Bean Thinking™ Online
The Heritage Coffee Companies Newsletter
(complete set of 2001
editions below)
Volume 8, Issue 4
Kevin Daw, Editor
Fourth Quarter 2001
The American Spirit
by Kevin Daw
Sad
the spirit casts
around for rhyme or reason
empty lies the net…
Our heartfelt condolences go
to all who were directly affected by the events of September 11th.
Each of us has been touched
in some way by the attacks and yet, in the wake of these atrocities, the
American spirit has achieved new heights of courage, love and patriotism—blessings
arising from the ruins.
Living in Interesting Times
by Brian Martell
The Chinese have a curious insult,
which roughly translates to “may you live in interesting times.” Beyond
the understatement of this subtle scorn lies an irony that is not lost on most
people today. We indeed live in interesting times, as North Americans, and as
members of the coffee industry.
The economic Magi have been
foretelling a downturn for months; we are at war with a non-negotiable enemy
who, for the first time since Confederation, has shown its capacity to strike
on our territory, and the coffee market in New York is trading on the low end.
In reference to the New York “C” market, it should be noted that while
contract prices are low, differentials (the premium paid for good quality
coffee) are at an all-time high and the American exchange rate isn’t far
from its former peak.
The uncertainty of the future, as any
financial analyst will tell you, breeds bears, not bulls. The collapse of
notable high-tech stocks earlier this year coupled with the demise of the
travel and tourism industry (in large part due to the events of September
11th) have made parts of two traditional markets for coffee tight (OCS/Vending
and foodservice).
Markets like Ottawa, which went from
public sector dominance to high-tech, have seen dramatic reductions in office
coffee consumption. To add insult to injury, Ottawa’s city council recently
enacted a smoking ban in all “public places,” meaning that bars,
restaurants, etc. can no longer offer their patrons the option of a smoking
section. According to one foodservice coffee provider in the Ottawa market,
sales are down 20% without the loss of one single customer.
But interesting times do not always
translate into a curse. For the enterprising entrepreneur, they can spell
opportunities that heretofore were unavailable. While it’s true there may be
a shift in the way and where people are consuming coffee, it doesn’t mean
they will stop drinking it altogether. No one ever cuts coffee out of their
rituals for economic reasons; even the beggar on the street solicits change
for coffee. So how do we in the OCS/vending/foodservice industry capitalize on
this tectonic market shift?
To start with, a good examination of
our own companies’ capacities, strengths, and adaptabilities would make a
good launching point for any strategic planning. Next comes the harder part,
which metaphorically, can be stated as “fish where the fish are.” In every
market across our continent, emerging customers and their profiles may be
different. It’s up to us to determine who they are, and creatively implement
through our adaptability the structure to reach these new customers
Of course we shouldn’t neglect the
possibility that our existing clients may provide new opportunities as well.
It may also mean that companies that were strictly OCS may expand into
foodservice and vice-versa. From an operations point of view, companies may be
more inclined to adopt the management school of “super-efficiency” (the
integration of processes across departments and vertically with suppliers and
customers) to reduce operating costs. As the stats from the CAC (Coffee
Association of Canada) indicate, the market for coffee in Canada hasn’t
declined; if anything it’s still growing.
The task at hand is to remain
flexible enough to twist and turn with the market.
Liquid Coffee Concentrate Q&A
Kevin Daw recently received a
call from a client who was researching the feasibility of adding liquid coffee
concentrate to his product line.
Our customer had already
spoken to Stu Kaner at Coffee Inns about the equipment needed and, knowing
that Heritage has spent two years developing and improving its own liquid
brands, he felt we could give him solid answers to his questions. As he said,
“This is a big step for me to introduce this stuff.”
We reproduce this “Question
& Answer” conversation for you here, in case you have been wondering
yourself how to incorporate liquid coffee into your business.
CLIENT: “I
tried liquid coffee a couple of years ago and it didn’t seem quite as good.
What has changed?”
KEVIN: “During the process
of making shelf stable liquid coffee, the least bit of contact with the
atmosphere can affect the final product. If bacteria are introduced during the
processing, the quality of the product can erode. Great improvements have been
made in the processing of coffee beans to coffee liquid.”
CLIENT: “So
how does it compare to fresh brew?”
KEVIN: “We’d put it in
the middle area of fresh brew quality levels, right around national brand type
profiles—above a few unmentionables but below the highest quality stuff. The
aroma has improved and it is much smoother than fresh brew blends that contain
a high percentage of robusta beans.”
CLIENT: “Who
do I target with this product?”
KEVIN: “Anywhere labor
could be saved, or where convenience is of high value— hotel lobbies,
nursing homes, C-stores and single cup locations looking to save money while
at the same time offering the convenience of cup by cup delivery…just to
name a few.”
CLIENT: “What
about offices?”
KEVIN: “Absolutely! The
office arena has never been targeted because the costs of equipment and
product have not been previously attractive, nor was the quality up to office
standards in past years. These hurdles have now been cleared. Even frozen
concentrate is being marketed to our industry now.”
CLIENT: “How
does liquid concentrate differ from frozen?”
KEVIN: “Frozen product
needs to remain just that—frozen, requiring thawing prior to use. The timing
of the last box running dry and the new one thawing sufficiently can be tricky
in a lower volume account. Remember, too, that liquid concentrate does not
need refrigeration. The operator saves a bundle on equipment costs.”
CLIENT: “How
does your liquid concentrate compare cost-wise?”
KEVIN: “Operator cost is
roughly one penny per finished ounce. You can be ‘on the street’ at
approximately ten cents per five ounce serving. In low volume accounts, you
might add a small equipment rental to this figure. You’ll be above open brew
prices, but well below some existing single cup options.”
CLIENT: “How
do I demo the program?”
KEVIN: “Well, I know the new Coffee Inns unit
functions as both a pour-over and an automatic, so it can be easily set up for
a trial run. The uniqueness of the product makes it easier to convince the end
user to allow a demonstration.”
Behavioural Science à la Foodservice
by Brian Martell
Psychology is a soft
science, difficult to gauge, and harder again to consistently apply. Business
people look to a segment of psychology known as behavioural science to
understand the customer-supplier experience. The following is an attempt to
translate behavioural science research into a practical application for the
foodservice business.
Richard B. Chase, the Justin
Dart Professor of Operations Management at USC’s Marshall School of Business
and Associate Professor Sriram Dasu identify five principles of behavioural
science applicable to customer-supplier encounters. Bearing in mind that the
outcome determines how the supplier is perceived, the ability to orchestrate
the encounter for a customer-positive experience can impact repeat business
and reputation.
Principle # 1
End on an Upswing
While it’s important to
offer a pleasant experience throughout the encounter, it pays big dividends to
end on a stellar note. The inverse to this principle also applies; end on a
sour note and that is what will be etched in your customers’ minds. I admit
to being particularly fond of this principle as it is near and dear to my
heart. You see, as a coffee man, I know most meals finish with a good cup of
coffee (or they ought to).
Herein lies our contribution
to foodservice behavioural science—end the meal with an outstanding cup of
coffee. If the rest of the dining experience was adequate, chances are you’ll
have a customer for life (no hyperbole intended). Food service, even in a
cafeteria or vending setting, should be considered an event or entertainment.
As such, remember that any impresario will tell you to save the Grand Finale
for last.
Principle
# 2
Get the Bad Experiences Out of the Way Early
Sometimes unpleasantness
cannot be avoided. Your shipment of “today’s lunch special” won’t
arrive before 3:00 PM, or critical equipment quits just before the rush. While
yelling at your supplier might feel good, it won’t change the fact that you
will have some unhappy customers. Letting the customer know up front about any
menu shortcomings before they have a chance to order will remove the stigma of
letting the client make a wrong choice. The research shows that getting the
negatives out of the way first leaves customers with a better perception of
the service than if it were saved for last (like an out-of-stock dessert).
For those on the supply side
of this equation, letting a foodservice customer know in advance that there
will be short-shipped product not only gets the unpleasantness out of the way
early, it also allows your customer to make an informed decision on what to do
next.
Principle
# 3
Segment the Pleasure, Combine the Pain
People’s perception of
time is tied into how many breaks there are in an activity. Four segments of
an activity lasting five minutes each will be perceived as taking much more
time than one twenty-minute task. People perceive greater benefit when they
encounter many smaller positive experiences rather than one big positive
event.
Whether you are operating an
OCS, vending or foodservice operation, the more opportunities you have to
offer “perks” to your clientele, the better you will be perceived. Imagine
the vending route driver who has the ability to hand out the occasional snack
item while filling a machine; or in fine dining, bringing back the idea of
sherbet between courses. Both of these scenarios would have the effect of
improving your customer image.
For patrons waiting in line
at a popular restaurant, the Disney approach to this uncomfortable part of the
encounter could prove beneficial—entertain the patrons while they wait.
There was a bar/restaurant in Montreal doing a booming business, which
advertised “if you have to wait, the draft is on us.” Of course, they were
judicious in meting out the beer to those patrons of large capacity, but they
never failed to pack in the crowds. In effect, what normally was considered a
downer (waiting for a table), now became something to look forward to.
Principle
# 4
Build Commitment Through Choice
According to Professor
Chase, a study found that blood donors significantly experienced less pain
when given the choice of which arm to draw the blood. By being included in the
decision-making process, the client feels empowered and more likely to enjoy
the experience, or at least find it less painful. One fascinating application
of this principle comes from a photocopy repair company experiencing a high
volume of customer complaints about service delays. Instead of hiring new
repair staff, the company decided to allow the customer to dictate the
response time, with critical failures receiving faster service than minor
repairs. Surprisingly, there were fewer scheduling problems and the company
was able to reduce the number of its service reps. An added bonus was a lower
turnover rate in the technicians they retained. For those who service
equipment in our industry, this might prove to be a good tactic to both
improve service logistics as well as customer satisfaction.
Principle
# 5
Give People Rituals, and Stick to Them
Rituals that become part of
your calling card can become comfort food to your customers. One OCS operator
in Toronto has made it his business to deliver a carnation with every order of
coffee to his customers. A nice gesture that sets him apart, it has grown into
a ritualistic expectation from the client.
Rituals need not necessarily
be in the forms of gifts, but could also be in your presentations, your
greetings or in a myriad of other ways you appear to the outside world. They
give your customers a sense of familiarity and belonging fostering healthy
customer-supplier relationships. Once these rituals are abandoned, however, we
run the risk of having our service or product perceived as lacking, or worse,
as the cause of any failure in our performance.
It may seem far-fetched to
think that not delivering a carnation to a customer could be blamed on an
account’s equipment failure. But consider this rationale: “Oh, they cut
out the flowers with deliveries, they must be hurting financially, so much so
that they can’t maintain good equipment in the field.” In customer
relations, perception is king, even if it doesn’t match the reality.
By understanding a little
more about how our clients are affected through our transactions
psychologically, we can begin to develop relationship strategies that will
boost our customer perceptions.
Many thanks to Professor
Chase and Associate Professor Dasu who gave permission for their findings to
be presented in this article.
Selecting Media
by Jay Conrad Levinson
The following article appeared in the
October 10 issue of “The Guerrilla Marketing Online Report” an
e-newsletter edited by Mitch Meyerson, Director of the Guerrilla Marketing
Coaching Program. For additional information go to www.gmarketingcoach.com.
Reprinted with permission.
Some media are apples and others are
oranges. What works in one medium may not work in another. Guerrillas tap the
strengths of each medium to its greatest advantage. Here’s what they know
about media power.
1. The power of newspapers is news.
Marketing that is newsy gets noticed because news is on the forefront of the
readers’ minds.
2. The power of magazines is
credibility. Readers unconsciously attach to the advertiser the same
credibility that they associate with the magazine.
3. The power of radio is intimacy.
Usually radio is a one-on-one situation allowing for a close and intimate
connection between listener and marketer.
4. The power of direct mail is
urgency. Time-dated offers that might expire before the recipient can act
often motivate them to act now.
5. The power of telemarketing is
rapport. Few media allow you to establish contact in a give-and-take situation
as adroitly as the telephone.
6. The power of brochures is the
ability to give details. Few media allow you the time and space to expand on
your benefits as much as a brochure.
7. The power of classified ads is
information. Nobody in their right mind actually reads the classified ads
except for those in a quest for data.
8. The power of yellow pages is even
more information. Here, prospects get a line on the entire competitive
situation and can compare.
9. The power of television is the
ability to demonstrate. No other medium lets you show your product or service
in use along with the benefits it offers. TV is still the undisputed
heavyweight champ of marketing.
10. The power of the internet is
interactivity. You can flag people’s attention, inform them, answer their
questions and take their orders.
11. The power of signs is impulse
reactions. Signs motivate people to buy when they are in a buying mood and in
a buying arena. Signs either trigger an impulse or remind people of your other
marketing or both.
12. The power of fliers is economy.
They can be created, produced and distributed for very little cost and can
even bring about instant results.
13. The power of billboards is to
remind. They rarely do
the whole selling job but they’re great at jostling people’s memories of
your other efforts.
Volume 8, Issue 3
Kevin Daw, Editor
Third Quarter 2001
Colombian Pride Award
The Heritage Coffee Companies believe
in “putting our money where our mouth is.”
For the third year in a row, Heritage
has awarded a $1,000 cash prize for the best Colombian coffee sampled by our
cupping experts. The object of the award is to emphasize the need for Colombia
to maintain its reputation as a standard setter for world class coffee. The
$1,000 cash prize is offered as an incentive for Colombian farmers to produce
the very best coffee crop possible, for the greater benefit of the industry as
a whole.
This year’s winner was chosen from
thirteen numbered samples submitted by the Colombian Coffee Federation as
representative of the various coffee growing areas in Colombia. The coffees
were sampled in blind cup tests, using a proprietary system judging taste,
acidity, body and overall cup quality.
Stuart Daw presented Heritage Coffee’s
third annual “Colombian Pride Award” to Grupo de Amistad de Cafetero of
the San Gil municipality of Santander Department, Colombia for “Bucaramanga
Special.” The ceremony took place in April during the SCAA show in Miami
Beach.
We’d love you to try our Colombian
coffee to see what sets us apart. As always, we’ll be happy to send you
samples in any weight desired.
For samples and pricing, just give us
a call at 800-486-1198 or e-mail Kevin Daw at kevin@heritage-coffee.com.
Opportunity Update
As Southern Heritage Coffee heads
into its second year as a liquid coffee concentrate supplier, we’d like to
update you on two new developments. First, the taste and aroma profiles have
continued to improve. In fact, if it’s been over a year since you last
sampled a shelf stable liquid coffee, you could be in for a pleasant surprise.
Even more exciting is the upcoming launch by Coffee Inns of an under-$500
machine designed specifically for liquid coffee concentrate.
The Heritage Coffee Companies are
creating a special half-gallon size 33 to 1 liquid concentrate for this new
unit. We foresee lots of opportunities for operators to place these units in
locations that couldn’t qualify before now, because of cost.
A $425 machine dispenses regular
coffee and hot water, and for $550 you can offer regular, decaf and hot water.
With improving quality and ease of operation beyond existing single cup
options there is solid business to be gained using this program.
For information about the new brewing
units, call Stu Kaner at Coffee Inns: 602-438-8286. To line up a demo and/or
get a sample of our shelf stable liquid product, call Kevin at 800-486-1198.
Brewer Billboards…for Starters
We read a number of periodicals and
peripheral industry magazines to stay abreast of current and upcoming trends
that could potentially affect our industry. From Packaging Digest to Incentives
Magazine, we receive over 25 publications monthly.
While thumbing through the May issue
of Point of Purchase, I came across an article written by Paul
Schlossberg of D/FW Consulting that was pertinent for Vending and OCS
operators. D/FW Consulting (dfwconsulting@compuserve.com) helps clients
merchandise and market products in “impulse intensive” environments. Not
many sales channels are as impulsive as vending and that was precisely the
focus of his article.
I found some great points and ideas
worth sharing. In retail shopping venues, no segment enjoys the saturation
that vending locations do. The US has roughly 25,000 supermarkets, 100,000
convenient stores and over 200,000 restaurants, but vending-equipped sites are
numbered in the princely neighborhood of 2,000,000.
Mr. Schlossberg points out that most
Americans pass a vending machine daily but he questions whether vending
presently offers “an attractive and well merchandised presence at the point
of purchase.” Beyond the soda kings and giant M and M machines, probably
not. Static clings are potentially effective but you can only slap so many on
a given piece of equipment before it looks like a haphazard bulletin board
from marketing’s lower depths. Schlossberg’s article alludes to some
promising answers to this problem with technological advances such as
voice-activated teasers or the ability of consumers to pay for product using
their cell phones.
With ideas like these, the “vending
machine as sales and marketing tool” may well begin to get the recognition
it deserves. Though the article was geared toward large, name brand
manufacturers, it got my creative juices flowing and I began to consider more
localized possibilities that both vending and OCS may cash in on.
Any “branded” machine where one
product is splashed across the facing of the equipment should have a monthly
payback to you the operator, as you are essentially placing an in-office
permanent billboard for a company brand. A few hundred bucks off the purchase
price may not come close to covering the value this represents over the life
of a machine, but why stop there?
Advertising vending products for an
equipment discount is fine but why not use a vending or coffee brewer facing
as a promotional tool for a local movie theater chain or minor/major league
baseball team? Offer the space as a reward or negotiating tool for new
accounts. Using just part of the facing as a changeable ad space could prove
highly valuable. Sweepstakes could be created giving away movie tickets on
random coffee cups or snack items, or a simple, “this month’s customer
appreciation award is $5.00 off any steak dinner at Rodney’s Chop House;
just mention promo #11111.” The restaurant gains clientele and you gain
customer loyalty and satisfaction, not to mention the restaurant’s coffee
business.
For OCS operators the front of a
brewer, while smaller in available space, can present the same opportunity.
Customer appreciation coupons can be dropped by your drivers in a slot on the
side of the brewer. Beyond marketing on the brewer itself, you could have
Southern Heritage stuff propaganda into your coffee cases. In the past we have
even placed allied product samples in cases for our clients wishing to promote
new items.
Why not take advantage of this
service by creating a coupon sheet representing local merchants, with an
aggregate savings of $25.00 if all the coupons are used—effectively
eliminating the cost of a 42 count case to your customer. At the same time
those local merchants would certainly consider giving you their coffee
business in exchange for this form of free marketing. Or you could negotiate
discounts with local merchants you already use, such as quick printers, gas
stations, tire dealers, or even truck dealerships, in exchange for this coupon
drive. For Heritage private label clients, custom boxes can be made creating
four wonderful ad spaces for local merchants willing to pay 10 cents per case,
thereby lowering your case cost by 40 cents. It all “ads up” if you’ll
excuse the pun.
As an alternative you could develop a
“meet thy neighbor” program, enclosing in every case a flyer featuring the
services of different current clients each month. People love to feel a sense
of community and using your existing means of delivering this may put a bigger
smile on client faces and a big number on your bottom line.
To discuss any of these possibilities
feel free to call me at 800-486-1198 or e-mail kevin@heritage-coffee.com.
No idea shall be left unconsidered!
—Kevin
Wear Your Advertising
by Kevin Nunley
Newspaper ads too expensive? TV out
of the question? Try having customers WEAR your ads. Logos and slogans printed
on shirts, hats, even underwear is a hot trend in advertising. People in the
ad biz call them “wearables.”
The most recent figures show the use
of advertising wearables in the United States is up 25% to $12 Billion. People
in marketing and advertising complain that free hats and t-shirts are becoming
so common they don’t accept them. I don’t think the rest of us are quite
as jaded!
There is a big increase in the number
of companies that allow casual dress days. That is a great opportunity to get
your wearable message in front of lots of people in a particular industry.
Prospects are much more likely to consider and purchase business services and
products if they get your ad message while they are at work (as opposed to
when they are driving or sitting around the house).
Casual dress is the standard in the
huge and growing tech industry. Those of us who work at home are always in
casual dress mode.
Check your local yellow pages under
“advertising specialties.” It is not unusual to find a small home-based
shop producing top notch t-shirts and jackets. If there isn’t a supplier
near you, check any search engine with the terms—advertising, wearable.
Dozens of links will pop up.
Kevin Nunley provides marketing and
copy writing. Read all his free tips at http://DrNunley.com.
Reach Kevin at kevin@drnunley.com or
(801)328-9006.
Coffee Market Update
This time of year usually gives hope
to coffee growers that the threat of a Brazilian frost will cause the market
to surge, even on a hopeful rumor, but nerves appear to be steadier this time
than I have ever seen before.
To be caught short in frost season
can spell disaster for coffee buyers, but at this point we see the funds (as
opposed to commercial buyers) over 7,000 lots short, confident the oversupply
situation will hold. Speculators held fast when the first frost scare saw the
market zoom up around 5 cents a pound, only to quickly settle back again. This
is partly because the southern Brazilian areas of northern Parana and
southwest Sao Paulo, which used to be most important, have over the past few
decades become much less so, as the coffee culture migrated northward into the
regions of Minas Gerais and northern Sao Paulo. And Brazil now has a stockpile
of around 3 million 60 kilo bags of coffee on hand, with the new crop exports
on the rise. In this atmosphere, countries awaiting and hoping for a Brazilian
frost will become nervous about holding back inventories.
Coupled with this is the knowledge
that as each week passes without a frost, the likelihood of it diminishes.
Frosts of the past 30 years have all happened by July 22, so the gap between
now and then narrows. After the frost possibility passes, all we have to watch
is the possibility of a drought in the fall. Beyond that, it is quite safe to
say that we have successfully “tiptoed past the graveyard” and that,
because of continued oversupply, the market is not likely to rise.
What is the long term solution to the
woes of coffee growing countries? Without some drastic act of nature, an
efficient free market will over the years correct things through lower
production, forced upon growers through the price mechanism, wherein it is
simply not possible for some growers to compete. This process may take a long
time, so buyers might relax for now.
Volume 8, Issue 2
Kevin Daw, Editor
Second Quarter 2001
Tough Decisions for Growers
Coffee has a rather
inflexible demand curve, meaning that fluctuating retail prices have
relatively little effect on overall world demand. Thus, the problem with lower
green prices lies on the supply side. With around fifty coffee growing
countries, some with wildly fluctuating production numbers (as with Brazil),
and each wanting a higher market share oblivious of aggregate world
inventories, we arrive at the current situation of over-supply.
Coffee prices below the
actual cost of production can lead to rash decisions by farmers faced with
bankruptcy. And in a time of surplus inventory, the future in growing coffee
may seem bleak. Fertilizer, pesticides and herbicides, to say nothing of the
cost of labor, might make a grower turn to other crops in an effort to rescue
the situation.
Farmers Beware
A couple of examples—
growers in Kenya, convinced of great riches by fast talking exporters,
switched their crops from coffee (Kenya coffees enjoy a large premium already)
to flowers to be shipped to European markets. Unfortunately, once the first
harvest of the fragrant flora was ready, the same exporters decided its
quality was not good enough to bring top prices from foreign buyers. Farmers
were left to choose between taking 10% of the originally proposed selling
price or leave the blooms in the fields to perish. Many are now facing
bankruptcy.
As for ideas on driving the
market higher, several Central American countries are considering a proposal
presented by a grower and (surprise, surprise) a large roaster from the
region, that these countries discontinue the export of any green coffee and
only allow for shipping finished roasted product, thereby keeping more of the
overall markup from tree to cup. Will you soon be dialing an 011 exchange to
place your orders? Will we be relocating to Costa Rica? Stay tuned…
In another proposal up for
consideration, a few countries are working on an agreement to burn (roast?) up
to 10,000,000 bags (152 pounds per bag, folks) of coffee considered of lesser
quality in hopes of relieving the current green coffee glut.
There are at least two
problems we see with this plan:
-
Who will decide what
coffee is deemed unworthy?
-
What will our
competitors have left to buy (ha ha)?
—KD
Are you feeding the hand that is biting you?
In our last Bean Thinking
we pointed out that KGF, through their Gevalia arm, was marketing directly
to offices with a new promotional campaign. Not to leave anyone out in the
cold, they have now announced a new single cup brewer and product line for OCS
under the same Gevalia name. Talk about playing both sides!
One more of coffee's many virtues
Flying allows for some great
writing time and, since I’m sitting in seat 14C of a Southwest flight as
this is written, I’d like to share two coffee discoveries I made on a trip
to the head.
On opening the restroom
door, I noticed a “flight pack” of coffee that had been impaled on the
coat hook on the inside of the door. Assuming this was some inside joke, I
inquired of a flight attendant who told me they put coffee packs there to
absorb odors. When informed that I intended to relay this new filter pack use
to our readership, she assured me this is not official Southwest policy.
She also informed me that
coffee, when used with either brown or black natural henna hair coloring, can
greatly enhance the results. We are not condoning this use, nor do we have
proof that it actually works, but I can tell you this…that restroom sure
smelt purty.
—KD
Welcome to our new customers
Since the last issue of Bean
Thinking™ we’ve been quite busy welcoming new clients to the Heritage
family, including all the wonderful Fountain Distributors who came aboard upon
our recent acquisition of Fountain Industries’ coffee assets.
Welcome folks!
NBPA — A success gamble?
Atlantic City, birthplace of
the ECCSA trade show (now known as NBPA), was once again the host city for
this OCS-related event. The last few years saw attendance falling off because
of consolidation and a plethora of choices for operators and suppliers alike.
With fewer show options and a great effort from the operator and manufacturer
committees, this year’s show was by all accounts a large step in the right
direction.
The seminars, created by
operators for operators, were of great pertinence to attendees. Kevin Daw and
Anthony Valerio headed a free-flowing roundtable discussion on employee
evaluations covering hiring, firing, and holiday bonus issues. Everyone went
away with new ideas to try. Other sessions were equally well received and a
hat’s off to David Henchel of Corporate Coffee and his board for a job well
done. We understand that the roundtables were so successful this year that
plans are to hold even more in 2002.
At the ribbon-cutting
ceremony Kevin Daw was honored, along with Steve Hyde from Newco, as
co-chairpersons of the Manufacturer’s Advisory Council, for their efforts in
helping to reinvigorate this year’s show. Kevin and Steve wish to thank the
other board members — including Butch Winkler of Holiday House, Tammy Pearl
of Clean that Pot and Ben Ginsberg of Vending & OCS Magazine for
their efforts.
Every year the NBPA inducts
two members into its Hall of Fame. This year’s recipients were Hal and Diane
Stueber from Associated Services and Jimmy Zirakian, Jr., the youngest
inductee ever.
Our own President Stuart Daw
was recognized for “50 Golden Years Serving the Coffee & Office Beverage
Industry.” He’s looking forward to the next award ten years from now.
With a 60 percent increase
in exhibits and a 200 percent increase in attendance, we look forward to
helping make next year’s NBPA show an even greater success and we invite you
to join us.
CAMA Update
The Canadian Automatic Merchandising
Association is experiencing a renaissance as defined by industry
participation. If the turnout at the recent CAMA show indicates anything, the
vending industry as a whole is definitely in good shape. This year’s show in
Montreal featured new innovations such as:
• The CAMA bookstore, offering
industry-related publications through an arrangement with The National
Automatic Merchandising Association in the USA.
• A drawing for a Yamaha 4 x 4 ATV,
won by François Baron of Les Entreprises Caféction in Ste-Foy.
• A special arrangement with Via
Rail for a 35% discount for members traveling to the show by train.
• An early March show date,
avoiding conflicts with other shows and social activities prevalent in
mid-spring.
• And, of course, a change in venue
to the Hilton Bonaventure, which afforded exhibitors and delegates a more
intimate setting filled to near capacity in the heart of Montreal.
With over 50 exhibiting companies
occupying over 80 booths, operators left with many new ideas and business
opportunities to advance the fortunes of their companies. A number of
exhibitors claimed that this year’s CAMA show was the best in over a decade.
Socially, the well-attended President’s
Reception and Dinner included outstanding food and entertainment. Later on in
the evening, the Don Storey award was presented to Ernest Noble of La Reserve
Vittoria for his 30-year contribution to the vending industry. Wally Clark of
Clark Food Services, received an industry service award for his long and
distinguished career, as well as his earned respect from industry suppliers
and operators alike.
The educational seminars, featuring
the professional sales training firm Roger St-Hilaire ltée., were well
attended with the French session filled to capacity. Simon St-Hilaire
presented the finer points of professional interpersonal skills, along with
practical applications for our businesses. J.P. Tremblay, Vice President of
the Royal Canadian Mint, addressed the delegates on Friday, outlining the Mint’s
current activities as they pertain to our industry.
Next year’s show will be in Toronto
in mid-April at the Westin Harbour Castle. Here’s to continued success for
CAMA and the vending industry as a whole.
—BM
World's "most famous" coffeepot shuts off
So the world’s first “webcam”
is being shut down after ten years. What in the world does this have to do
with coffee, you ask?
Well, the first webcam was
installed by Cambridge University scientists to observe their coffee machine.
Seems they got tired of having to trudge down two floors for a fresh cup, only
to find the pot empty. As a remedy, they set up an intranet webcam aimed at
their coffee machine, enabling them to easily check from their office the
status of the coffee level.
As the Internet grew,
technophiles became fascinated with the ability to view anything at a remote
location via webcam, so the Cambridge coffee-watching scientists put their pot
on the world wide web. At the height of its fame, the Cambridge pot had over 2
million viewers from around the world.
Webcams have since moved on
to slightly more interesting subjects and the Cambridge folks, feeling that
theirs had served its purpose, plan to shut down their “coffeecam” in the
near future. As of this writing, you can still view the famous coffee pot at www.cl.cam.ac.uk/coffee/coffee.html.
More musings on the market
The pattern has become
familiar: every possible attempt by coffee growing countries to push the
market up has met with failure. The problem is the same old one—supply
exceeds demand. World stocks are very high and have grown again this last
month. A frost in Brazil in their coming winter (June through August) would
drive prices higher, but it might be largely psychological as the whole coffee
growing culture in Brazil has gravitated northward towards the equator, away
from the danger zone.
The differentials we now
have to pay for quality coffee are rising, as exporters of such coffee will
not sell otherwise. The “differential” is the premium over the “C”
Contract, the price quoted for “Exchange Grade” coffee on the New York
Board of Trade’s Coffee, Sugar and Cocoa Exchange, the figures one sees in
the papers.
Thus we have the irony of
higher differentials when Exchange prices are low, and lower differentials
when prices are higher. And a country that has a built-in tradition of high
quality coffee but is experiencing a current shortage of supply—as with
Kenya this year—can play a cat and mouse game, with differentials quoted
this week ranging from 70 cents to $1.00 per pound over the “C” price for
Kenya AA’s.
Some countries are
complaining they can’t afford to pay workers to pick the cherries, so a lot
of coffee may rot on the ground, causing problems of decaying trees. Further,
they can’t afford the fertilizer, pesticides and herbicides necessary to
enhance quality and production. Within a couple of years, if world production
has fallen sufficiently, prices will rise but some nations such as Vietnam
keep on boosting production to gain bigger market share.
Conclusion? For the rest of
this year, absent a Brazilian frost, the market should remain around current
levels, following the patterns we have seen this past year, little bumps
followed by immediate retractions.
—SD
Volume 8, Issue 1
Kevin Daw, Editor
First Quarter
2001
Food
for Thought
for the New Year
“If you see someone without a
smile, give them one of yours.”
—Jacqueline
Mae Rudd
“We’ve collected the most common
service complaints, and every one of them is rooted in a lack of respect for
the customer.”
—Leonard Berry, Texas
A&M Center for Retailing Studies
“It is not the employer who pays
the wages. Employers handle the money. It’s the customer who pays the wages.”
—Henry Ford
“There is only one boss,
the customer. And they can fire anybody in the company from the chairman on
down, simply by spending their money somewhere else.” —Sam
Walton
“The game of business if
very much like the game of tennis. Those who fail to learn the basics of
serving will usually lose.”
—Unknown
NBPA UPDATE
The NBPA show continues to take shape
and, as the sole remaining OCS-dedicated trade show, participation by
operators and exhibitors could hit the highest level witnessed in years.
With an excellent seminar program
built mainly on round table discussions created by operators for operators,
and with continued support for the innovative “Showbuck” buying program by
exhibitors, your presence there will definitely be rewarded. The success of
this event hinges on the participation of everyone in the OCS industry, and we
hope to see all of you in Atlantic City. Make sure to bring orders to take
advantage of the “Showbucks” program!
Heritage’s “Showbucks” special
will be to accept one $50 Showbuck on every $500 worth of coffee ordered…no
limit.
With the list of Showbuck exhibitors
including Newco, Holiday House, Sunroc, Clean that Pot and many others, your
whole trip can be paid for just by coming to Atlantic City and placing a few
orders. If you are attending, make sure your suppliers are participating in
the program so you can take full advantage of the $1,000 windfall. For more
info, call us at 1-800-486-1198 or contact NBPA at (800) 311-NBPA.
See you there!
BITING THE HAND…
A few years ago, OCS companies were
furious at Folgers after discovering Sam’s Clubs had joined with them in
creating a direct office coffee program. Well, here comes another, brought to
you by KGF, although this one is better disguised.
“Gevalia Kaffee,” which has done
a tremendous job of marketing high end coffees directly to homeowners by
giving away a free brewer on first purchases and then sending automatic
shipments thereafter, has always made us chuckle, knowing that Gevalia is a
subsidiary of KGF.
A brochure we received recently left
us in less than a chuckling mood. Gevalia has launched a new program, “Exclusively
for Small Businesses,” under which such businesses receive a free thermal
coffeemaker along with a first order of coffee. A twenty-count case of “Stockholm
Roast” (the Gevalia company originated in Sweden) sells for $19.95 and you
must order two cases at a time. Shipping and handling adds $3.95.
As part of the program, an office
keeps track of pots-per-day used and the coffee is then sent automatically in
appropriate quantities until the service is canceled. Shrewd, very shrewd.
But since you vote with your
hard-earned dollars for the coffee supplier from whom you believe it is in
your best interest to buy, you may just want to recast your vote! We are here
when you are ready — 1-(800) 486-1198.
"McLATTE"
We have to wonder if the concept of
“Specialty” as a lofty and wholly separate category from the rest of the
coffee business is being blurred when we receive news headlines such as the
following— “McDonalds trumps Starbucks with Swiss Aroma opening.” Seems
McDonalds is ready to jump on the “specialty” bandwagon with the opening
of a coffee house in Zurich, beating Starbucks first opening in this beautiful
European city. We had heard rumors of McD’s foray into high end coffee. This
could be the first small step in a much larger program. As “specialty coffee”
gains in market share, fine coffees will become more scarce and expensive. A
more sophisticated public now presents an opportunity for you in image
building. And don’t forget who has more experience in specialty coffee than
any other roaster.
LOOKING OUT FOR NUMBER ONE
Because of the recent acquisition
craze that has hit the roaster community, many labels are going the way of the
buggy whip, leaving a void in need of filling. Though there are many alternate
choices, we believe there could not be a better one than our very own “exclusive
label” or “private label” options.
Our extensive blend matching list
continues to grow as we analyze different coffee profiles, so in the event you
choose to switch roasters, we are ready with coffees your clientele will be
pleased to accept.
Our inline print and customizing
capabilities allow you to create any blend and marketing image you wish to
convey. We will work with you to fashion a program giving you total control of
your company’s destiny by building your own brand recognition. Starting at
only 10 case minimums, you won’t have to mortgage your building to get
started, either. Give us a call at 1-800-486-1198 to discuss your needs and
let us show you what sets us apart from all the others.
NAMA/NCSA
Well…what can one say? The big show
in New Orleans took industry gatherings to a whole new level, giving both
operators and exhibitors lots to see and do in the “Big Easy.” Hats off to
all those who put forth great effort to make the show a smashing success.
The OCS industry was very well
represented and we know more than one NAMA staffer was caught by surprise at
the exceptional turnout for the OCS hospitality event. (I believe we’ll have
a larger room next year.)
During the hospitality gathering,
NAMA/NCSA made a very special presentation to Stuart Daw in celebration of his
50th year in the coffee industry. I then had the privilege of presenting him
with a statue on behalf of all our employees in recognition of this feat.
Fifty years is a great deal of time spent in any industry, and to witness
Stuart’s continued passion for coffee and his quest to continue learning and
teaching everything on the subject is a great inspiration to us all. He was
very surprised and moved by all the honors, but his industry recognition was
not quite complete, as on Friday during the annual banquet, he received the
“Supplier of the Year” trophy by unanimous committee vote in what is a new
honor presented by NAMA. Stuart cited the people of Heritage as the ones
really deserving of this very special award.
Although it may be several years
before another show is held in New Orleans, we are already looking forward to
it. Next year, NAMA/NCSA returns home to Chicago. We are certain it will be
outstanding as well.
