Monday, October 03, 2005


music to my little ears

"buying coffee at premium coffee bars like starbucks is popular with 63% of the coffee drinkers 25 to 45. This is a worry for the big food companies, such as kraft, procter & gamble, and sara lee, who are seeing declining sales for their grand old brands like maxwell house, folgers, and chase & sanborn.

sales of specialty coffees, now [US]$10 billion today, are expected to grow 7% annually, while sales of traditional coffee brands slide downward. maxwell house alone dropped [US]$75 million in supermarket sales in the past two years, about one-fifth of its overall supermarket sales."

i love, love, love this new survey. i esp. love the figure that 77% of coffee drinkers in the crucial marketing 25-45 age range make coffee at home.

notice that 80% of those people however are still using supermarket brands, not even the mermaid! this means there's a lot of room for education and growth on the specialty coffee front, and plenty of opportunity for independent roaster/retailers to open stores and expand.

only 5% of people now make espresso at home. again, this shows how much room there is for this market to grow if we can only get the educational component together. and of course this is exactly what the scaa consumer member program is all about.

while people indicated that they liked going out for espresso drinks, note that they also expressed reservations about high costs, and said they would cut back due to the price.

so clearly there is a space for a medium-priced, high-quality home espresso experience -- but the machine has to make at least mermaid quality drinks and should be relatively easy to use.

there is now no home espresso machine that fits this bill, imvho. if we could take a basic machine like the old rancilio lucy, fit it with temperature control, tweak the grinder, make it just a tad more attractive in a couple of colors, and manufacture it in a high-quality way in mexico, we'd be golden.

would anyone like to give me several million dollars to do this? on the other hand, here's the story of a couple who went the other way: making the highest-quality pro machines possible.

finally, this is also a testament to what one or 2 people can do. please remember that this whole specialty coffee movement was begun basically by don schoenholt of gillies, now-scaa chief ted lingle, and the mother of us all, erna knutsen.

many years ago when don s. went into the evil nca to try to join, they rudely told him there was no place in the world for his little, unimportant specialty coffee business. now, that unimportant business has sparked a global coffee revolution that is eating the nca's lunch.

one arrogant and dismissive response decades ago is costing maxwell house alone a nice chunk of change this year. i'd call this karma in action, frankly!

the upshot is 1 - listen when don schoenholt talks to you about coffee; and 2 - in a broader sense, be nice to the little guy, because he might not get mad, but rather, as don and the rest of the industry he helped found is doing, get even.

posted by fortune | 10:18 AM | top | link to this | email this: | links to this post | | 5 comments

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