BUY MY COFFEE

Notes from the Fractal Frontier of Coffee Marketing

I WANT TO STATE my bias at the beginning. I don’t believe in the science of marketing, and I believe less in the art. Like the false dichotomy often drawn between the art and science of roasting coffee, the terms of the question must be refused. As an activity, marketing certainly incorporates aspects of science and art, but to no greater degree than it includes divination and sorcery. And if marketing is a discipline at all, it is a discipline on par with fractal mathematics, understandable in single pieces or as a beautifully complete outcome, but chaotic and practically unfathomable on the journey in between.
     There are countless books on marketing and more than 700 million hits on an Internet search. One can acquire college degrees in marketing or hire dozens of different marketing consultants to give you a hundred different pieces of advice, each expressed in a four-quadrant grid. There are the “4Ps” of marketing, the “7Ps,” and the “New 4Ps.” And it goes on and on.
     Marketing is, according to the American Marketing Association, “an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”
     What?
     You see, marketing and marketers occupy something of a mysterious and overblown niche in the business world (pay no attention to that man behind the curtain). As a result, intended or not, there is a sense among many small- and medium-sized coffee companies that marketing is something they will do someday, when they are bigger, when they can afford it. In larger businesses, there is a sense of guilt that they are not doing it better or with more Apple-like verve. But marketing happens. By design or default, marketing happens in every company that sells anything. It’s happening in your company right now, whether you planned it or not, whether you control it or not.

     Peter Drucker, writer and management consultant, once said, “Marketing is a fashionable term. The sales manager becomes a marketing vice president. But a gravedigger is still a gravedigger even when it is called a mortician—only the price of the burial goes up.” So, this is not really an article about marketing, though I will use the word. This is an article about the many ways we ask people to buy our coffee.
     In a recent survey conducted for this article, roasters were asked to choose from three descriptions for their marketing plan. Only one out of four (26 percent) indicated they had a “formal, written plan.” Sixty-two percent describe their marketing plan as informal, with clear direction but no detailed planning, and 12 percent chose the very telling answer, “What’s a marketing plan?”
     Nearly four out of 10 respondents (39 percent) indicated that their marketing efforts have changed due to current economic condition, but only 25 percent indicated that their product offerings had changed. Some of the strategies cited by more than one respondent included price increases, a reduction of SKUs, offering more blends and adding lower-priced coffees to their product list. A little more than half of respondents (53 percent) have retail operations in addition to their wholesale business.
     When asked to describe in an open-ended question their marketing in general rather than their marketing plan, the descriptors used most often by respondents revolved around quality. One respondent wrote, “…we don’t just say quality or great coffee. We practice it, buy it, teach it and get awards for it.” That sentiment, with somewhat less force, was expressed in 17 percent of responses. In contrast, only two percent of responses mentioned providing a “value” or “fair price” as descriptive of their marketing.
     The second most popular descriptor goes hand in hand with the concept of marketing via quality. Eleven percent of responses mention “reputation” or “word of mouth” as being key to their marketing. Several roasters indicated that they rely almost solely on word of mouth for marketing. One roaster simply responded that in terms of his marketing, there was nothing to describe “…just word of mouth.”
     Eight percent of responses described face-to-face encounters, including cold calls, as important to their marketing strategy, but the emphasis was more on networking than pounding the pavement.
     Gregory Cochran, pastor of Cedar Grove Baptist Church in Shepherdsville, Ky., which owns and operates Kerusso Coffee, says, “Cold calls haven’t really worked for us. Word of mouth, for us, is irreplaceable. We have people who love the product, and they report it to others who contact us.” Still, 77 percent of roasters indicated that “cold calling” was relevant, to varying degrees, in their marketing efforts.
     Tracy Allen, founder and CEO of consulting firm Brewed Behavior, says cold calling can do more harm than good when unplanned. “Do plenty of research on any potential customer before you pick up the phone or stop by unannounced, and then don’t try to make the sale. Try to earn the chance to make the sale. Then present your unique value proposal in a way that makes them want to buy.”
     Consistent with the word-of-mouth theme, roasters gave relatively high priority to community involvement (seven percent) and promoting the fact that they are a local company (seven percent) as part of their marketing. In fact, 95 percent of respondents indicated that “local event participation” was relevant in their marketing efforts.
     Paul Manning, co-owner of Kill Devil Coffee Roasters in Kill Devil Hills, N.C., says the local angle has worked for his company recently. “Right now we are doing a shop locally campaign, hitting on the hot buttons that spending money locally directly benefits the customer by supporting local jobs, schools and local government programs through their taxes and saving gas by not traveling to the malls 60 miles away. The response from customers and fellow merchants, who shop in our store, is huge.”
     Surprisingly, some of the activity roasters often cite as differentiating them in the marketplace make an appearance but are mentioned less than might be expected. Social and sustainable issues and customer education were each mentioned in five percent of responses. Relationships with origin (including various direct-purchase programs) were referred to in three percent of answers.
     Rather than conclude that this signals a change in emphasis in the roasting sector, I believe it is a symptom of how we understand, or don’t understand, marketing. Roasters often consider these issues to be operational and/or part of their company philosophy. They’re right. It’s also true that how you operate and behave as a business creates a framework for how potential customers view (and maybe even taste) your coffee and other products. Whether how you buy coffee or run your roasting plant is intentionally part of your marketing plan or not, they are an inherent part of your marketing. I have heard roasters say they don’t talk about some of the charitable organizations they support because, “that’s not why we do it.” That’s fine, but the fact that you don’t talk about it is part of who you are and how you sell coffee. The balance between hiding your light under a bushel and cynically exploiting every dollar you give to charity in a press release can be determined only by you, but it should be determined and not haphazard.
     For Pete Leonard, a partner at start-up roaster Second Chance Coffee in Wheaton, Ill., this balance is particularly poignant. Second Chance was created to, “accomplish two things—produce truly exceptional coffee, and help transform the lives of ex-prisoners.”
     “From the marketing side of things,” says Leonard, “it’s a delicate balance. We have to market and sell great coffee in order to accomplish our mission. But we also realize that our mission is very important to those that are most likely to purchase regardless of our coffee quality. There are those who are just indifferent and apathetic to the plight of post-prison men, and what we must do to get those people to purchase our coffee is produce coffee that is so good that they purchase our product regardless of, or even in spite of, our mission. After all, we’re selling freshly roasted, delivered today, specialty-grade coffee, not second chances. People don’t purchase second chances, they purchase great products, and they’re more likely to purchase great products that align with their values.”
     The specialty coffee sector emerged in opposition to poor quality and grew by demonstrating that coffee is not a commodity but a highly differentiated product. For years, quality in broad terms was the primary differentiating factor. There was us and there was them. But as the specialty coffee industry grew and competition increased, it became necessary to begin differentiating within the quality-driven sector. Quality may be identified as the primary descriptor of marketing in our survey, but if we were to send the best coffees from each company that stated that priority to a quality-assurance laboratory for objective analysis, the results would be varied, perhaps dramatically so. Everyone says, “I love you,” and everyone says they have a quality product. But what do they mean by that?
     Selling quality, whatever is meant by that, is easier said than done. For Mike Perry, owner of Coffee Klatch in San Dimas, Calif., it’s demonstrating and confirming quality that turns cold prospects into warm prospects. This is accomplished in part at Coffee Klatch through competition, awards and ratings. “We are a unique and special micro-roaster, and we want people to know what those differences are and how it benefits them,” he says. “One thing that is really working for us now is sourcing and roasting great coffee that is generating accolades, awards and word-of-mouth marketing.”
     For John Guerin, CEO of Coal Creek Coffee in Laramie, Wyo., selling the quality of his coffee is critical. “We are one of maybe four or five small roasters in Wyoming,” says Guerin, “But we sit right at the top of the Rocky Mountain Front Range, and there are dozens of roasters in and around the Denver area. We are confident we are in the top three regional suppliers in terms of superior coffee quality and our prices reflect that. Many potential wholesale customers don’t appreciate how the higher quality can and would benefit them in the long run. It takes experience to get that.”
     One of the strategies Coal Creek has adopted to keep the quality message at the forefront is adding Cup of Excellence coffees to their product mix. More than half of the roasters surveyed (56 percent) indicated that “auction coffees” were relevant, to varying degrees, in their marketing efforts.
     Of course, the tried-and-true marketing method for quality-driven roasters is the coffee itself. Mark Orintas, owner of Bare Beans Coffee in New Haven, Conn., says that local reporters have responded to cuppings. “The press seems to love the idea of cuppings, and they have come to several events where I have received very favorable press. Again, the personal touch, even with the press, works best. Describing attributes and flavors of coffee makes people want to come in and buy or order beans online.”
     Paul Masek of Coffee Fresh in Chicago, Ill., says, “What works best for us is sampling our coffees. We have yet to lose a head-to-head comparison.”
     Masek adds, “What does not work for us is advertising. There is so much hype out there, that ads have no credibility with our target market. Unfortunately, many roasters advertise commercial-grade coffees as specialty.”
     While several respondents said they were cutting back on advertising, 57 percent of wholesale-only respondents and 43 percent of roaster-retailer respondents indicated that “advertising in trade magazines and directories” was part of their marketing expenditures. Conversely, 42 percent of wholesale-only respondents and 58 percent of roaster-retailer respondents indicated that advertising outside of trade magazines was part of their marketing efforts.
     Outside of local event participation (95 percent), the most popular ways to spend marketing dollars among roasters were websites (92 percent), membership in associations, chambers of commerce, etc. (88 percent), and sponsorships (84 percent). Although roasters place a wide variety of importance on these activities, these numbers represent inclusion in their marketing efforts.
     Despite the titles of marketing books in the business section of the bookstore, there is no single “killer app” when it comes to marketing, and what works for one company may not work for another. I believe this is perhaps more true for coffee than other products. In our survey, for every respondent who praised a method, there was at least one who tore it down. People come to coffee as a profession for many different reasons, and they stay and fall in love in many different ways. Some people will wince at that last sentence and say it’s not love, it’s business. But I’ll bet they are small in number. Can you tell me why? Yes? Then you know how to ask people to buy your coffee. Let me know when you figure it out, because, when it comes to coffee, it’s probably a one-of-a-kind strategy.

MIKE FERGUSON entered the coffee industry in 1998, joining the staff of the Specialty Coffee Association of America where, over nine years, he served as marketing communication director and ultimately chief of staff. His articles have appeared in numerous coffee trade magazines and he has been a guest speaker at several industry events. Mike is a senior consultant at Coffee Solutions and owner of Fresh Ground Consulting, mike@coffeesolutions.net.