TRENDS IN BEVERAGES
This is what happens when you try to please your shareholders and forget about your customers. The specialty coffee industry must make some changes before this coffee bubble bursts. And if Americans want change, then that is what they will get...just ask Donald Trump and Hillary Clinton! The specialty coffee industry has been evolving ever since 1900. Think about it, there has been a lot of advancement since Maxwell House was “Good to the last drop” and TV commercials were singing “The best part of waking up is Folgers in your cup!” These brands embody what is now called the First Wave of coffee. Our grandparents were drinking instant coffee and the Mr. Coffee brand coffeemaker was invented. Then, the first Starbucks opened in Seattle in 1971 and the Second Wave of coffee began. The latte became popular and coffeehouses began to pop up on almost every corner. Finally, around 2002, experts began defining the Third Wave of coffee. This is where the specialty coffee industry currently resides. Third Wave references the current movement that appreciates coffee as an artisanal or craft beverage, like wine and craft beer. I’ve been in the coffee business for 10 years, and, for the decade before that, I worked in the family business becoming a master at customer service. Following in the footsteps of my father, I had a huge desire to be an entrepreneur. I wanted to get involved in a rising industry without having to reinvent the wheel. So, I opened a coffee shop in Grand Rapids, MI on October 1, 2007. Without any prior marketing experience, I coordinated the largest one-week grand opening in franchise history. I’ll never forget that date because I had open-heart surgery the exact same day (mitral valve repair). Year one, our P&L showed a huge loss because customer service was my only focus.
By year four, I was able to find a balance between outstanding customer service and making a profit. Alas, this was no small feat and it took a huge toll on my mental well-being. After fighting with the corporate office for five long years, I simply got burned out. So, I handed the coffee shop off to my parents in order to pursue a marketing degree at Oakland University, north of Detroit. This is where all the pieces of the puzzle finally began to come together for me. My love for the coffee industry, mastery in customer service, natural marketing skills, and love for analytics has led to my job as a Coffee Analyst. My research has uncovered valuable information that cannot be ignored.
It’s the arrogance and lack of interest in what customers prefer is what pisses me off. For once, I’d love to see coffee shops make a change because it’s what the customer desires. Instead, they make changes based on profitability, convenience, and wild guesses. PIZZA chains, burger joints, supermarkets, car dealerships, office supply stores, and even recipe websites... they all gather feedback from their customers. Sometimes, they even offer sizable coupons as an incentive to complete a customer satisfaction survey. It’s called market research and it’s a very simple concept...just ask Porsche, Coke, or Pepsi.
These three companies have perfected the art of ongoing market research. It takes on many forms, but the most common are surveys and focus groups. It’s one of the key factors used in maintaining a competitive advantage. They gather information about the needs and preferences of their consumers, analyze the data, and discuss making changes based on what the customers have told them. It’s been extremely effective for Porsche. According to Newsroom.Porsche. com, their “Customer Insights” department carries out more than 150,000 surveys each year. So, it was no surLet me give you a great example. A prise when they were ranked highest in huge aspect of the Third Wave move- Automotive Performance, Execution ment is lighter roasts of coffee. So, if and Layout for 12th consecutive year the “Third Wave” term was coined by J.D. Power in 2016. The tools are in 2002, why did it take until 2012 there...what the hell are these coffee before Starbucks finally launched shops waiting for? their blonde roast? For 40 years, they tried to convince us that darker As the housing market learned quickly, roasts were better. Not only that, but purchasing behavior has the power to it took them until July 2010 to offer destroy an industry with ease. If you free WIFI. I’m not a Starbucks hater, don’t believe me, just ask the ghosts I’ve just never seen a company give of failed businesses like Blockbuster the middle finger to their customers Video, Kodak, Borders Books, so many times and get away with it. Blackberry, or Hummer. All of these In reality, I think most coffee shops consumer markets shifted with blazing have failed to perform any legiti- speeds. While this paints a rather glum mate market research. Amidst an picture, purchasing habits can actually Information Age where data is overly have very positive effects. abundant, you think they’d exploit the opportunity to gather data and make Continued On Next Page sense of it. For years, coffee consumers have been guinea pigs without even realizing it. Coffee shops have almost no idea what customers want. They basically put new items up on the menu and wait to see if they will sell...the equivalent of throwing crap on a wall to see if it will stick. Dark roast coffee, high-calorie blended drinks, loyalty programs (or lack thereof), styrofoam cups, charging for WIFI, upcharges for certain milk, frozen baked goods... do they have any idea what consumers want?
w w w. f o o d b e v m a g . c o m | J a n u a r y 2 0 1 7