NEW YORK -- Private label or major brand? Air pots or thermal? Whole beans or preground? These are just some of the questions every retailer must consider when starting or updating a coffee program.
What's not in question is that coffee can be a major contributor to convenience store sales. Hot dispensed beverages accounted for more than 34% of all foodservice sales in c-stores in 2004, according to the NACS State of the Industry Report. Thus, retailers brought their questions to CSPNetwork's cyberconference titled Who Moved My Coffee: Is Your Brand [image-nocss] Delivering Loyalty & Traffic?
To view an on-demand replay of this cyberconference ($49), click here.
Providing the consumer with a whole-bean offer on site does support the perception of a premium program; however, it does necessitate a lot of attention at the point of service and a lot of due diligence, said Christopher Beath, manager of commodities operations for Mother Parkers Tea & Coffee, which both sponsored the cyberconference and offered its knowledge to participants.
The Fort Worth, Texas-based company is North America's largest private-label coffee and tea manufacturer. As such, the company offered many strong arguments for choosing a private-label program over a nationally branded program. The strong lineup of the company's coffee experts also offered suggestions to help retailers decide what elements of a coffee program might be right for them, beginning with a whole-bean program vs. preground.
Linda Bilanski, vice president of marketing, acknowledged that whole-bean programs are more aromatic and perceived as higher quality by customers. However, she also noted there are some challenges to such a program.
The biggest issue that we find with whole bean is more in quality control in terms of yield and the ability to ensure that the grinders are calibrated on a regular basis, she said. Some of these grinders provide an opportunity for someone to change the specifications and adjust the grind to throw a lighter weight, which means that you're not keeping with that consistency that you need.
She noted that the most important part of any coffee program is that customers can come in day after day, even to a different location of the same chain, and know that they're going to get the same quality that they expect.
On the debate over air pots vs. thermal pots, the Mother Parkers team agreed air pots have some advantages of perceived quality over thermal pots. If it's a high-volume operator, locations that really have no issues with [coffee] turnover, glass pots are an excellent way to go. There's just no question, said Bilanski. We've done some research that shows the consumer really is fairly neutral. They don't have a preference. But if they can see the glass pot and the coffee inside, it's an advantage. But again Bilanski said it's a matter of logistics. They need to be kept clean. They need [a fresh pot brewed] after that 20 or 30 minutes on the burner. And that's sometimes difficult to get our operators to do, and that's really the advantage of the thermal system.
Michael Higgins, co-CEO of Mother Parkers, said he expects thermal pots to grow in use for hygienic reasons, as well. The thermal pots are covered, and there's less contact with the product itself, he said. I think in the next few years, you might see the thermal pot as they develop become more popular.
On the subject of flavored coffees, the Mother Parkers team agreed less may be more. I would suggest not having any more than two or three flavors at any one time, said Bilanski. That will assist in minimalizing waste and keep the coffee fresh by increasing [coffee] turnover. You also can use in-and-out promotions. Capitalize on the time of year and seasonality by cycling different flavors through once a month or every quarter with promotions.
And finally, Bilanski offered a suggestion to retailers who want to establish a private-label coffee program, but have adopted a cobranded foodservice approach.
You can create your coffee as a third identity, she said. We've introduced successful proprietary programs that take the approach of a roasting company. For example, ABC Roasting Co., which is completely fictitious, has come in and become a brand for that particular chain. It's a private-label program, but it can be perceived as another independent brand coming into that facility and working in conjunction with the other foodservice operations.
The key, according to Bilanski, is creating an image of premium coffee that shows expertise, consistency and quality.