Roasters Rock

AN INDUSTRY THAT NEVER CEASES TO AMAZE

by Rocky Rhodes

Finding a New Market Just Past your Blind Spot.

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s specialty roasters we tend to live in a bubble. We put our craft first, being proud of our product second, and somewhere down the line it would be nice if it turned a profit as well. Our coffee being served to others represents the best we can do at the time with the beans at hand. We will always strive to improve and are willing to try new things that might make the coffee even better, or at least more interesting. If this is our bubble, it is a fine place to be! Many of us specialty roasters also have a hard time believing that there are other ways to produce coffee than those in our bubble. ‘Out there’, they have greed as their motivation and producing profits at any cost is their craft. The coffee sucks ‘out there’ because nobody cares about it the way we do. It is COMMERCIAL COFFEE!!! {gasp, scream, wheeze, faint} According to Psychologydictionary.org, many of us have a blind spot: BLIND SPOT: "The blind spot is a defense mechanism which prevents the recognition of one's true feelings because, in recognizing them, all the more they would become painful and persistent." For us, we don’t want to even taste a commercial or canned coffee because there is a slight chance that we might like it and then we would feel dirty, ashamed, and start doubting our skills mean anything at all. Ask yourself this question: If you picked a commercial canned coffee as preferable to your own coffee in a blind taste test would you A) Be fascinated by the result and tell your friends and customers, B) Ask the tester to reset the experiment because they MUST have set it up wrong C) Ignore it ever happened or D) Try to justify ‘specialty coffee’ as being sometimes off because of differences in micro lots, etc., but that those occasional differences is what makes it so special. Well, ‘out there’ never ceases to amaze! If you can stretch yourself for a moment to look into and through your blind spot, there is something honest and terrifying that is being done, and you would be fascinated to see it. Let’s call it ‘Specialty – Commercial’ coffee so we can get a frame of reference. NEW MARKET SEGMENTATION: Specialty-Commercial coffee is a craft of producing the best possible cup of coffee while constraining the variables using green coffee at extremely low cost and high supply, that must be repeatable without variance over a product lifespan of years, and have mass market appeal without being dishonest about contents. This market segment can both amaze and disappoint at times, but for the first time, this very real segment is stealing back some of the ‘specialty’ segment by offering varying price levels based on differing quality levels, and further triangulating with a variable we don’t really think about: CONVENIENCE. It turns out that the specialty coffee movement is blazing the hard trail of ever-improving quality. Our customers reward us by coming into our shops and buying a pound of coffee now and then. It keeps us going. The quality makes it sustainable. But when that customer leaves our shop, they are in the ‘real world’ of coffee, where they are buying coffee at breakfast houses and making coffee at home when they don’t want to go out. Who is satisfying their needs at those places? The Specialty-Commercial guys.

Your customers don’t tell you because they are your friends. They don’t want you to be disappointed in them for ‘cheating on you.’ Secretly they wished that you made this ‘convenience choice’ coffee so they could buy it from you. Now you have some decisions to make! Are you willing to compromise quality for price? Are you willing to put your coffee into some kind of pod, K-Cup, or other pre-ground single-serve delivery method? What about finding a nice Robusta that can add a solid base coffee flavor to a blend and lower the overall cost? For many, they are jumping back into their specialty bubble right now. That is fine! It’s safe and warm in there and the coffee tastes better. But some are thinking, “What if…” For those folks, read on! There are machines to do almost anything when it comes to unique packaging. There are also companies that will co-pack for you if you want to try it before you buy it. You, however, are going to have to start thinking of your coffee outside of the one dimension of QUALITY and into the three dimensions of Quality, Price, and Convenience. It won’t feel natural, but you can do it. Remember, your customers are already buying and using this stuff, and they would rather buy it from you. For those that fear offering this line of products will diminish their brand, do a different or augmented brand that is your price-conscious, convenient brand. It should augment your core brand and people will know they still have the high-quality choice. The real funny part about this is where YOUR loyalties are going to go with the coffee. You may end up liking this singleserve segment! Here is a business question for you that will illustrate the point: Which would you rather sell? A) 10lbs of coffee at $15/lb with 66% Gross Margin -- this generates about 480 cups of coffee B) 10 cases of 48 single serve at $40/case with 33% Gross Margin – this generates about 480 cups of coffee Remember, rent is paid with Gross Margin Dollars, not Gross Margin Percentage. A=$100 GMD B=$132GMD and it is the same quantity of coffee. The kicker is that you will probably end up selling 10x of the single serve to your same exact customers, AND they will still buy a pound of The Good Stuff for their special coffee moments. It is an amazing coffee world out here just outside the specialty bubble if you can see through the blind spot! Rocky Rhodes is an 18 year coffee veteran, roaster, and Q-Grader Instructor, and his mission now is to transform the coffee supply chain and make sweeping differences in the lives of those that produce the green coffee. Rocky can be reached at rocky@ INTLcoffeeConsulting.com Photo by Trish Rothgeb

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