Monday, January 27, 2003


coffee. . .the real thing?

as long-time readers have surely noticed, coffee is a strange industry. it moves slowly; it's tied to very old-fashioned methods of doing things; and the largest coffee corporations seem to actively resist modernity in all matters except in the race to the bottom line by using the very cheapest beans whenever possible.

partially as a result of the general decline in coffee quality, coffee consumption in the western world overall has been dropping. but the savvy marketing of soft drinks, like coca-cola, has also contributed -- people who used to drink coffee with their meals now often open a can of coke. even for breakfast!

this is what makes your local independent specialty roaster so valuable; they are devoted to keeping coffee quality high. and this is why starbucks has been such a huge success; they do in general use high-quality specialty arabica beans. they have re-introduced a certain level of quality coffee to the u.s.a, and are now busy spreading it around the world.

due to the success of starbucks, and what seems like a new generation of coffee-drinkers on the horizon, coca-cola is now interested in the hot-coffee business. readers in japan and india of course know that coke already sells iced canned coffee and self-heating canned coffee from vending machines and fast food places there (the drink is called georgia [in japanese]). so the venture into coffee would not be entirely new for coke.

but it would be a wake-up call for the slow-moving coffee world, that's for sure. coke isn't looking at selling canned coffee at the supermarket. no, it's focusing on extending its brand at restaurants and fast-food places.

like competitor douwe egberts, coke is interested in a new form of coffee -- coffee concentrate, an already brewed liquid that restaurant employees can simply dilute with hot water and serve. while concentrate doesn't taste quite as good as well-made high-quality coffee, alas it does taste better than the poorly made low-quality coffee that most americans are now used to from restaurants and fast-food places. plus, it's less work for the food service employees, and can be made more quickly than traditional brewed coffee.

to my mind, coke is thinking too safe here. they should go head-to-head with starbucks by opening coke stores, at which you could get all kinds of coca-cola beverages, everything from the teas to the sodas to the coffees. the power of the coke brand, and its endless global popularity, is a force that only a fool would deny. . .by serving only cold snacks, they could create a huge market for themselves without stepping on the toes of their fast-food customers.

once coke enters the coffee market, and if this first foray is successful, i'll be on the look-out for those coke storefronts in just a couple of years. . .if i were a coffee executive, i'd mark this on my calendar as an interesting day. . .

posted by fortune | 4:23 PM | top | link to this | email this: | | | 0 comments