Sunday, September 23, 2007

Important Questions

People have become more and more interested in coffee over the past five or so years, so much so that we are seeing heaps of small specialty coffee businesses open; both roasteries and cafes. That's great. But it does open up a few questions. None of these are new, but they are of such crucial importance that they deserve not to be swept under the rug ...

Question 1: What do people actually want in a coffee?

OK, so there are a number of different types of coffee consumers out there and they will want different things, hence most pro roasters offering different blends. For example:

(a) The office worker: who wants something that's going to cut through the milk-based takeaway drink that he/she is taking back to his/her desk

(b) The masochist: who believes that coffee should be bitter as hell

(c) The foodie: who wants different, constantly changing taste experiences

(d) The outsider (for lack of a better name): who hasn't been raised with espresso and wants something a bit lighter and more acidic

(e) The poser: who wants something with an impressive name and/or pedigree

(f) The beatnik: who wants something with fair trade and organic certification

So what's the distribution amongst these areas? How much does it vary according to location? How much market research are people in coffee businesses doing? Are they targeting the right segments? How severe can the impact of selecting the wrong blend or brand be on a new business?

Question 2: How much of it is marketing? How important is flavour?

Pretty self-explanatory. Say I were to open a store that looks good on paper; multiple boiler machine, big conical grinders, clover, large coffee offering, knowledgeable staff, etc. How important would it be to actually have good coffee? Is it worth doubling your expenditure to get a tiny increase in flavour? How easy would it be to talk up something like a generic "Brazil Santos" as a premium single origin offering, or a crappy espresso machine as a god-shot box?

Example 1; over the past few years, there has been an explosion in the number of La Marzoccos and Synessos in cafes in Melbourne. I wonder how much of an asset to their business those machines are for cafes - and, yes, there are a few - that own these machines but don't actually put out very nice coffee. Conversely, would cafes that do a great job with HX machines - and, yes, there are a few - experience a boost in business if they stuck same machine inside the shell of a LM or a Synesso?

Example 2; in testing the idea that "fresh is best" by blind-tasting some imported and some local coffee, Instaurator and I had broadly similar picks, which did not have all of the "fresh" coffee ranked above all of the imports. We tasted both terrible locally roasted coffee and terrible imports.

Question 3: How will the trends change over time?

So I think that it's fair to say that fresh coffee, however you define it, is starting to gain more market share over stale coffee, however you want to define that. I personally predict and hope that that trend continues. But what direction will our relatively young fresh coffee businesses expand in? Will more poeple want a generic chocolatey blend in future, or will they want fleeting floral flavours? Will the guys who put in the hard yards to deliver quality end up with more custom than those who focus on marketing? Will there be more or fewer home roasters in future?

Naturally I have my own points of view about all of these questions, but I don't want that to obscure the importance of the questions themselves. Anyone who buys, sells or drinks coffee makes up a tiny part of a broad marketplace. It's all very well to take your own point of view and be happy with what you are doing or drinking, but it would be the height of ignorance and arrogance to presume that this applies to the whole world.

Ignoring the whole market obscures a whole bunch of very interesting questions an possibilities. For example, in looking at the specialty coffee end, Jim Schulman has come up with two fascinating and insightful, if unpopular observations/questions:

(a) The "big boys," who buy coffee that would be completely undrinkable if put through a specialty coffee roaster's drum, have invested a considerable amount of time, money and research into making a silk purse from a sow's ear.

(b) What would happen if we applied those techniques to specialty coffee?

Labels: ,

4 Comments:

At 6:04 PM, Anonymous Anonymous said...

Perhaps you can actively change market preferences and allegiances through strategic marketing and education.

Why not create co-located allegiances between roasters/cafes. Use cellar doors at wineries as a model. Train staff to be knowledgeable about the different blends and roasts. Engage customer's interests in the process. Provide tasting notes.

 
At 10:54 AM, Blogger Luca said...

Good comments, and I have to say that I agree, but your answer assumes that (a) that is what people want and (b) that is the direction that the industry should be pushing the market in. What about the various people that I made mention of who have no interest in this sort of thing? Should they be forced to endure an explanation of all of the minutii every time they go to buy coffee? If not, how should cafe owners and roasters go about managing their expectations? Actually, I think that you could probably throw bad coffee at most people with tasting notes and seemingly knowledgeable staff ... so how should cafes and roasteries go about ensuring that people are getting a good experience, as opposed to having a crap experience marketed well at them? Or isn't that important?

There's plenty of discussion about the whole fresh coffee/third wave/whatever movement all over the internet, but I don't think that there has ever been any critical discussion about where it fits in the broader market place. Almost everything that I have read starts with a trite premise that people should be pushing "freshness" and "quality." Don't get me wrong; I don't disagree, but that's basically preaching to the converted. Some preliminary questions to answer would be:

*Who doesn't the whole "third wave" concept appeal to?
*Why not?
*Should something be done about it?
*If so, what should be done and why?

For example, let's look at it in the context of Joe Bloggs' hole-in-the-wall espresso bar in a massive office building. If the majority of JB's drinks are 16oz takeaway lattes for office workers to take back to their desks to nurse for an hour or so, should JB be aiming for a light and floral blend that plays on a few star single estate coffees, or should he be going for something generically chocolatey that will taste great in milk? (dare I mention robusta?) In the three minutes that Joe has to interact with his customers, should he be telling them about an exciting new origin that his roaster has received, or asking them about their weekend?

I understand the whole move towards "fresh" and "quality" coffee, however you define that, but I do think that a lot of the discussion about it ends up being a bit repetitive and abstract. I'd love to see more people discussing how it fits into a broader marketplace.

I'll continue to drink superb single origins and blends as espresso and 150mL cappuccini, but I acknowledge that I might only represent a small percentage of consumers.

 
At 11:39 AM, Anonymous Anonymous said...

Just like the market, the industry is heterogenous. The lowest commonest denominator will always have greatest market share ie. Charbucks, Golden arches

If I was a coffee chain looking to generate quick profits, I'd buy the cheapest beans with the most 'coffee' flavour and market my business via other lines.

If my interest was specialty coffee establishment then I would push much harder on the 'coffee' part complimented by the other things that make a successful cafe.

Each business will decide on their strategy based on their corporate philosophy.

 
At 5:54 PM, Anonymous Anonymous said...

Who doesn't the whole "third wave" concept appeal to?
MOST PEOPLE
*Why not?
THEY DON'T KNOW ANY BETTER. OTHER THINGS APPEAL MORE. BRANDING, IMAGE, AMBIENCE, CONVENIENCE, PRICE
*Should something be done about it?
ONLY IF YOU WISH TO INCREASE MARKET SHARE
*If so, what should be done and why?
EMPHASIZING THE UNIQUENESS OF YOUR PRODUCT

 

Post a Comment

<< Home