Avoid the 7 Pitfalls of Private Brand (Specialty) Coffee Launches

An exec at a large retailer recently confessed to me: "Coffee: It's like the more I learn, the less I know." Exactly. Without going into the ridiculously complicated supply chain of coffee, the one factor you need to realize is The Passion Factor: Specialty coffee consumers LOVE their coffee. We're not selling paper towels here! Coffee is the most affordable indulgence in the store. And it's also a tremendously complex product category wherein more and more consumers require more and more information. Recognize it and realize the passion! Not doing so is Pitfall #1.

Pitfall #2 is about baggage. A private brand is constrained in a way that is similar to a brand extension in that it carries a lot of baggage with it – good or bad. My advice would be to make sure that, no matter your ultimate naming or packaging strategy, leave yourself sufficient freedom to be a real coffee brand. By "real" I mean stuff like: a website with depth of product information, a social media strategy, emotional access points to the brand, differentiated coffee packaging that is coffee-credible! So give yourself some freedom!

But all in all, there are some big advantages only possessed by private brands – particularly when it comes to promotions. Any discussion about promotion involves finding your target. Not doing so is Pitfall #3: No bullseye!


Avoid Pitfall #3 by asking the question: Where are my customers going to come from. In specialty coffee, generally speaking, there are four primary sources of customers. Here they are in order of importance to your success, and likely conversion. Obviously, this is a much broader conversation, but here is a generally acceptable way to think about your targets in sequence:


  1. Current buyers of premium national brands. Take a look at your leading seller in premium/specialty coffee. The buyers of this coffee are your target consumers, and probably the target of most of your database marketing and on-shelf promotions. Conversion, is positively correlated with price. The higher the ASP, the lower the loyalty, and the more likely you are to convert customers. So look in the direction of your top shelf and start hunting.
  2. Your private brand loyalists. Look at morning food categories, and then other categories that attract the specialty consumer like olive oil, chocolate, wine, and gourmet cheese. If you are already entrenched in these categories, you must cross-promote right out of the gates.
  3. Premium coffee drinkers not currently buying at your store. Who is buying their milk at your store but their coffee at Wal-Mart or at a club store? This is a large set of customers, and once attracted to your coffee aisle, they will be very loyal. To target them right out of the gates would be a mistake. But certainly once you are past the “it’s all about trial” launch period, look to build awareness among this community.
  4. Canned coffee drinkers. This is the long shot – so it's Pitfall #4. The canned coffee segment is a huge group of consumers, and they are 2 steps away from drinking specialty coffee. The best way to lure this drinker into the bagged section is through middle-tier offering. Think NBE of 8 O'Clock Coffee or Millstone. This customer is not loyal and will always shop price first. Table for now. Do not target.

Pitfall #5 is the integrated shelf (for most folks). I know the theories on integration vs. brand-blocking. For specialty coffee, the only way to go is the brand-block. Why? There are way too many items. Another reason: You have to get your shoppers believing that they can explore your entire private brand line-up of coffees! Integration instantly weakens your position of "quality" and makes your new private brand specialty coffee look like a value alternative.


Pitfall #6 is communications that are not coffee-credible. Like the new Bud Light campaign: "Not too light, not too heavy," you need to strike a balance between "generic" messages on quality and over-communicating with heavy-handed messages that kill all hopes of authenticity in the category.

Example. I recently walked a store in Denver. Great overhead lighting elements drew me into a nice 8-foot bagged coffee section. Right in the middle of the shelf was an 8 foot wide shelf sign that walks consumers through the supply chain of coffee: Informative? Absolutely. Any unique connection to their private coffee brand? None whatsoever.

Use shelf signage to call out differentiation, your brand promise, a pledge on sustainability, a staff favorite, a limited time offer, or a new award-winning coffee! Communicate quality in creative ways that bring out your brand messaging. Do not communicate in simple, generic messages that consumers have become immune to.


And then we come to Pitfall #7: Poorly executed demos/sampling. The best way to stimulate demand is by trial, right? For in-store demos to be successful, the coffee has to be ground and brewed correctly throughout the day. Work with your roaster to develop strict protocols for your demo team, or have your roaster do the work! It would be a shame to do everything right up until launch, only to have your targeted consumer have to spit out warm, under-extracted coffee.


In summary, there are persistent themes that must run throughout your brand's first year on the shelf. You want to over-communicate quality at every consumer touch point. So that means packaging, signage, email, web, circular, coupons, and if applicable, in your bakery/deli area. Keep your promotions targeted. The more measurable they are, the better. And finally, stay really active until you achieve scale – and beyond. Keep your shelf dynamic year-round with fresh product, fresh messaging, and fresh promotions.


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