THE COFFEE MARKET AND THE IMPORTANT TRANSITION

THE COFFEE MARKET AND THE IMPORTANT TRANSITION

COMMERCIAL COMMODITY COFFEE

Commercial or commodity coffee is the term that is usually referred to coffees that do not reach the 80 points in the SCA Punctuation Criteria. But in a simple way, commercial coffee is that coffee that you will find in the supermarket, soluble coffee, and coffee from cafeterias that do not work with specialty coffee – that account for more a less 97% of the whole market worldwide: yes, you read it right, only 3% of the whole world consumption of coffee is specialty coffee. As a commodity, prices of coffee fluctuate a lot, causing some serious impact in small producers of coffee all over the world that remain without support if in some given ear the price goes very low, even if they performed great in the whole growing and harvesting process. Besides that, once the small producer is too small to negotiate any price, he can get trapped in this situation for his entire life, making social ascendence almost impossible and therefore maintaining inequality of income and underdevelopment of rural areas.
In the picture below, courtesy of MACROTRENDS, you can see the prices of coffee in the market from 1973 until 2010. Now try to imagine: how can a small, resourceless producer be able to deal with it?

Coffee prices oscilation
source MACROTRENDS

Returning to the coffee bean, commercial coffee is usually a coffee that has bad quality overall because its volume is so massive and the prices paid for it are so low that it is almost impossible to assure a good standard of the product. Many times, even parts of the coffee tree and other grains are added to it so it increases its weight at the moment of the sale. Having that being said, in order to have an even pattern of flavor, big industries roast it in a way the bean ends up practically burnt. Once ground, coffee oxidizes extremely fast (in less than 10 minutes you will have lost most of its main aromas), and even when still not ground the good life span of a roasted coffee cannot surpass 2 or 3 months at the most. So go to a supermarket, get a common brand and try to discover the roast rate and the farm of origin of your coffee: impossible!
But despite all of those factors, people continue to drink this kind of coffee, and not a few people as we saw: around 97% of the population: why? Because it is in the population’s habit to perceive the bitter, uniform taste of coffee as normal. It is kind of the same way with coca-cola for example, it is a soft drink full of refined sugar (most people who drink commercial coffee also add sugar to it in order to reduce the bitterness sensation), additives, chemical products, and yet a huge part of the population drinks it because its taste is popular and in their daily perception of a refreshing sweet drink.
We can put here the main barriers to migrating
from commercial to specialty coffee:

  • Cultural and habits barrier: one of the most difficult to be broken. In Italy for example the culture of the espresso and the very dark roast is something that Italians are very proud of, so how can you say they are wrong and that type of roast eliminates most of the coffee richness? It is a very delicate point and it must be done very softly and even with some adaptations, such as using better beans but still a little bit over-roasted 
  • Price barrier: this is also a hard barrier, but easier to educate than the above one. People use to see the price but many times do not see the value. In commercial coffee, it is almost all about price. So the challenge is to show what that acquisition is adding to the environment, to health, and to that person’s pleasure. 
  • Convenience barrier: every time a human being is taken out of the comfort zone it bothers them. So this barrier can be surpassed if you gradually introduce specialty coffee in a way that the person’s routine is not much affected
  • Priority barriers: some people just don’t enjoy it very much the act of appreciating what you eat or drink, and that is ok! Whenever that happens, the approach about the story that is behind the roasted specialty coffee bean can be a very good alternative! Showing the consumer that they are summing up to the world by buying a better product can be effective and yet help our environment. 

And finally, commercial coffee can be exemplified in some products, such as:

  • Coffee is Served in big coffee chains such as Starbucks, Tim Hortons, MC Donalds, etc.
  • Coffee served in cafeterias that do not indicate to work with specialty coffee
  • Coffee that you find in the supermarket, without the roasting date, or specific farm of origin. 
  • Capsule coffee of Nespresso, Dulce Gusto, or any other – that do not indicate that has specialty coffee inside (the capsule market was responsible in a way to increase awareness of some factors of coffee that helped to push people into specialty coffee, that can be discussed in another entire article) 
  • Soluble coffee 
  • Any industrialized beverage containing coffee  

In conclusion, it is clear that a great challenge stands in front of the specialty coffee community in order to change this so-rooted habit in the world’s population. The strategy here is to try to show to these consumers an improved version of their daily basis caffeine drink, with the least amount of changes possible in their routine to don’t disturb their comfort zone in the first place. But how to do it? We have to push them to the transition zone!

THE TRANSITION ZONE BETWEEN COMMERCIAL AND SPECIALTY COFFEE

Should someone that does not know specialty coffee and that does not show much will to migrate to specialty be treated as a heretic by the specialty coffee community? NO!!! This type of consumer, and frankly almost everyone that is properly presented to specialty coffee, unless having financial restrictions (that is also a point to be discussed here – that specialty coffee is not cheap, but has great VALUE)  will like it, simply because it is a better product without any sign of doubt. But as stated before, it should be done smoothly and with proper criteria. 

EXAMPLE 1: A FAMILY IS USED TO HAVING THEIR INDUSTRIALIZED CAPSULE COFFEE BEFORE GOING TO WORK

The usual attempt of changing: say to the family they are completely wrong in this habit, advise them to buy a proper espresso machine as well as a good grinder, whole bean specialty coffee from Africa and prepared it every day.

Problems: to criticize in the first place is never a good idea. Later on, as said above, the best way to suggest a change is to try to leave most of the variables untouched, so you don’t let the person with many modifications make it. In this case, the suggestion involves changes in buying stuff that is not cheap, that people do not know if they are going to like, complicating the extraction method, and the aroma and flavor of the coffee way too much. 

The right approach: offer a specialty coffee capsule, preferably from a South American origin, and suggest them to try to reduce the quantity of added sugar gradually, once the coffee has its sweetness in this calibrated roast pattern either than bitterness. This way, their daily habits won’t change at all and the new coffee they will be trying has an easier for most people pattern of flavors and aromas, such as brown sugar, cacao, vanilla, and sugarcane.
After that, the probability that those people will prefer the improvement is very high, and you can start introducing other origins once the curiosity will rise after a first good experience with the new, and everything will be easier from this moment ahead!
In Barcelona, you can find many options of specialty coffee in capsules, and it even comes with a bonus: differently from other industrial capsules, they are compostable, much less damaging to our so already damaged environment. It is also very good to educate consumers to try to look at what waste products bought are generating because it can be a game-changer also in convincing it to switch to specialty coffee.

LINK TO SPECIALTY COFFEE CAPSULES COMPANIES IN BCN AND EUROPE

LINK TO REFILLING COFFEE CAPSULES COMPANIES

EXAMPLE 2: A CAFETERIA SERVES COMMERCIAL COFFEE FOR ITS CLIENTS, BUT THE OWNER IS TRYING TO FIND WAYS TO UPSELL CUSTOMERS AND DELIVER MORE VALUE IN HIS BUSINESS 

The usual attempt of changing: try to change the whole apparel, as well as to put a very distinct origin of coffee to improve the quality substantially, and expecting clients to switch at the same moment to a totally different pattern of coffee. 

The right approach: offer the cafeteria a specialty coffee brand that works with a good blend of coffee, that is compounded by 2 or more origins of specialty coffee in order to provide a more stable and easy to work with, and that can provide an easy and fast training for the barista or the owner who is operating the machine. At the first moment, when you change the commercial coffee for a good specialty blend, the cafeteria will come up with a coffee that has much better quality but that still has similar patterns of flavors and will not shock so much the usual consumer, and the price of the kilo is much more alike the commercial coffee, sometimes even cheaper when you are dealing with very consolidated commercial blends. So this way the business can explain the change of the product to the clients as an improvement and probably will not even have much impact on price or margins. Once the customers notice that better change, then it can be easier to go up in quality and ticket value sold with a possible filtered coffee, offering bags of coffee to brew at home and many other ways.

EXAMPLE 3: YOUR FRIEND THAT CONSUMES COMMERCIAL GROUND COFFEE IN A FILTER FROM THE SUPERMARKET

The usual attempt of changing: say to that person that they should not do that and send a list of 15 gadgets they should buy in order to start in the world of specialty coffee. 

The right approach: ask that friend to try an already ground specialty coffee, either a blend or central/south American origin coffee (that usually has less distinct aromas and flavors compared with African coffees for example), and try to offer a brand that has very competitive prices in the beginning because if you come up with a coffee that is 3 or 4  times more expensive than the person is used to pay, it is very likely that one will not buy it again, even liking it a lot. But if you get good feedback with the new coffee offered and the price is more similar to the previous brands, you may convert that friend to the “right side”. It is always very important to reinforce that once the person has bought a bag of specialty coffee, it is very likely that he/she helped that small consumer to have a more decent income for his sold coffee on the farm. 

LINK TO GOOD AND COMPETITIVE SPECIALTY COFFEE BRANDS FOR BCN AND EUROPE

After these three very basic examples, we hope to have given you the idea of how the approach to someone who is not around our specialty coffee world and be very effective in the conversion. Finally, we pass to the tear of real specialty coffee.

 

SPECIALTY COFFEE MARKET TEAR

In this tear, we find the very top the art, the distinct market of specialty coffee. Consumers who are already here usually are more inelastic to price, demand a very good quality cup, and are always looking for different flavors and experiences.
This top tear of the coffee market is the amusement park of innovation, but it has, at the moment, and at least in Spain, a very reduced size. To this tear, the care with service and communication is very important once this consumer is eager for more knowledge and information. So different from the transition, cafeterias, and places that serve specialty coffee here, and that already have mapped that have volume enough for this kind of consumer, must offer the new, the unpredicted, the flavor blast.
In Barcelona we can see some coffee shops that have this exact approach and loyal clients, by doing this great job to perfection, and that you can find in this list:

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