What Coffee Roasters can learn from Craft Beer Brewers

Beer, Coffee

I recently read an article about Stone Brewing Company, based in California. I’ve liked their beers since I first discovered them, but really knew nothing about the company. Well, it turns out that the company is as awesome as their beers. Check out their site when you can: STONE BREWING Co.

Stone has a model that I admire and one that we in the Coffee business can learn from. They have distribution in 35 states through commercial carriers. However, in California they distribute their own beer, using their own trucks and drivers. That is not uncommon. What is unusual though is that in addition to distributing their own line, Stone handles delivery for 3-dozen other craft brewers.

Yes, Stone delivers beer from its competitors. Their head of distribution, Jim Poer, says “We want to grow the craft market. We look at the other brands that we work with as compatriots more than competitors.” Rather than head on competition with other brewers, Stone concentrates on making the best beer it can, and differentiating itself from the large, mass market beer corporations. Analogous to craft coffee roasters distinguishing themselves from the large commercial coffee corporations and chains.

Another aspect that makes Stone Brewing unusual is the degree of vertical integration the company practices. There is the Brewery, the restaurant “Stone World Bistro“, the 19-acre Stone Farms supplying the bistro with fresh produce, a catering operation, and two distribution warehouses.

Read more about Stone Brewing Company on their site. Find out how they use bio-diesel. Check out the “Saison du Buff” beer they brewed in collaboration with Victory Brewing and with Dogfish Head Brewing.

What’s the real story behind Supermarket coffee?

Coffee, The Automat

Someone recently asked me which coffee they should buy when shopping at their local supermarket. They wanted to know if I would recommend a brand. It sounds like a simple question, doesn’t it? However, it is really pretty complicated.

So, let’s start with “Who” is on the shelves. It should be obvious, as the name of the coffee company is usually printed in large letters on the bag. However, the Brand name very often does not tell you who actually sourced and roasted the coffee.

The largest players: JM Smuckers (yes, the jam and jelly people); Kraft Foods; Tata Industries (steel mills, chemical factories, owner of Jaguar and Land Rover); and, Sara Lee (although they have been selling their U.S. coffee brands to concentrate on their International operations).

Yes, I realize you don’t actually see these names on the coffee. However, these companies buy, sell and trade coffee Brands like poker chips. They are constantly moving them around. The following list is accurate as of the latest annual reports available for each company, plus the most recent industry news.

OK, the largest Coffee Company? That would be Smuckers. They produce Folgers, which is by far the biggest coffee brand. Folgers outsells Starbucks in grocery stores four to one.

Smuckers also roasts Millstone, which in many chains is the coffee you find in the self-serve bins.

What else does Smuckers roast? Dunkin’ Donuts. But I bet you guessed that one. (Note: they only roast DD’s for supermarket distribution, not for the DD’s branded stores.)

The next largest player? That’s Kraft Foods. Kraft is a $50B company with coffee accounting for $5B of their sales. Their largest coffee brand is Maxwell House.

Kraft also supplies Gevalia and Yuban.

Tata Industries: at one time they sold coffee under the Tata name. But I have not been able to find it recently. They do own Eight O’Clock Coffee however, and that is widely distributed.

Chock Full o’Nuts was recently sold by Sara Lee. It was purchased by Massimo Zanetti Beverage, USA. Massimo is an Italian company that also owns Hills Bros., Kauai coffee, Chase & Sanborn, and Segafredo. Unlike the other corporations mentioned above, Massimo seems to concentrate solely on coffee.

In my next post I’ll go into the economics of Supermarket coffee. How much of your money is actually for the coffee and how much to “feed the system.”  Hope you follow along.

HornAndHardartCoffee.com

Restaurant Coffee

Coffee

Well, another very good Restaurant over the weekend…… with the too typical undrinkable coffee at the end of the meal.

We had high hopes for this particular spot.

There was a lot to like from the start: good decor; music in the background quiet enough to carry on conversation in a normal tone;  and, an attentive wait staff. As we were with old friends we hadn’t seen in a while, and the restaurant was busy but not crowded, we intended to settle in for the better part of the evening. The appetizers and drinks were excellent. More drinks and talk before the main course. I especially appreciated the service – attention when we wanted it, but no rush to move things along.

As we were in an excellent mood, we all opted for desserts. No sharing. They proved to be quite good.

Now came the big decision: coffee or no? As I was still recovering from restaurant coffee the previous evening, I decided not to spoil the meal. It turned out to be a wise decision. My partner’s expression was enough to tell me here was another “I’m not desperate enough to drink this” moment.

Of all the restaurants where I’ve complained about the coffee, only one responded with any acknowledgement. I received a hand written note from one of the owners, thanking me for my comments and explaining what they were doing to correct the problem. It seems I was not the only customer who was dissatisfied. We went out of our way to eat there whenever we were in the area.

Since feedback is not usually greeted with any seriousness, it mostly just leads to crossing that particular restaurant off our list. Or, if the coffee is the only weak point, at the very least no longer having dessert. This shortchanges both the restaurant and me. Dessert is my favorite part of the meal, and it is generally a very high profit item for the restaurant.

One solution I am seriously considering is bringing a small French Press with me on future outings. Then ordering hot water and brewing one of my favorite coffees. I’d even be willing to pay a BYOC fee.

Cell Phone Coffee

Coffee

Cell Phone Coffee

Were you disappointed with the coffee you were served at your favorite restaurant?

You had a great meal, but what you remember best is the mediocre to horrible coffee you had at the end.

A few years ago the answer would simply be that even the better restaurants probably did not know better. While the chef took great pains to source the best, freshest food ingredients he could, coffee was considered a generic item, like sugar. “It’s all pretty much the same.”  Today however, even non-coffee drinkers know that there is a wide variety of great coffee available.

So, why is it so difficult to get a decent cup at most restaurants?

In large part it is due to the “cell phone” effect. AT&T, Verizon, Sprint, give you a phone for free or at a discounted price, and you then agree to buy your monthly service from them. The service might not be great, but you got a wonderful deal on the phone. Plus, there is a lot of aggravation and cost involved in switching, so you stick with it.

Coffee Roasters with big budgets have been using this business model to sell to restaurants. Your favorite place gets its brewing equipment for free, and in turn agrees to buy all its coffee from that roaster.

This has two primary implications, neither of them good for you as a customer. First, the smaller, higher-end roasters don’t for the most part have the economic muscle to give away equipment. Second, the large roaster either doesn’t sell the quality coffee you enjoy, or has to substitute a lower quality bean to the restaurant in order to recoup their equipment costs.

When will this change?

Only after enough customers speak up and let their feelings be known. Tell the chef or owner that you loved your meal, but had to pass up their wonderful desserts because the coffee was so bad. Follow up with an email, maybe with a link to your favorite local coffee roaster.