depict the con­cept; ‘the more things change, the more they stay the same’, like ‘what goes around comes around’, and there is exam­ple after exam­ple that sug­gests the same for the fash­ion world. I recently remem­ber bell-bottom jeans and the colour com­bi­na­tion of pink and choco­late, and I was around the last time those things were the hot thing in a Sears catalogue.

The world of cof­fee is no dif­fer­ent. For exam­ple, cof­fee bars all over North America are doing pour over cof­fee once again, and we can thank Mrs. Mellita Bentz for that sim­ple lit­tle inven­tion she cre­ated back in 1908. The way cof­fee bars talk about pour-over sin­gle cup brew­ing you would think that this was the newest thing to hit cof­fee cul­ture this cen­tury. On the note of the pour-over sin­gle cup cof­fee con­cept, one could even go as far as to say that it was never really ‘out-of’ style.

Another incred­i­bly pop­u­lar coffee-thing these days in North American is ‘micro-roasting.’ The term itself takes on var­i­ous def­i­n­i­tions, but with the pro­lif­er­a­tion of macro level roast­ing com­pa­nies all look­ing for their share of the mar­ket, small inde­pen­dents are arm­ing them­selves with knowl­edge and high-quality organic green cof­fees from around the world, pre­pared to take on the self-professed coffee-loving pub­lic by intro­duc­ing the ‘the­atre’ of roast­ing. These small micro-roasteries are sim­i­lar in look and feel to the hun­dreds of small-town cof­fee roast­ers that came from the birth­place of cof­fee, and made their way across Europe for the past few hun­dred years.

I think cof­fee is fol­low­ing in the foot­steps of the beer indus­try and I’m not the first per­son to make that con­nec­tion. Take for exam­ple what’s hap­pen­ing in Portland. There are dozens of micro-breweries, and now micro-coffee roast­ers. These hipster-feeling cof­fee enclaves range in level of décor from sim­ple and rus­tic to sheik-feeling tast­ing bars that par­al­lel some of the world’s best mar­tini bars. What this resur­gence is doing well, is dri­ving home the value of fresh­ness as it trans­lates to value in the cup. As cof­fee drinkers’ palates evolve, the days of roast­ing cof­fee in some plant in an indus­trial sec­tion of town, putting it into a box and ship­ping it to dif­fer­ent points of dis­tri­b­u­tion, hop­ing some­one likes the look of your bag, are done. And I mean DONE. We put too much faith in the teenage stock-person to rotate the cof­fee on the shelf and all the macro-roasters are still try­ing to get the large major­ity of cof­fee drinkers to believe that cof­fee can stay fresh for 8–10 months. Quick tip to these roast­ers… ‘The new-age cof­fee drinker is far more savvy than that’.

However, with the con­cept of ‘the more things change, the more they stay the same’ comes a new fac­tor in the theme of evo­lu­tion, a theme that has to stay in-step with the chang­ing envi­ron­men­tal ‘sig­nals’ that now exist in our world, with­out impact­ing the romance and feel of what retro means to the mar­ket­ing Gurus of today’s hippest brands. When the pour-over became pop­u­lar once again, the sim­plic­ity of our beloved ket­tle was not under pres­sure to evolve, but the tra­di­tional cof­fee roaster was.

Coffee roast­ing at a basic level is: highly pol­lut­ing, with high lev­els of VOC’s (volatile organic com­pounds) being released dur­ing the roast­ing process, and con­sumes mas­sive amounts of energy, thus pro­duc­ing CO2 at rates not found with most prod­ucts we enjoy daily.  A small gas-fired cof­fee roaster that pro­duces 30 lbs. per hour con­sumes approx­i­mately 500,000 BTU’s per hour (includ­ing the after­burner), which is equiv­a­lent to 10 medium size BBQ’s run­ning on high, hour after hour. Since the turn of the 1900’s, single-pass cof­fee roast­ers have not made any marked improve­ments in how they use the air that’s moved through the green cof­fee. In fact, micro-coffee roast­ers use that so-called magic word ‘arti­san’ to dis­tract from the fact that their indus­try has not moved towards greener, and more sus­tain­able tech­nolo­gies. Even worse, the man­u­fac­tures of single-pass gas-fired cof­fee roast­ers want you to believe that improve­ments made to their highly con­sump­tive after­burn­ers are rev­o­lu­tion­ary, when in fact, the hot­ter an after-burner runs, the more GHG (green-house gasses) go up into the atmos­phere. Until 2000, nobody thought to ‘close the loop’ on cof­fee roast­ing, which leads us to take note of one small Canadian com­pany, Roastaire™ Canada, who has worked to pio­neer a way to uti­lize the hot air (energy) leav­ing the roast­ing chamber.

The resur­gence of the micro-coffee roaster, and their capa­bil­ity to pro­vide real time fresh­ness will run into bar­ri­ers set by gov­ern­ments in the form of higher EPA stan­dards. Coffee roast­ing emis­sions and energy con­sump­tion will be the Achilles-heel(s) of the micro-coffee move­ment because res­i­dents are get­ting pro­tec­tive of their air qual­ity and how indus­try mis­treats the air they breathe. California was once con­sid­ered the tough­est state in terms of emis­sions stan­dards, even cars were man­u­fac­tured to a whole dif­fer­ent level in terms of their emis­sions sys­tem. Now, all states and provinces in North America are pay­ing closer atten­tion to GHG emis­sions, and how much energy we con­sume in all aspects of our lives.

It will only be a mat­ter of time until some­one starts to pay atten­tion to the amount of energy con­sumed in our daily cup before the hard ques­tions start to get asked. In the mean­time, take a few months to enjoy your local neigh­bour­hood cof­fee roaster, because they will not last long in urban areas with­out at least a few com­plaints com­ing in, and when that hap­pens the local gov­ern­ment will be forced to act. Consider it the price of emission.

Office Coffee Service in Transition

Categories: 2014, DecemberTags: , , , , , , , , , , , , , , , Author:

Office cof­fee ser­vice (OCS) is in tran­si­tion. Although this is not a new state­ment, OCS oper­a­tors in the north­east United States can attest to the office prod­uct indus­try threat. W. B. Mason has suc­cess­fully lever­aged their cus­tomer rela­tion­ships to add the break room ver­ti­cal. Office prod­uct deal­ers have offered break room prod­ucts for many years, although most did not offer a com­pre­hen­sive equip­ment pro­gram. The tran­si­tion is under­way; some office prod­uct deal­ers now offer equip­ment, and com­pete against OCS oper­a­tors around the country.

The office prod­uct indus­try becomes more com­pet­i­tive as whole­sale clubs and Amazon pro­vide more prod­ucts, and deal­ers are look­ing for dif­fer­ent ways to grow their busi­ness. The office prod­uct dealer has con­sid­ered the break room a legit­i­mate add-on seg­ment to grow their busi­ness; how­ever, they pro­vided prod­ucts, but not equip­ment. Approximately two years ago United Stationers, the largest whole­saler to the office prod­uct indus­try, stated: “Own the cof­fee, own the break room (para­phrased).” Owning the break room requires a free equip­ment pro­gram, so some office prod­uct deal­ers now offer free equip­ment and ser­vice. The office prod­uct indus­try has seen W.B Mason add a com­pre­hen­sive cof­fee pro­gram, and grow their busi­ness substantially.

Verticals such as vend­ing and bot­tled water com­pa­nies have com­peted with OCS oper­a­tors for many years. These indus­tries under­stand the cap­i­tal expense required to own the ser­vice. Many office prod­ucts deal­ers do not have a strat­egy for lever­ag­ing cap­i­tal, but rather employ large sales teams and use sophis­ti­cated mar­ket­ing pro­grams, i.e. “the easy but­ton”, “tak­ing care of busi­ness”, “who but W.B Mason”. Two rea­sons office prod­ucts deal­ers pen­e­trate OCS cus­tomers are price, and the buyer. So how do office prod­uct dis­trib­u­tors offer such low prices, and what influ­ences the buyer?

By con­sid­er­ing the monthly office expen­di­ture on all con­sum­able prod­ucts, and under­stand­ing the seg­ment expen­di­ture, the office prod­uct dealer has found a way to build their busi­ness. Approximately 20% of an office’s expense is break room, and 80% includes remain­ing con­sum­ables. These num­bers may be manip­u­lated in many ways, and are pro­vided as a base­line to under­stand pric­ing. As com­pe­ti­tion in the office prod­uct indus­try increases, the deal­ers are seek­ing a com­pet­i­tive advan­tage ver­sus other office prod­uct deal­ers, not ver­sus OCS oper­a­tors. The method is to price the 20% break room seg­ment at or below cost, to cap­ture the 80% remain­ing con­sum­able office prod­uct seg­ment, and pro­vide cof­fee equip­ment and ser­vice at no-charge.

OCS oper­a­tors, in many cases, believe Office Product com­pa­nies can­not pro­vide the required level of ser­vice to keep the busi­ness. Staples rev­enue in 2003 was 11.6 bil­lion, and by 2013 increased to 24.3 bil­lion. Was the increase at Staples due to poor ser­vice? Perhaps the ser­vice is accept­able and the com­pany employs good mar­ket­ing and sales peo­ple, although the ver­ti­cal strate­gies employed may be more com­plex. Office prod­uct deal­ers have become legit­i­mate com­peti­tors in the office cof­fee seg­ment, and OCS oper­a­tors need a strat­egy to com­pete. Some strate­gies require new or dif­fer­ent prod­ucts that must be sold to the buyer.

The end-user buyer is ulti­mately inter­ested in con­ve­nience. The buyer may be a facil­ity man­ager, office man­ager, admin­is­tra­tor, or recep­tion­ist. Too often the buyer does not drink cof­fee, and an appeal to qual­ity of prod­uct is not a sell­ing point. Because the buyer does not drink cof­fee, the sale is now based on cost, and ease of pur­chase. However, the buyer also has an oblig­a­tion to pro­vide a prod­uct accept­able to the rest of the office pop­u­la­tion. Therefore, using a national brand prod­uct becomes a legit­i­mate pur­chas­ing strategy.

Too often a sales­per­son is faced with a price-only strat­egy because of a pro­pri­etary prod­uct, although the sell­ing strat­egy should have a qual­ity story. Scheduled cof­fee tast­ing con­tin­ues to be a suc­cess­ful OCS method to prove a qual­ity prod­uct. The on-site tast­ing allows an oper­a­tor to dis­play national brands, locally roasted cof­fee, and pri­vate labels in the for­mat the cus­tomer wants. The strat­egy for the oper­a­tor is to exploit their indus­try exper­tise, and dif­fer­en­ti­ate them­selves from other sup­pli­ers. To be clear this is a sell­ing tech­nique, not a pric­ing strat­egy. Additionally, a suc­cess­ful tast­ing strat­egy is embraced by own­ers, man­agers, and employ­ees of OCS Companies.

Many oppor­tu­ni­ties exist to be edu­cated in cof­fee, and to under­stand the com­pet­i­tive advan­tage an OCS com­pany offers. The indus­try con­tin­ues to inno­vate, and dif­fer­en­ti­at­ing prod­ucts are avail­able to oper­a­tors. OCS man­agers should spend an ade­quate amount of time at trade shows and edu­ca­tional sem­i­nars as part of their strat­egy. Many shows are avail­able through­out the year, and are typ­i­cally in a tourist des­ti­na­tion, so atten­dees can unwind. Choosing a show to attend should be based on rel­e­vance to the operator’s goal, and will pro­vide max­i­mum suc­cess if atten­dees have tar­geted ven­dors to visit. Office Coffee Service is in tran­si­tion; take advan­tage of the opportunities!

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