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The Manufacturing of Specialty Coffee

Roasters Rock

Categories: 2015, FebruaryTags: , , , , , , , , , , , , , , , Author:

After trav­el­ling to ori­gin you will return home with a new per­spec­tive on the indus­try. What you think you know will likely be chal­lenged. Many of us only have roman­tic notions about what life is like and the dif­fer­ence we can make in the lives of pro­duc­ers. The pro­duc­ers get a dif­fer­ent per­spec­tive about us as well. We can all learn from real interaction.

We say things like “If the farmer will just pick the red ripe cher­ries he will be able to sell his cof­fee for so much more”. At the same time pro­duc­ers think that roast­ers are just rolling in money because they mark up the prod­uct so much. Both ends of the sup­ply chain tend to demo­nize the exporters or other ‘mid­dle­men’ for steal­ing all the prof­its and tak­ing advan­tage of grower and roaster alike.

A deeper real­ity has to be appre­ci­ated by all in the sup­ply chain. Many myths are just that; things said often enough that they must be true. Let’s see if we can test con­ven­tional wis­dom and start to acknowl­edge that all mem­bers in the cof­fee chain from farmer to barista must work together to man­u­fac­ture this thing we call spe­cialty cof­fee. Value is added at every level. By the same token, value can be taken away at every level.

Myth 1: If the farmer will just pick the red ripe cher­ries he can ask for a pre­mium for his cof­fee.
If this were true, farm­ers would just pick the red ripe cher­ries! Why then would they forego this finan­cial wind­fall and keep doing it the ‘wrong’ way? Because in order to pick just the red cher­ries, they need to be able to pay their work­ers, and have some­one actu­ally agree to pay them more. Often the farmer is sev­eral peo­ple removed from those that would reward qual­ity. The chain does not always have a way to reward qual­ity. Small hold­ers in Sumatra, for instance sell their cher­ries or pulped cof­fee to inter­me­di­aries and they are resold as many as five times on their way to mar­ket. To change the imbed­ded sys­tem will be dif­fi­cult. It would require the exporter to rework the sys­tem and move pro­cess­ing patios out closer to the grow­ing areas, or would require the small­holder to put in wash­ing sta­tions and dry­ing patios on the farm. Just pick­ing the red cher­ries sounds easy, but if you can’t ‘man­u­fac­ture’ the pulped cof­fee into some­thing that is worth more, it will lose its value and the extra effort will be wasted.

Myth 2: Middlemen just take advan­tage of the farmer and should be bypassed.
Using our exam­ple of the Sumatra farmer above, the mid­dle­men are the only way to get the farm­ers cof­fee to mar­ket. They own the trucks and have estab­lished a chain of ven­dors that will move the cof­fee the 100+ miles from the farm to the export com­pany. The small holder oth­er­wise would need to take the days har­vest every day on his own to sell it. He would use more in gas than he would make on the cof­fee.
There are sto­ries of cor­rupt ‘coy­otes’ that take advan­tage of the farm­ers, but with­out them the farm­ers would have no mar­ket at all. These mid­dle­men also add a ser­vice of pre-drying the cof­fee so it won’t fer­ment on the way to the export com­pany. The export com­pany buys the parch­ment cof­fee and man­u­fac­tures it into a fin­ished green prod­uct that can be exported.

As long as this deliv­ery sys­tem is in place, it would be impos­si­ble to reward the farmer for just pick­ing the red ripe cher­ries. A new deliv­ery sys­tem must exist to bring man­u­fac­tur­ing closer to the farmer.

If the exporters did build dry­ing patios and pro­cess­ing plants out in the grow­ing areas, they would be abler to buy directly from the farmer, reward them, and cre­ate high qual­ity, trace­able lots. The expense to do this means adding many dif­fer­ent oper­a­tional units around the grow­ing area and repli­cat­ing their pro­cess­ing plant sev­eral times. Until there is a good busi­ness model to do this the exporter will not take the finan­cial risk.

Myth 3: Roasters and retail­ers add exor­bi­tant mar­gin and the farmer deserves a piece of it.
This would be true if rent, health­care, salaries, mar­ket­ing and other oper­at­ing expenses did not exist, but they do! Also, to state the obvi­ous to any­one that has run a busi­ness, bills are paid with mar­gin dol­lars, not mar­gin per­cent­ages. While the markup in cof­fee may be high, a cup of cof­fee is still just a cou­ple of dol­lars and you have to sell A LOT of cups to pay the expenses. Although it is pos­si­ble to make a liv­ing, there are not a lot of inde­pen­dent cof­fee­house own­ers liv­ing in man­sions. Almost no shop could sur­vive sell­ing cof­fee alone. There needs to be other food prod­ucts and hard­ware items to cre­ate enough rev­enue to pay all the bills.

Wise retail­ers have fig­ured out that if they can do a por­tion of their busi­ness as a high-end, hand crafted offer­ing like pour over, or roasted-onsite cof­fee they can charge a nice qual­ity pre­mium. They in turn can then pay more for a higher qual­ity bean.

The sup­ply chain real­ity there­fore looks like this:

Retailers man­u­fac­ture value through hand­craft­ing, but need high qual­ity green beans to start with.

Exporters or mills man­u­fac­ture value through labor-intensive patio dry­ing and defect sort­ing. They still need high qual­ity cher­ries in order to get cup quality.

Growers just pick red, ripe cher­ries and find a part­ner that will reward the effort. If the part­ner does not exist, then he will con­tinue to just strip-pick what­ever cher­ries are there. He can choose to man­u­fac­ture qual­ity or not.

The good news for the indus­try is this: There is a grow­ing mass of ‘third wave’ shops requir­ing the highest-end cof­fee and the sup­ply of that cof­fee is lim­ited. This increases demand and price. That dri­ves the changes nec­es­sary to man­u­fac­ture more spe­cialty cof­fee. Everyone that wants to add value can then get rewarded.

Rocky Rhodes is an 18 year cof­fee vet­eran, roaster, and Q-Grader Instructor, and his mis­sion now is to trans­form the cof­fee sup­ply chain and make sweep­ing dif­fer­ences in the lives of those that pro­duce the green cof­fee. Rocky can be reached at rocky@INTLcoffeeConsulting.com

Coffee Competitions

Categories: 2015, FebruaryTags: , , , , , , , , , , , , , , Author:

Consider cof­fee com­pe­ti­tions a one-of-a-kind oppor­tu­nity: A way to dis­tin­guish your com­pany and show­case your invest­ment in qual­ity of prod­uct and staff. Throwing your hat into the ring has pos­i­tive, real world ben­e­fits both for the inter­nal team cul­ture and the public’s perception.

The inter­nal com­pany dynamic will change
A pend­ing cof­fee cham­pi­onship is an oppor­tu­nity to take the train­ing pro­gram to new heights by giv­ing it larger pur­pose. Revamp the com­pany train­ing pro­gram by putting spe­cial empha­sis on latte art and cre­at­ing sig­na­ture bev­er­ages. These two skills are quick ways to build a sense of accom­plish­ment and team pride early on. For Dawn Shanks, vet­eran com­peti­tor and com­pe­ti­tion judge at Washington D.C.’s Peregrine Espresso, “barista com­pe­ti­tions have fueled two things inte­gral to my per­son­al­ity and val­ues: com­pet­i­tive­ness and a sense of com­mu­nity.” Having new Espresso based drinks, specif­i­cally designed by baris­tas, gives a sense of per­sonal own­er­ship to the team while cre­at­ing unique menu offer­ings. Encouraging staff to attend TNTs (Thursday night throw­downs) is a sure-fire way to develop skills. TNTs pro­vide a sense of com­mu­nity and a com­fort with pro­duc­ing under pressure.

I believe it’s impor­tant for the barista com­mu­nity to work together,” says Andrew Cash, owner of Jubala Coffee, in Durham, NC “it estab­lishes a cul­ture where we care greatly about the cus­tomer ser­vice expe­ri­ence. We are con­stantly help­ing one another with rou­tines and tast­ing one another’s drinks. I think we share com­mon goals, make great cof­fee and offer a great cus­tomer service.“

If there aren’t TNTs in you area, refer to the Barista Guild of America to start one up. Not every­one is com­pet­i­tive; judg­ing also builds crit­i­cal analy­sis skills, essen­tial for man­agers and shift leads. Beyond cof­fee com­pe­ti­tions, this type of inter­nal train­ing lays a pos­i­tive foun­da­tion that encour­ages staff engage­ment, explo­ration beyond daily shift require­ments, and con­tribut­ing orig­i­nal ideas. Dawn states that she is “moved when I see peers do great work. I think the com­pe­ti­tions are a way we all gen­tly nudge each other towards becom­ing bet­ter and better.”

It takes a team to put forth a com­peti­tor. Not every­one is com­pet­i­tive but as Andrew points out “I do want all my employ­ees to find value in their work and under­stand that their job can lead to enrich­ing careers. This increased engage­ment builds kin­ship and refreshes the com­pany spirit.

Competing takes a cer­tain per­son­al­ity, it takes a cer­tain obses­sion and these mem­bers often become your team super­stars. Support their efforts and they may become long-term employ­ees, because their pas­sion is appre­ci­ated. Furthermore, this pas­sion, once sup­ported, will over­flow to oth­ers. This year, Dawn says of her first time com­peti­tor team­mates, “Watching them become inspired was inspir­ing in and of itself.”

Knowing there are cof­fee com­pe­ti­tions instills a larger per­spec­tive in baris­tas. It is a step to under­stand­ing that a side job or a fas­ci­na­tion can evolve into a career or a passion.

Public per­cep­tion will improve
The very fact that there are com­pe­ti­tions for cof­fee is bizarre for most peo­ple unfa­mil­iar with our indus­try. To gen­er­ate dis­cus­sion with clients, think beyond the brick and mor­tar, engage through the social media out­lets; pub­li­cize all the team’s prepa­ra­tion efforts. Show the pas­sion for cof­fee at your com­pany by post­ing vine videos of brew prac­tice or cre­ate YouTube tuto­ri­als. Tweet new ideas daily and post fil­tered insta­gram images of beau­ti­ful espresso shots.

At Jubala Coffee they go an extra step, “We always live-stream the com­pe­ti­tions in the shop so cus­tomers can watch.” says Andrew.

Consider invit­ing reg­u­lars to watch mock run-throughs. This is a great way to work out the kinks in the com­peti­tors’ pre­sen­ta­tion while pro­vid­ing a unique expe­ri­ence for café clientele.

Internally, hav­ing baris­tas com­pete year-to-year helps moti­vate the rest of the team to make bet­ter cof­fee and estab­lish goals for them­selves. I’ve seen my staff grow in ways of not only mak­ing bet­ter cof­fee, but also think­ing of ways to make the cus­tomer expe­ri­ence bet­ter. To have a team-member com­pet­ing means that your com­pany is attract­ing the kinds of tal­ents who are ded­i­cated to their craft.

Consider the per­cep­tion of your com­pany beyond the local area. Demonstrate to the indus­try your high level of com­mit­ment to qual­ity and pro­fes­sion­al­ism by com­pet­ing. It’s one thing to pro­fess your qual­ity stan­dards and barista tal­ent; it’s quite another to com­pete. Investing in a com­peti­tor says to the indus­try that you, as a busi­ness owner, have an unshak­able ded­i­ca­tion to qual­ity, professionalism.

A cof­fee com­peti­tor becomes a spokesper­son for your com­pany. This becomes truer as your com­peti­tors move for­ward and earn higher rank­ings, and become more pub­li­cized and more valuable.

Competitions are a multi-year invest­ment, which starts within the café and grows to the indus­try at large. Andrew sup­ports the Jubala crew “When an employee shows desire and pas­sion within their job, it’s impor­tant to sup­port them and lead them in the direc­tion that will make them a bet­ter employee. We all want to be rec­og­nized and trusted for our hard work and sup­port­ing com­peti­tors is a great way to show them that you appre­ci­ate the value they bring to your business.”

Clark Le Compte is Head Roaster for Toby’s Estate Coffee and the South East Regional Brewers Cup Champion. He is com­pet­ing for the national title this month. Reach out with any ques­tion or wish him luck at
clarklecompte@gmail.com

The Crowd Funding Phenomena

Categories: 2015, FebruaryTags: , , , , , , , , , , , , , , Author:

It’s hard to not stum­ble across an arti­cle, Facebook post, or news story dis­cussing the lat­est crowd-funding cam­paign. Whether it’s a cool ice-chest that does it all; a new video game con­sole; or even turn­ing a tele­vi­sion char­ac­ter into a motion pic­ture, crowd-funding is a way for entre­pre­neurs, design­ers, inven­tors, and artists to get their idea or work from concept/prototype to market.

The process is quite sim­ple: you have a great idea and maybe even a pro­to­type, a plan of what you need to make it a real­ity includ­ing the finan­cial needs, and then launch an often timed (1−60 days max­i­mum) fund-raising cam­paign aimed at peo­ple who share your vision. No equity is exchanged with ven­ture cap­i­tal­ists, no costly loans or paper­work to fill out with a bank, it’s a pretty straight­for­ward con­cept to raise money for a project of almost any type. Offer reward lev­els to encour­age fund­ing that gen­er­ally include (with the higher dol­lar amounts sought) the prod­uct you’re rais­ing funds for, and if oth­ers share your idea and you’re not seek­ing an unreach­able goal, your project could be funded.  Its no-strings attached angel fund­ing, but with the expec­ta­tion that prod­ucts offered in the rewards cat­e­gory are in fact delivered.

There are a mul­ti­tude of crowd-sourced fund­ing sites world­wide, with Kickstarter and Indiegogo being two of the largest in the U.S., and new sites com­ing online as well. Some of these new sites will actu­ally con­nect investors to entre­pre­neurs where equity for cash is exchanged. But for now, this arti­cle is focused specif­i­cally on crowd fund­ing, and Kickstarter in gen­eral as one of the most pop­u­lar sites with bud­ding entrepreneurs.

As a backer of a cou­ple of projects, not to men­tion some­one who also ini­ti­ated a Kickstarter project of my own (it wasn’t suc­cess­ful), Kickstarter has cer­tainly mor­phed from peo­ple who back projects they believe in and are help­ing to come to fruition, to more of a vir­tual “pre-order” store. But wait, Kickstarter doesn’t sell items. Correct as that may be, Kickstarter has grown and so have the clien­tele who aren’t approach­ing Kickstarter for what it was orig­i­nally con­ceived for: a way for peo­ple to back projects they believe in. Whether it was the cre­ation of an album by an unknown band, to some­one who just pro­fesses to cre­ate the great­est potato salad ever, there’s a myr­iad of projects on Kickstarter as well as other crowd-funding web­sites. And the back­ers are pledg­ing money with 100% expec­ta­tion that the project will deliver in the end.

Kickstarter has grown con­sid­er­ably over the six years since its incep­tion.  To date, it has con­nected over 7 mil­lion back­ers and raised over $1billion in finan­cial pledges. Kickstarter receives 5% of the pledges from each suc­cess­ful project backed (over $50m to date), and Amazon takes another 3–5% as well for pro­cess­ing pay­ments from sup­port­ers. This is clearly a new way to con­nect the lit­tle guy with like-minded indi­vid­u­als that wish to sup­port a vari­ety of projects as a result.

But fund­ing cam­paigns on crowd-funding web­sites aren’t always suc­cess­ful. Often times cam­paigns fail to gen­er­ate the tar­get amount set by the cre­ator. A project either hits the tar­get and is funded 100% (even beyond the orig­i­nal amount spec­i­fied), or it doesn’t fund at all. That’s right, it’s an all-or-nothing deal. The sec­ond way projects aren’t always suc­cess­ful is when they do fund, but then fail to deliver for a vari­ety of rea­sons. It’s often over­am­bi­tious projects or broad inex­pe­ri­ence with the nec­es­sary process to bring a project to fruition, even after fund­ing. And what you have is a large (and usu­ally grow­ing) group of angry and vocal supporters.

Crowd fund­ing sites aren’t going away, and in fact are grow­ing sub­stan­tially every year. It has become a new busi­ness model for the rea­sons cited above, but it’s also bring­ing in more peo­ple who don’t fully under­stand that crowd fund­ing sites are nei­ther a store nor a guar­an­tee for suc­cess­ful com­ple­tion of the projects money is being raised for. And projects relat­ing to cof­fee have been increas­ing yearly, with 2014 being one of the largest years for cof­fee related projects.

These projects range from offer­ing cof­fee from farm directly to con­sumer, to rais­ing money to open cof­fee shops, as well as new ways to brew cof­fee. It’s the last cat­e­gory that has seen the most fund­ing across crowd-funded web­sites rais­ing nearly $3m USD over the past 2 years just for cof­fee related machines/brewers/grinders, with $2.4m being raised by one cof­fee com­pany alone (Bonaverde). This is how far cof­fee enthu­si­asts will go in the quest for the per­fect cup of java, fund­ing projects that are often invented by entre­pre­neurs with lit­tle to no expe­ri­ence in the cof­fee indus­try, let alone any kind of man­u­fac­tur­ing experience.

What isn’t included in that num­ber is the num­ber of other cof­fee related projects that don’t achieve fund­ing goals, projects such as start­ing a cof­fee shop (both mobile and brick-and-mortar) or some form of cof­fee prod­uct. But that isn’t to say only cof­fee brew­ers can be suc­cess­ful. One suc­cess­ful project raised $22,000 to give a vari­ety of tours (pend­ing fund­ing level) and teach cof­fee enthu­si­asts how to har­vest, grind and brew cof­fee prop­erly at a Brazilian cof­fee farm. And sup­port­ers still had to pay for their flights to Brazil (the funds were ulti­mately used to open up a café in Brazil con­nected to the farm of the same owners).

Coffee is one of the hottest cat­e­gories in which to raise crowd funded cap­i­tal, with the most suc­cess­ful projects being brew­ing related, and least suc­cess­ful being tra­di­tional brick-and-mortar shops. Do you have a cof­fee related ven­ture that needs fund­ing? Is crowd fund­ing for you? The next part of this arti­cle will focus on Bonaverde and their foray into crowd fund­ing, and where they’re at cur­rently. The final part of this arti­cle will be advice on how to run a suc­cess­ful crowd fund­ing project, and avoid anger­ing your back­ers, espe­cially finan­cial back­ers who haven’t had their coffee.

Social Media for Business

Categories: 2015, FebruaryTags: , , , , , , , , , , , , , , Author:

Social media is begin­ning to reach its poten­tial as a mar­ket­ing tool. Businesses are find­ing they can use social media chan­nels to sell their prod­ucts or ser­vices while main­tain­ing an authen­tic voice that social media is famous for. With 2015 now in full swing, we pre­dict that com­pa­nies that make the most of social media –like Twitter– to help grow their cus­tomer base will take advan­tage of these top trends this year, includ­ing bet­ter aim, inte­gra­tion, pre­dic­tive ana­lyt­ics (and a bit of good, clean fun.)

Targeting audi­ences: Instead of try­ing to reach the masses to find a hand­ful of cus­tomers, the idea is to specif­i­cally tar­get sev­eral small, tai­lored groups of peo­ple via the social media chan­nel that your busi­ness is most likely to reach them on. That way, you can reach more peo­ple who are rel­e­vant to your busi­ness and more likely to become cus­tomers. Learning about your tar­get audi­ence will help in fine-tuning the types of con­tent you will share with your fol­low­ers. Think about your ideal cus­tomer and which types of con­tent trig­ger the most engage­ment. Images and videos per­form excep­tion­ally well on social media, fol­lowed by links to inter­est­ing, infor­ma­tional blog posts. On Twitter, your com­pany can tar­get spe­cific audi­ences by using the @reply to engage cus­tomers one-on-one, or Tweet-to-Tweet, allow­ing you to tai­lor your mes­sage, send a direct response and cre­ate bet­ter grounds for estab­lished cus­tomer rela­tion­ships. Promoted Tweets (see next sec­tion) are a paid way for com­pa­nies to pro­mote their con­tent to a spe­cific audi­ence, extend­ing their reach.

Blending paid and owned con­tent: As mar­keters have per­fected their social media strate­gies, they have found that blend­ing their paid and owned media together lets them get their con­tent out to more peo­ple while keep­ing costs down and still main­tain­ing an authen­tic voice. Some good uses of paid con­tent on Twitter are devel­op­ing Promoted Tweets to drive traf­fic to a down­load­able piece of con­tent, a com­pany blog post or to increase aware­ness about a new prod­uct. One thing to avoid with Promoted Tweets is overly self-serving con­tent as it’s likely to be rejected by the very audi­ence you’re try­ing to reach. Any good mar­ket­ing cam­paign should include organic inter­ac­tion with cus­tomers and poten­tial cus­tomers as well as paid con­tent. Examples of owned con­tent include Tweets from your company’s Twitter account that shares your lat­est blog post, pro­vides an exclu­sive offer via a dig­i­tal coupon or retweets of con­tent that com­ple­ments your busi­ness. Working together, paid and owned con­tent can build engaged audi­ences who inter­act with con­tent and influ­ence their friends to do the same. Striving to find the per­fect blend of paid and owned media will be the chal­lenge in 2015.

Enlisting employ­ees to help share: Employees want to advo­cate and be the voice of your brand, but often busi­nesses are hes­i­tant because they’re fear­ful of social media. However, when employ­ees are shar­ing their company’s social media con­tent on their own chan­nels, busi­nesses cash in with a higher organic reach and engaged employ­ees who feel pas­sion­ately about the com­pany. Most busi­nesses know or can find out who their poten­tial spokes­peo­ple are – those most active on social media and who under­stand the rules of engage­ment. How should a busi­ness orga­nize this effort? Start by mak­ing sure your employ­ees feel good about your company’s val­ues and the goods or ser­vices it offers. That way, cus­tomers rec­og­nize that your employ­ees are happy, and they’ll feel good about buy­ing from you. Provide train­ing to help employ­ees iden­tify oppor­tu­ni­ties to advo­cate the com­pany brand and encour­age cus­tomers to inter­act with your com­pany on your social media pages.

Understanding cus­tomers bet­ter: Until now, cost and com­plex­ity have lim­ited small busi­nesses from ben­e­fit­ting from pre­dic­tive ana­lyt­ics and machine learn­ing. Using social media soft­ware with pre­dic­tive ana­lyt­ics can help you find Tweets that are rel­e­vant to your busi­ness. By observ­ing Tweets a busi­ness owner replies to (finds rel­e­vant) and apply­ing a vari­ety of machine learn­ing algo­rithms to those Tweets, a Twitter mar­ket­ing tool, like SocialCentiv, pre­dicts which Tweets are most likely rel­e­vant to that cus­tomer, sav­ing time and money ver­sus man­ual searches.

Laughing it up!: Social media mar­keters have found that one of the best ways to res­onate with their fol­low­ers – many of which are Millennials – is to be silly and give them a good laugh. Businesses can achieve this through pic­tures, videos, con­tents or even corny jokes. That being said, humor has bound­aries – make sure that jokes are within good taste, tied to the busi­ness and rel­e­vant. And be sure that you choose those peo­ple within your group who are best qual­i­fied to com­mu­ni­cate humor within those bound­aries. One such exam­ple of humor done well is BarkBox’s humor­ous Pawliday contest.

On social media, like Twitter, is not just about gain­ing more fol­low­ers, but engag­ing those most rel­e­vant cus­tomers and poten­tial cus­tomers. Capitalizing on these top five trends early on, and con­tin­u­ing to use them through­out the year, can make a huge dif­fer­ence in tak­ing your social media mar­ket­ing – and your cus­tomer engage­ment – to the next level.

Bernard Perrine is CEO and cofounder of social mar­ket­ing appli­ca­tion SocialCentiv, patented soft­ware tech­nol­ogy that helps busi­nesses find new cus­tomers on Twitter. You can reach him at bernard@socialcentiv.com.

Your Reputation is On the Line

Categories: 2015, FebruaryTags: , , , , , , , , , , , , , , Author:

Let’s face it: as a retail cof­fee shop busi­ness man­ager, every time a cus­tomer leaves the venue, you won­der if they enjoyed their expe­ri­ence and you won­der what they will tell oth­ers. You are not alone, because you prob­a­bly already know that most cus­tomers – 72 per­cent of them – trust online reviews to be cor­rect. Good reviews can make or break your busi­ness, with­out your knowl­edge of the reviews. Don’t just leave it up to chance; be proac­tive if you want to pro­tect the online rep­u­ta­tion for your busi­ness. With that said, here are a few tips for avoid­ing bad online reviews while also encour­ag­ing happy cus­tomers to share their expe­ri­ence with others:

1) Prepare your staff
The entire cus­tomer expe­ri­ence starts from the front of the house, as first impres­sions set the tone for the entire expe­ri­ence. Yes, it is impor­tant for your baris­tas to make a good cof­fee, but it is more impor­tant for who­ever is com­mu­ni­cat­ing directly with the cus­tomer to under­stand how that cus­tomer is enjoy­ing the expe­ri­ence. They need to be taught the signs of an unhappy cus­tomer and they need to have a for­mal­ized pol­icy for how to deal with it.

Typically, prompt action is required to replace their drink with some­thing that is suit­able. One of my favorite meth­ods is to ver­bally tell cus­tomers if they have a prob­lem to “come to me” and I will take care of it. Say this before the first sip. As a man­ager, one of your most impor­tant invest­ments is train­ing and reward­ing your employ­ees. Train them well and you will have a well-oiled cus­tomer pleas­ing machine, and pos­i­tive online reviews to show for it.

2) You have to give a lit­tle to get a lit­tle
Coffee shop ser­vice is very hec­tic, and issues will arise from time to time. As men­tioned before, invest­ing in team train­ing can help avoid this, but it is not fool­proof. Hopefully you have told cus­tomers to come to you with any issues. If not, they might directly tell you that they are unsat­is­fied or show it through their body lan­guage. Deal with this imme­di­ately by apol­o­giz­ing, but main­tain­ing the con­fi­dence in your prod­uct or ser­vice by offer­ing them a replace­ment drink or food item.

Don’t worry about the small cost, think more about the life­time value of a cus­tomer – one that may shop with you reg­u­larly or tell oth­ers about your busi­ness. A happy one will buy many more drinks and refer many more peo­ple your way; that is how you build a cus­tomer base.

3) Make it easy for happy cus­tomers to review
The key­word is “happy”. I see many cof­fee shops read­ily broad­cast­ing to cus­tomers that they are on Yelp, Tripadvisor, etc. But you are broad­cast­ing this idea to both your happy cus­tomers and unhappy cus­tomers. While a really per­sis­tent unhappy cus­tomer will still find you online and leave a bad review, you don’t want to give them the idea in the first place. The goal is to list that you are on these web­sites in a few places, but do not overly broad­cast it.

Secondly, train your staff or social media man­ager (for online inter­ac­tions) on how to iden­tify happy cus­tomers. For instance, these are likely your reg­u­lars. If you kindly ask them if they would leave an online review for you, many of them will. It helps to add an incen­tive, but many times all you have to do is ask.

4) Gather feed­back from each and every cus­tomer
The process of gath­er­ing and under­stand­ing cus­tomer feed­back is crit­i­cal to your busi­ness. Many cof­fee shops do this through com­ment cards or direct one-on-one inter­ac­tions with the com­pany. I’m per­son­ally so pas­sion­ate about this sub­ject that a few friends and I started a com­pany called SpotSurvey, which has the sole mis­sion of sim­pli­fy­ing on-the-spot cus­tomer feed­back, while help­ing build cus­tomer com­mu­ni­ca­tion and pre­vent­ing bad reviews.

Too many busi­nesses fail from either bad feed­back col­lec­tion or the fail­ure to take action on the feed­back pro­vided. The best forms of feed­back for a retail store are any­thing you can get on-the-spot that’s anony­mous. Remember, you do not want all the feed­back going online, unless it is pos­i­tive. If there are bad expe­ri­ences being had by cus­tomers, you will want that anony­mous feed­back directly from them so you can take the nec­es­sary steps men­tioned in step 2 to make them happy. You are not hid­ing bad expe­ri­ences, you are tak­ing action on resolv­ing them in a man­age­able and respon­si­ble way, before it spreads all over the inter­net and you are for­ever labeled and judged. I have seen many great busi­nesses fail from not man­ag­ing their online rep­u­ta­tion and cus­tomer rela­tion­ships effectively.

5) Take action while being trans­par­ent and gen­uine in your efforts
As I men­tioned before, you can never run a per­fect busi­ness. You can’t please every cus­tomer, but most neg­a­tive expe­ri­ences are eas­ily cor­rected if addressed imme­di­ately in a trans­par­ent and gen­uine way. In fact, how you respond to a neg­a­tive expe­ri­ence is an oppor­tu­nity to shine and win an evan­ge­list for your busi­ness. Most cus­tomers (85% of them) don’t want to talk bad about your busi­ness; they just want to be lis­tened to and under­stood. This is why it’s impor­tant to take every oppor­tu­nity you can to lis­ten to your cus­tomers and to take action right away. This response is even more trans­par­ent online, so don’t be afraid to respond to neg­a­tive tweets or Facebook page com­ments about your busi­ness online in a non-combative way. Many more cus­tomers will see your gen­uine approach and respect your busi­ness because of it.

So there you have it: the world of online reviews is actu­ally a great thing for your busi­ness as long as you can man­age it in a respon­si­ble way. Plan ahead, be obser­vant, and take action right away to keep the cus­tomer expe­ri­ence great. Get the feed­back you need to make your busi­ness suc­cess­ful. The absolute worst thing you can do is bury your head in the sand at the sight of bad online reviews. My per­sonal motto is: “It’s not just about how many cus­tomers you can get, but rather how many you keep.”

Coffee Service Corner

Categories: 2015, FebruaryTags: , , , , , , , , , , , , , , Author:

TIMES-PICAYUNEThe cof­fee and food ser­vice indus­tries as well as the City of New Orleans, fam­ily, and so many friends and asso­ciates have lost a leg­end.
On Monday, January 5, 2015, the night before Twelfth Night, which is the offi­cial start of Carnival, Boatner Reily passed away. Friends at the New Orleans Time Picayune were kind enough to share this image of Mr. Reily, resplen­dent in his Mardi Gras tux, which truly cap­tures his spirit. For decades he was involved in Mardi Gras, even pre­sid­ing as Rex, King of Carnival in 1982.

Boatner, as he was known through­out his life, was a third gen­er­a­tion leader and chair­man of Reily Foods, a well-respected and suc­cess­ful food ser­vice dis­tri­b­u­tion com­pany, cof­fee roaster and tea blender, which includes the pop­u­lar Luzianne Tea brand.

I had the plea­sure of work­ing for Mr. Reily on two occa­sions span­ning a period of 15 years at Standard Coffee Service Company. And before join­ing the com­pany, I ran a dis­tri­b­u­tion busi­ness that served them.

While there are many pub­li­ca­tions now reflect­ing and report­ing on his busi­ness acu­men, phil­an­thropy and civic lead­er­ship, my mem­o­ries of Boatner Reily are the many qual­i­ties that defined him as a man and leader. He was a bril­liant, prompt and thor­ough com­mu­ni­ca­tor, never fail­ing to con­vey and lead from a posi­tion of strength but at the same time dis­play­ing appro­pri­ate mea­sures of sup­port and kind-spiritedness.

While we only engaged no more than a half dozen times per quar­ter, every encounter was mem­o­rable. I recall one event in par­tic­u­lar. After I had stepped a bit past my area of respon­si­bil­ity and usurped nego­ti­a­tions with a Reily Food’s com­mod­ity sup­plier, (which ulti­mately resulted in a cost reduc­tion for my divi­sion), Mr. Reily mate­ri­al­ized in my office. He had noticed the reduc­tion in cost of goods to my divi­sion on the prod­ucts in ques­tion. While he had not made a total rush to judg­ment, he most likely sus­pected that I sim­ply ham­mered some­one at Reily Foods for the lower cost. I explained how I achieved the reduc­tion. He real­ized that the end result ben­e­fit­ted both divi­sions. He then stood up and shook my hand while firmly declar­ing, “Masterfully done!”

Standard Coffee Service was sold by the Reily’s in 2012. While per­son­ally dis­ap­pointed with pend­ing change, I under­stood the ratio­nale. Ultimately, hav­ing DS Services incor­po­rate Coffee Service into their much larger Water Service route foot­print has proven to be a log­i­cal fit. Reily Foods is now enhanc­ing focus on their core competencies.

Reily Foods con­tin­ues to be a great sup­plier to our new busi­ness. I am pleased to have main­tained con­tact with old friends at Reily Foods, espe­cially William B. Reily IV (Bo as we know him).

As we look now at Reily Foods, the Reily fam­ily and the leg­end of Boatner Reily, these words come to mind……
Masterfully done!

Remembering Garth Smith

Categories: 2015, FebruaryTags: , , , , , , , , , , , , , , Author:

Garth SmithGarth William Smith of Vancouver, Washington left his fam­ily and friends to a new life in heaven on January 11, 2015 at the age of 68 after a bat­tle with can­cer. For all who knew Garth, we believe that God is now enjoy­ing a great cup of organic coffee.

Garth was born December 30, 1946 in Hillsboro, OR. He was the son of Hubert and LaVerna Smith of Mountaindale, OR. He is pre­ceded in death by his mother, father, and brother, Earl Smith, and nephew Steven Smith. He is sur­vived by his wife Gay, daugh­ter Dawnell and son-in-law Jeff Linstead, daugh­ter Misty and son-in-law Byron Myers. He is also sur­vived by his grand­chil­dren, Kristopher Munizich, Sean Lemmon and Rebecca Myers, as well as his niece Karen Lowes, nephew David Smith, and cousin Sharon McMahon.

Garth worked for many years in the log­ging indus­try but made a life change in 1985 when he went to work for a Portland coffee-roasting com­pany. At Coffee Bean International, Garth found his life’s pas­sion, cof­fee, as well as his other pas­sion, his wife Gay. In 1990, the vision­ary founded his own organic coffee-import com­pany, Organic Products Trading Company (OPTCO). Though organic cof­fee was not read­ily avail­able for sale in stores, Garth worked for the next 22 years to develop organic cof­fee projects around the world, help­ing small cof­fee pro­duc­ers through train­ing in improved cul­ti­va­tion and cof­fee pro­cess­ing. He and his wife founded the Café Femenino Foundation, along with a women’s cof­fee pro­gram in 2004. His work with the Café Femenino Foundation and the women cof­fee pro­duc­ers went even fur­ther in his mis­sion to help cof­fee fam­i­lies by help­ing women achieve their rights and to change cul­tural value sys­tems and reduce the abuse of women. Garth and his wife sold their com­pany in 2010 and retired in 2012. He will be remem­bered for his trail­blaz­ing work and for the sig­nif­i­cant con­tri­bu­tion he made to all of the lives of thou­sands of cof­fee fam­i­lies around the world that he helped, as well as cof­fee drinkers who now enjoy the great organic cof­fees he devel­oped and brought to market.

Publisher’s Prologue

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

Welcome to CoffeeTalk’s 2015 State of the Industry. This year we changed things up a bit by ask­ing our indus­try experts to iden­tify poten­tial threats and vul­ner­a­bil­i­ties our indus­try faces in the com­ing months and years. The answers were diverse and thought-provoking. As busy as we all are this time of year, I encour­age each of you to read these provoca­tive arti­cles. Do you agree? Disagree?  Is your com­pany in dan­ger? Information is power and the one thing I do not under­stand is when peo­ple refuse to take the time to look up and around and do a bit of research. How are we to ever improve and grow with­out stop­ping to take a moment and real­iz­ing no prob­lem is unique? Working together, shar­ing ideas, and read­ing indus­try trade jour­nals, these are the solu­tions we all need to over­come the vast amount of threats iden­ti­fied in these pages.

I hope to entice you into these pages with my favorite quotes. However there was one arti­cle that stood out and I found myself adding sev­eral quotes… Thanks Tim Castle for your insights on page 44.

Where Are We Now? Preserving Specialty Coffee
Timothy J. Castle, Castle & Company, Castle Communications page 44
Coffee has been iden­ti­fied as a poten­tial eco­nomic life­line for mil­lions of peo­ple around the world.

As an indus­try, those of us who are in the busi­ness of sell­ing spe­cialty cof­fee need to start prepar­ing our cus­tomers for much higher prices that could present them­selves as early as the end of 2015.

The risk of alter­na­tive pro­duc­tion is one thing, but the risk of no pro­duc­tion at all due to farm­ers decid­ing to cash out of their prop­er­ties is another con­cern of gov­ern­ment officials.

As an indus­try, we need to ensure that cof­fee farm­ers con­tinue to be moti­vated and have the tools to stay the course and remain focused on pro­duc­ing bet­ter cof­fee for cof­fee drinkers.

Coffee drinkers, and the spe­cialty cof­fee indus­try, will be much bet­ter off when they come to under­stand that there is no one “best” cof­fee but an increas­ingly bet­ter vari­ety of excit­ing cof­fees from all over the world.

The rest are in page order…

4 Ways Mobile Can Future-Proof Your Coffee Business
Rob Bethge, Perka, a First Data Company on page 16
It’s an age-old prob­lem: how do you tempt the AM-coffee crowd back for lunch or snacks?

Coöperative Programs, Facing Challenges Together with Research and Innovation
Luis F. Samper, Colombia Coffee Federation page 18
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. …  The les­son is clear: united we can do more. … 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.

Gender Equity in Coffee, Challenges and Opportunities
Susan Cote, Coffee Quality Institute Gender Initiative page 20
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.

Consistency in a Growing Industry
Tyler Bruno, Curtis page 22
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. 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. Third-wave baris­tas are often times referred to as arti­sans, and artistry by its nature does not value consistency.

August Afternoon Seeks Cool Operators
Mike Purcell, Follett Corporation on page 24
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.

Go Grateful, For Employees and Customers
Judith W. Umlas, International Institute for Learning, Inc. page 26
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. The Society for Human Resource Management (SHRM) said in an employee reten­tion study that the num­ber one rea­son peo­ple leave is lack of appreciation.

Branding for the Future
Linda Smithers, Daterra Coffee page 28
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?

Resilient Together
Rick Peyser, Lutheran World Relief page 30
…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
Jim Townley, Fresh Cup Roastery Café page 32
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. 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.

Office Coffee Service in Transition
Dan Ragan, Pod Pack Int’l page 34
Approximately two years ago United Stationers, the largest whole­saler to the office prod­uct indus­try, stated: “Own the cof­fee, own the break room (para­phrased)…”
Approximately 20% of an office’s expense is break room, and 80% includes remain­ing con­sum­ables.
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.
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 want Office Coffee Service is in tran­si­tion; take advan­tage of the opportunities!

Keeping up with Industry Demands, A One-Way Street
Alma Likic, Plitek page 36
As cof­fee indus­try demands and con­sumer pref­er­ences are chang­ing, all of the indus­try play­ers are shift­ing along.

Tea Sales on the Rise, Infusing Your Business,
Stefanie Makagon, Garden to Cup Organics page 38
One thing is cer­tain: the chal­lenge is not in find­ing infor­ma­tion, but in con­vert­ing an over­load of infor­ma­tion into use­ful strat­egy and stay­ing cur­rent in an indus­try where growth and change seem to be occur­ring at warp speed!…. cof­fee roast­ers, nat­ural health indus­tries, and food ser­vice indus­tries are also posi­tioned to profit from tea’s rise in popularity…

Is our cur­rent sys­tem sus­tain­able? Addressing Vulnerabilities to Our Industry,
Marty G. Curtis, Just Quantify Coffee Academy page 40
I believe the farmer will not real­ize the gain until we actu­ally have pro­grams for the farmer on truly eval­u­at­ing their cof­fee from seed to cup. This gives farm­ers tools so they can truly eval­u­ate the cof­fee on their farms.

Meeting the Challenges Ahead, New Jumps From Solid Ground
Bill Murray, National Coffee Association page 42
Ever bet­ter, younger gen­er­a­tions of cof­fee drinkers have embraced cof­fee and café cul­ture as never before, bod­ing well for the future. Caffeine has been under greater scrutiny in 2014, with energy drinks and pow­dered caf­feine cre­at­ing new behav­iors in con­sumers and trip­ping the government’s radar.

Customization in Coffee Industry Fosters Need for Short-Run Label Printing
Amber Jechort, Primera Technology page 46
Mass cus­tomiza­tion has been a key dri­ver in one of the largest bursts of inno­va­tion in the dig­i­tal age.
Beverage con­sumers are notably promis­cu­ous and will­ing to try new tastes and sensations.

The Graying of Coffee Farmers, Demographic and Societal Changes
Paul Kurtz, Hemisphere Coffee Roasters page 48
Hundreds of farm­ers, who for many years have not seen a profit, strug­gle to stay afloat. They lit­er­ally “owe their soul to the com­pany store.”
Buying cof­fee as inex­pen­sively as pos­si­ble is not com­pat­i­ble with the desire for qual­ity cof­fee, where farm­ers must be rewarded for their hard work. If there is no value or incen­tive added for labor, why con­tinue to add it?

Devastating Emily, Combating Coffee’s Deadliest Enemy
Donald Schoenholt, Gillies Coffee Company page 50
Bill Fishbein noted “There is no doubt that cli­mate change is play­ing a role, but so is a lack of organic farm­ing knowl­edge. This has led to resource-depleted soil and a gene pool lack­ing diver­sity which has exposed coffee’s jugu­lar vein to La Roya’s sharp edges.”
According to the USAID, as reported by Reuters, “The blight is jeop­ar­diz­ing the liveli­hood and food secu­rity of about 500,000 peo­ple who make their liv­ing in the cof­fee indus­try, espe­cially small farm­ers and sea­sonal workers.”

The Danger of Hype Over Quality
Rocky Rhodes, International Coffee Consulting Group page 52
This will be the chal­lenge for 2015: Creating a final prod­uct scor­ing sys­tem, devel­op­ing con­sumer aware­ness that a sub­jec­tive scor­ing sys­tem exists, and find­ing a way for con­sumers to access the new system.

Brewing Up the Bottom Line
José Estorino, Javatino page 54
For restau­rants, using cof­fee as a tool can enhance cus­tomers’ over­all expe­ri­ence and pro­vide a com­pet­i­tive advan­tage.
A sim­ple card high­light­ing spe­cialty cof­fee offer­ings com­ple­mented by a dessert menu will increase the total check amount.

The Indian Coffee Industry, Challenges and Prospects
Jawaid Akhtar, India Coffee Board page 56
The lack of active grow­ers’ col­lec­tives / pro­ducer orga­ni­za­tions in the Indian cof­fee sec­tor places lim­i­ta­tions on the reach and effec­tive­ness of exten­sion ser­vices and tech­no­log­i­cal innovations.

Three Vulnerabilities
David Gross, Add A Scoop page 58
You will have to find your strength in dif­fer­en­ti­at­ing your con­cept by cater­ing to the health and well­ness sec­tor of con­sumer demand; to do some­thing the majors are not doing.
Another vul­ner­a­bil­ity to be aware of, and this is a must: You must pay atten­tion to social media. Your restau­rant, whether you want it online or not, will be sub­ject to crowd-sourced reviews on busi­ness rat­ings and reviews sites, the most pop­u­lar of which is Yelp. If you don’t actively mon­i­tor your restaurant’s online reviews…

Tiny, Little Steps
Bill Fishbein & Jake Fishbein, The Coffee Trust page 60
There is no such thing as Sustainability. And if there ever was, it died when it was labeled as such. Labels are toxic. They imply that they are absolute, com­plete, and con­tain all the answers. And herein lies the prob­lem. For once we believe we have all the answers, we stop ask­ing the ques­tions. And yet, it is within our ques­tions that we can find the next tiny, lit­tle step.

Riding the Waves of Coffee Equality
Don Holly, Industry Veteran page 62
The 4th wave has been defined as the prac­ticed inter­de­pen­dence of the sup­ply chain, with bal­anced shar­ing of risk and value from ori­gin through con­sump­tion. It is an opti­mistic vision of the evo­lu­tion of our indus­try, and we can only hope that it is not too late to ensure a sus­tain­able future for our beloved prod­uct.
[K-Cup] has affected and will prob­a­bly per­ma­nently alter the struc­ture of how cof­fee is sold and con­sumed here in the United States.

The Industrial Internet of Things, The Rise of The Mechs
Miles Small, CafeComm, Inc. page 64
In today’s rapidly advanc­ing tech world, today’s billion-dollar super­giant is tomorrow’s liq­ui­da­tion auction.

Ignoring cli­mate change and refor­esta­tion: an unsus­tain­able effort
Etienne Desmarais, Ecotierra page 66
Sustainable growth is clearly a hot topic in the indus­try. However, we need to take things step by step. While the envi­ron­men­tal impact of single-serve prod­ucts can­not be over­looked, we must first address the issue of mak­ing cof­fee farm­ing a sus­tain­able endeavor…

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

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