Volume 9, Issue 3
Third Quarter 2002
Selling Coffee on Venus & Mars
by Brian Martell
Nuance is what distinguishes
coffee between cultures, the way it is brewed or consumed making the
difference. The fact remains that it is the world’s largest beverage after
water and transcends all cultures. What makes coffee so successful in its
proliferation is that it can be personified as hermaphroditic, appealing to
both masculine and feminine traits as perceived by the beholder.
Consider the feminine side
of coffee: social yet not intoxicating, consumed in the presence of genteel
company with diplomatic discourse and sometimes enhanced with exotic
flavourings. From the masculine side, it would be hard to imagine the Marlboro
Man fixing breakfast on the range with anything but perked coffee. Indeed, any
gumshoe dreamed up by Truman Capote sustained their lives through a liquid
diet of Bourbon (from both Kentucky and Brazil).
Essentially, coffee appeals
to the two sexes in very different ways. The caffeine rush experienced when
going that cup too far can metaphorically and literally be compared to
testosterone. Likewise, the expression should be “coffee and sympathy” to
accurately reflect feminine social settings. Even in our own North American
context, the efforts made to bring equality to the sexes have not diminished
our basic defining points making us men and women.
Knowing these different
perceptions opens new possibilities on how to effectively market coffee,
including the OCS and Vending industries. Of course there are common
denominators about coffee that appeal to both men and women; but how much more
successful would our presentations be if we knew how to gain the interest of
our prospects on a more fundamental level?
The decision makers who hold
the fate of getting (or not) the sale have a whole host of issues to consider
when taking on any new supplier. If they have a vested personal interest in
that decision (i.e. they personally will be consuming the product) then there
is an added element to the sale. Rarely does it happen that the person giving
the final go ahead on any new OCS provider hates the coffee or service them
self. Therefore, marketing to the manager has to appeal to all the “head”
issues that are easily quantifiable; beyond that, in a battle of equals, the
provider who successfully identifies with the heart of the manager will win
the day (and the account).
Currently, decision makers
are more likely to be women than men when it comes to deciding the OCS
provider. Consequently, those issues that appeal to women will be an important
part of the 4 P’s in any OCS provider’s marketing mix. As an example, the
look of the packaging plays an important role in appealing to the more
discerning aesthetic values possessed by women. Further, the types and methods
of POP (Point of Purchase) material used in accounts should take into
consideration that they, at the very least, would not be offensive to either
of the sexes.
It doesn’t have to be as
complicated as running two separate sales programmes dependent upon whom in
the office is doing the buying. What should be recognized is that buyers
respond to different sales cues. The front line sales person who has great
success probably modifies the presentation intuitively through the verbal and
nonverbal communication received from the buyers. It’s the responsibility of
the owners/marketing managers to provide the tools to those reps, which
facilitate the process of selling on all levels (for a good read on this,
refer to Maslow’s hierarchy of needs).
While it could be said that
the hand that controls the coffee pot is the hand that rules the office, the
majority of the staff have to be satisfied as well. Thus any focus on selling
to the gender at the detriment of the fundamentals of good service and great
coffee will yield disastrous results.
Green Coffee Market Update
by Stuart Daw
Since our last update of
June 9, 2002, (also posted at www.heritage-coffee.com) which still could serve
as a summary of the current market situation, the Brazilian harvest has been
brought in at around 50-million 60 kilo bags. That represents about two-thirds
of entire world arabica production. Thus predictions of a bumper crop were
confirmed, which should ensure price stability for some time to come.
One element that deserves
serious attention however is that, even with no drought in Brazil this fall,
that country will fall short of this year’s output by many millions of bags.
And for the first time in history as far as I know, the next ten largest
arabica producing nations are all predicting a lower yield as well.
That condition should serve
to dry up some of the surplus inventories responsible for stifling green
coffee prices in the past few years. Only with the restoration of a balance
between supply and demand can prices begin the recovery sought by producer
nations. We hesitate to predict the timing of such a recovery, however.
Depending on the nature of
your business and the markup over coffee cost you enjoy, by next spring, to
take a longer inventory position might be the prudent thing to do. You should
be aware, however, that doing so could also be expensive “insurance.” That
is because, absent a fundamental change in the market, you would be about 10
cents (US, green) over the market as the “Futures” now stand. That would
put you around 19 cents per pound (roasted, in Canadian dollars) over your
competitor who had continued to buy priced on the “Spot” green market.
Southern Heritage - Marsh Marriage
On August 9, 2002, a “synergistic
merger” took place between Southern Heritage Coffee of Winchester, Kentucky,
a wholly owned subsidiary of Heritage Coffee Co. Ltd. of London, Canada, and
Marsh Supermarkets Inc. of Indianapolis, Indiana, the largest supermarket
chain in that region.
In the transaction, Marsh
became owner of Southern Heritage, giving it vertical integration for its own
coffee supply while enabling Southern Heritage to expand its growing
participation in providing private label supply to US domestic OCS/Vending and
retail customers. Kevin Daw, 22-year coffee veteran and president of Southern
Heritage put it, “This will enable us to expand our capability to market
coffee in all its applications, whether food service, retail, vending/OCS or
in any other facet of the coffee business. We will continue to offer all the
same great blends and labels we have become known for, while aggressively
moving forward with our new “Serengeti” line of high end coffees. While
Marsh gains the market advantage of being a coffee roaster, Southern Heritage
gains the back office support and wherewithal to realize our long-term goal of
becoming the private label roaster of choice in the US.”
The deal also includes Marsh granting a
long-term contract with Heritage Coffee Co. Ltd. of Canada for the procurement
of green coffee. Stuart Daw, Heritage president, also announced plans for
expanding the London, Ontario roasting facility, including its capability to
handle the increasing demand for its production of cappuccino, chocolate and
other related products in its Unified Packaging Co. Ltd. subsidiary.
Volume 9, Issue 2
Second Quarter 2002
Trends of Yesteryear Revisited
by Kevin Daw
On a recent flight to the
NAMA show in Las Vegas, I went to the gallery to request a coffee and wound up
in a short conversation with the flight attendant about the true fate of TWA
Flight 800, as well as Flight 587 that crashed in Rockaway. It turned out that
she “researched these kinds of things.”
Within minutes it was
relayed to me, in a somewhat conspiratorial way, that no one knows the real
cause of these disasters, thanks to a quick and decisive cover-up by “them.”
On top of that, we never actually ever went to the moon! “No metal is made
that could allow humans to withstand the radiation up there,” she explained.
“Research it for yourself,” she suggested.
After a brief moment during
which I made an assessment of the odds that she could maintain her sanity long
enough for me to feel land safely under my feet again, I considered her next
statement, “If they can fool us on that, they can fool us on anything.”
That statement led me to
dwell on the conflict between illusion and reality — perception versus what
is, not just as it pertains to our otherworldly adventures (or lack thereof)
— but to the more practical applications that arise in our own industry.
For example, selling the
idea of better price or service will not ensure long term loyalty from
customers, if they perceive that it was all an illusion.
On the other hand, having
something that sets you apart from your competition is the key to a successful
operation. This is often achieved through product or equipment exclusives, or
from a philosophical differentiation from competitors that is ingrained into
the corporate culture — including the company’s marketing direction.
In the previous issue of Bean
Thinking™ I wrote about real trends versus sales programs disguised as
trends. At the recent NBPA and Spring NAMA shows, I became aware of yet
another category of trends, which I have named “Trends of Yesteryear
Revisited.”
In these shows, I saw at least two
manufacturers marketing new, small location vending concepts. The small
location vending trend was “all the rage” when I entered the business in
the early eighties. Like many others, we took our lumps in pioneering a
difficult market segment. So I was astonished to see manufacturers putting in
so much time, money and energy into an old and tired niche twenty years later.
That what they are
attempting to do flies in the face of conventional wisdom has not hindered
them from plunging forward with what appears, on the surface, to be solid
small location concepts.
Becoming trapped in the
illusion that something cannot be done, or has been done to its full capacity,
can be dangerous for a mature business. How many times have you heard that the
OCS industry has no room for upstarts and that the barriers to entry are high
and growing taller all the time? Yet, our experience at Southern Heritage is
quite the opposite. We are working with several new clients who are just
beginning their OCS businesses with all the vim and vigor reminiscent of a
late 90s internet startup.
If you were to ask five
different business owners of varying size and age how they perceive the
future, you would most likely receive five different answers. In a mature
operation, customer accounts are filled with myriad brewer styles and new
concepts are added continuously both to fuel sales growth and manage
attrition. As one very large operator pointed out during the NBPA show, “While
we’ve been standing here talking for ten minutes, I’ve just lost five
accounts.”
Obviously, the smaller
operator’s perspective is quite different. One such operator recently asked
us to bring back a sales training program involving three-day demos utilizing
“pourovers.” My father, Stuart, was shocked that anyone would want to
bring back the “Dog and Pony Show” that he had developed in the seventies
and was especially surprised to hear the operator exclaim, “They’re easy
to put out and there are so many locations for them.” Hmmm…someone forgot
to tell him that it isn’t possible to do this today, so he’s busy making
it possible.
We have probably all been
guilty of dropping one good sales tool or trend for another, lulled by the
illusion of “greener pastures.” In fact, if you took a stroll through your
warehouse right now, you might well see the remnants of equipment purported to
be “the next great thing.” Perhaps they could be again, if efforts were
redirected and marketing people were reintroduced to them. We just need to get
past the illusion that what worked yesterday will not be successful today.
Many in our industry feel we
have crossed some point of no return in the handling of accounts and delivery
of product — that if an account does not generate three figure sales, it is
not worth keeping and each location must be loaded up with the latest “bells
and whistles” to be viable.
Debates rage over the brew
method of the future. Could it be that the old drip method is just fine for
many situations, that quality coffee and impeccable service are what really
count?
Keeping options open to old
ideas as well as new may help your organization feel and act young and
aggressive at any stage.
Kevin Daw Elected to
NBPA Hall of Fame
The trade show agenda was a
little more exciting for Kevin Daw this year as the NBPA Hall of Fame
Committee chose to honor him with an induction into their ranks. Every year
the existing Hall of Fame members elect two industry veterans to join them in
the Hall and this year Kevin was chosen, along with Joe Webster of Newco
Enterprises.
Kevin had the following to
say regarding the induction, “That this was a vote of my peers, people I
have a great deal of respect for, makes this a wonderful surprise and a great
honor. The fact that Stuart got to sit in the audience while I received the
award made it rather surreal.”
Hall of Famers not only
nominate and vote on new inductees but are asked by the NBPA to help create
ideas for upcoming shows, to lend their expertise in the accompanying seminars
and to gather support for the annual convention.
Each year, the HOF has a
breakfast meeting to discuss the show and industry direction. Of the breakfast
Kevin noted, “Just to be able to spend an hour within such a think tank blew
me away. All these people are more than willing to be pulled aside during a
show and give their opinion on any given Office Coffee subject with the
questioner walking away a wiser person. That’s what going to tradeshows is
all about.”
Know Thy Competitor
by Brian Martell
You are on your way to work, driving
down a busy boulevard dotted with various businesses. At a main intersection,
you see a long lineup of vehicles waiting their turn at the drive through…to
get what? Coffee. Coffee that could be had at the office for free. Coffee that
forces people to leave home earlier to accommodate the “Java Jam.”
As you pass this urban tableau, you
shake your head in bewilderment as to why someone would go through all that
hassle; after all, you are in the OCS/vending business. Walking into the main
entrance of your shop, you can’t believe that one of your own employees is
walking around with a coffee—bought at a drive through!
This is not a new phenomenon; indeed
it has been going on for some time. The Coffee Association of Canada shows
statistics indicating a full 50% of all coffee consumed in the office was
acquired outside, in spite of the fact that most offices have a coffee
service. This fact bears looking at for all OCS operators.
The general perception out there is
that the coffee in offices is less desirable than what could be had in the
various coffee shops down the road or even in the same building. Why is it
some consumers are willing to spend as much as $1,000.00 a year to buy a
product that is relatively inconvenient to get, when it’s free at the
office?
In some instances, smoking laws can
be seen as the culprit. If people are going out of the building for a smoke
anyways, why not go the extra step and grab a coffee? For those who bring
their coffee in from the drive through, it could be a case of a morning ritual
not to be tampered with lest the whole day goes awry. Finally, it could be a
perception issue where the office worker perceives the $1.75 cup of coffee
down the street to have more value than the free stuff in the lunchroom
(ouch!).
In recent ads on Canadian national
TV, this perception has been exploited by the image of two fellows in an
office debating whether it’s worth it to have a cup of coffee while looking
at a suspect coffee bowl. From behind them walks a woman with a cup of Tim
Hortons and declares she made the coffee in the bowl…yesterday.
So what do we do about these issues?
If perception is your problem then it is absolutely necessary to change the
way your customer sees your service. If there are legitimate beefs about
coffee quality, cleanliness or the level of service you provide, then address
them pronto. If the smoking crowd is opting to not only walk a mile for a
Camel but also a coffee, then put a sign on the machine in the lunch room to
remind the staff that not only is the coffee good (nay, excellent), but that
it travels downstairs and out the door pretty well too. You may even want to
have your paper/foam cups printed with a whimsical character saying “Take me
with you!!”
For those customers who are stuck in
an expensive ritual, perhaps the solution could be as easy as the following
promotion: “Drink our
Coffee, and fly to Disneyland!” Beyond the fact
that some people will think the coffee is spiked with some illicit drug, the
promotion can be simply stated for all those drive-through denizens:
Every
time you think of going to the coffee shop, but instead enjoy our terrific
coffee for free, drop two bucks into a jar. By the end of the year, you’ll
have enough money to fly to Florida.
If you’re really keen on this idea,
you may even want to give away “Florida or Bust” jars with your logo on
the other side.
In the end, not only will you be
doing a great service to your customers (by keeping their employees put), to
your customers’ coffee-drinking employees (nice tan!), you will also be
rewarding your own business by increasing sales without putting on any new
accounts.
Have you seen my suntan lotion?
How to Make a Copyright Symbol and More...
If you're creating your own flyers
and brochures and need to type the symbols for copyright, trademark and
registered, here’s how the professionals do it.
In Windows, all you do is hold down
the “Alt” key, and while continuing to hold it down, hit the “Zero”
key and then three additional numbers in succession. For example, for ©
Copyright, hold down “Alt,” press 0, then press the numbers 1, 6, 9. Then
you can let up the “Alt” key.
It’s quicker and easier if you use
the numeric keypad at the right of your keyboard (make sure the “Numlock”
light is on).
Here’s a list of common symbols
with their “shortcuts.”
Copyright (©) is Alt, 0, 1, 6, 9
Trademark (™) is Alt, 0, 1, 5, 3
Registered (®) is Alt, 0, 1, 7, 4
Bullet (• instead of asterisk) is
Alt, 0, 1, 4, 9
Ellipsis (…instead of 3 periods) is
Alt, 0, 1, 3, 3
“N” Dash (– longer than a
hyphen) is Alt, 0, 1, 5, 0
“M” Dash (— instead of 2
hyphens) is Alt, 0, 1, 5, 1
Cents (¢) is Alt, 0, 1, 6, 2
French accent (é) is Alt, 0, 2, 3, 3
(as in café)
French accent (à) is Alt, 0, 2, 2, 4
(as in à la carte)
One-quarter (¼) is Alt, 0, 1, 8, 8
One-half (½) is Alt, 0, 1, 8, 9
Three-quarters (¾) is Alt, 0, 1, 9,
0
Volume 9, Issue 1
First Quarter 2002
Trend or Trendy?
Welcome to 2002. May we all experience a
more peaceful and prosperous year than was possible in 2001.
The uncertainty of the
economy is already reshaping trends directly affecting our industry. Webster’s
Dictionary defines a trend as “to have or take a general direction.” In
which general direction does the OCS industry find itself headed in 2002?
In discussing trends one
must be careful to differentiate what is truly a trend versus a marketing
effort disguised as a trend in an effort to fuel growth. Back in the early
eighties we bought into the “small location vending” trend only to find
ourselves years later entrenched in full line vending because the original
trend wasn’t actually a trend as much as an untried concept concocted by
those manufacturing just the right equipment for the job.
We’ve seen this happen
with roasting equipment manufacturers and resellers who have convinced many
operators that “gaining control of the product” and recouping costs
through manufacturing will bring great rewards to those who dive in and doom
to those who do not. The facts missing from the sales pitch are (a) that you
now have to head up a manufacturing company as well as a service organization
and (b) that the operating costs can far outweigh any savings.
Beyond the marketing sizzle
gained by roasting one’s own product, the complexity and diversion to the
existing business this trend creates may well mark its slow reversal. Maybe
operators will also start to manufacture their own non-dairy creamer?
The Heritage Coffee
Companies have actually acquired the coffee volume from no less than three
roasting operations in the past year — companies who had been roasting for
some time and had come to realize that, not only did roasting their own
product not produce the promised golden eggs but turned out to be a goose of
fickle manner and high maintenance.
If you roast your own and
are thinking you’d like to divest yourself of this part of your operation,
feel free to call us to discuss options.
Another burgeoning trend
spawned by a few savvy entrepreneurs and the “no holds barred” economy of
the late 1990s has been single cup brewing.
While single cup brewing
itself is certainly a trend, no de facto standard seems to have emerged
from the fray. We have created blends to work in most single cup applications
and have recently introduced a liquid concentrate single cup solution, but so
far no one program has risen to the top. A now solid segment of the coffee
business, single cup brewing seems only to be hampered by its inherent high
cost and self-created complexity.
Have you ever watched a
consumer new to the technology stare blankly at a recently installed single
cup coffee unit, then give up and opt for a soda out of sheer desperation to
avoid looking like an imbecile before his peers? While many people love the
choices offered by single cup units, this trend will not really take off until
the equipment incorporates voice recognition technology that can take a spoken
command and turn it into a nonfat decaf latte.
Another significant trend of
the past several years has been the attempt by operators to capture all sales
generated by vehicles delivering goods to businesses, be they office products,
coffee, snacks or water. On the surface this concept offered the dream of vast
riches mined from the economies its implementation could represent. If only it
worked as well in practice as it did on paper. Alas, the trend towards a
one-stop shop operation took a blow with last year’s demise of U.S. Office
Products.
With the best of intentions,
U.S.O.P. made a grand attempt at squeezing synergies from a national network
of vending/OCS/office products/water companies. They soon discovered that it’s
tough enough to maintain an acquisition after the entrepreneur has left or has
been reduced to employee status, while at the same time trying to piece
together four separate such entities.
The only true similarity
these businesses enjoy is that they deliver to offices. Each requires a focus
in training, marketing and operating that negates their easily being rolled
into one. On a market by market basis, this trend may still have merit but it
remains to be seen if anyone can successfully pull it off. There are actually
signs of a trend towards refocusing on core competencies as some companies are
selling off unwanted segments.
In the specialty coffee
arena “issue coffees” have become de rigueur. Coffees classified as
“organically grown,” “fair trade” and “bird friendly” have made
waves in recent years, but some people are questioning whether “cause
coffees” do more to confuse and alienate the consumer than cure a perceived
ill.
For example, what happens
when a farmer who is paid “fairly” for his coffee under the fair trade
certification program, furnishes a product that simply is bad tasting? If the
consumer has been programmed to believe that fairly traded coffee is the only
honorable one to drink, then by extension, all other coffees are, therefore,
not honorable possibilities. If they have poor drinking experiences with fair
trade coffees, they are then more likely to move to an alternative beverage of
choice. So, while these coffees are currently “trendy,” they may not
attain the critical mass necessary to be labeled a true trend.
The most critical and
meaningful trend for all of us in the coming years should be a continued
effort to educate the public as to what constitutes a good cup of coffee and
to instruct them in coffee preparation methods to ensure that every cup of
coffee consumed is as good as it can be.
— KD
One Man's Passion...or Poison?
Coffee is one of the very
few beverages that people prepare as they see fit and to their own liking. If
only we could hit that perfect taste every time!
What we like depends on what
we hold in our memory as well as the nuances of the beverage currently sitting
on our taste buds. The variables in coffee are numerous, unlike bottled sodas,
for example, where formulas are closely guarded.
With coffee, the taste is
influenced by the ratio of coffee to water, the brewing temperature of the
water, the cleanliness of the holding vessel, the time the brewed coffee has
been held, the temperature of the coffee as it enters the mouth (the lower the
temperature, the more dense the brew—thus the fuller the body, or
“mouth-feel”).
You can see the difficulty
in extracting a perfect and consistent cup of coffee each time. With Coca
Cola, the formula never changes and heaven help the one who tries to alter it.
With coffee it’s all in the fussing.
How can we say that one
coffee is better or worse than another unless both have been tried under the
same scientific conditions? Here is an example of our industry’s dilemma.
Last week I received an
e-mail message from a woman who had attended a banquet where she had the most
wonderful cup of coffee she had ever enjoyed. She just had to know where she
could buy the same coffee for home use, promising great riches to our company
should we ever foray into grocery stores with this particularly splendid
blend. When I checked the blend used on that occasion, I discovered it was a
lower quality blend designed to emulate the popular can brands.
My point is — for all the
coffee knowledge and experience we gather about public likes and dislikes, and
about what we think the public should like, we can still get it wrong.
One man’s passion is often another man’s poison.
My e-mailer discovered a
passion for a coffee created for its mediocrity. The next person may not share
that passion.
Rich in Flavor — Priced to Sell
Every operator has the need
for at least one high-end, mid-range and economy-styled offering. At the
Heritage Coffee Companies we are best known for our high-end coffees. But we
also take pride in offering the very best in each price category.
This month, we’d like to
bring to your attention our Rich Valley Roast. This blend has always
represented great value and with a recent restructuring of the blend, we have
given this coffee a boost in quality while actually improving on the cost per
pound.
If the recent economic
downturn has you looking for an alternative sales approach, Rich Valley Roast
just might be the ticket. Call 1-800-486-1198 for samples and pricing.
Marketing Tips for Free Publicity
Email Signatures: Are
you using an email signature to promote your business? You can gain free
publicity by using your business email to remind recipients how you can help
them. Make sure to include your name, business name and contact information
and a short blurb (your “elevator speech” is perfect) that spells out your
unique benefit to your customers.
For example: “ABC Coffee
Service brings gourmet store coffees right to your office. This month’s
feature is Colombian Decaf—call 555-5555 to order today.” Take a look at
the signatures on email you receive to get ideas of how to word your own. Your
email program will most likely have a “tools” feature that adds your
signature automatically to all email you send. It really adds some snap to
your business email.
Letters to the Editor:
As your city’s local coffee expert, you can gain visibility with a
well-worded “Letter to the Editor” of your local newspaper. Whenever
coffee’s in the news, you can expand on the subject for the benefit of other
newspaper readers.
This is one of the “free
publicity” tools that can become part of your ongoing marketing plan, along
with press releases and radio call-in shows. If you have good writing and/or
speaking skills, you can schedule these activities weekly or monthly –
whatever works – but do it consistently for best results
