Specialty Coffee Retailer is a publication for owners, managers and employees of retail outlets that sell specialty coffee. Its scope includes best sales practices, supplies, business trends and anything else to assist the small coffee retailer.
Issue link: https://read.dmtmag.com/i/76684
pressures of coff ee supply and demand, infl ation is not going to stay dormant forever. "I think that overall, there's always going to be an upward pressure on pricing," he says. "Profi t margins are getting Schnitzler agrees, pointing out that in addition to the squeezed constantly, and you're going to have to run your business as a business. You're not going to be able to live in this specialty coff ee bubble. B��� B����� �� C���� C�����, ����� ���� ���� A����, ���� ��'� ������� �� ���������� ���� � ����� �������� ������� ��� ���������. R�����: S�������� ���������, ��� ����� ����������� ����� Highlights from the Specialty Coff ee Association's Sector Report for the fourth quarter of 2011: • Coff eehouse sales were well ahead of industry expectations for [the fourth quarter of 2011]. Th e gap of outperformance vs. expectations has widened to the largest level since [the fi rst quarter]. • Coff ee infl ation has decelerated during the last eight months, and coff eehouse operators are continuing to see benefi t from price increases. • Given the improvement through the quarter, optimism in the 12-month outlook improved signifi cantly compared to the prior two quarters. Coff eehouse operators are now expecting 10 percent sales growth for the next 12 months, up from expectations for 6 to 7 percent growth following the last two quarters. literally millions of people around the country to a higher level of product than they had previously gotten from them. [Consumers are] going to step up [to coff eehouses] at some point." consumer expectations, it also raises long-term pressure on prices. Observers say prices are likely to be volatile for the foreseeable future. "Th e tension between supply and demand is too much—it's too close," Rhinehart said in his lecture. "We've got stocks held SUPPLY�DEMAND TENSION But while the proliferation of high-quality coff ee is raising in producing countries at all-time lows, we've got stocks in consuming countries at near all-time lows. We have enough coff ee, but it's not necessarily going to be in the right place at the right time, and it makes for volatility. " 18 | August 2012 • www.specialty-coffee.com coff eehouse experience. "It's only specialty coff ee if the person consuming it has a special experience while they're consuming it," Rhinehart said. Th at means paying attention to all aspects of the experience. Th e way to do that is to keep up the quality of the overall " "It's going to be important to diff erentiate the product in all realms that you can diff erentiate a product to move it toward the top of the quality spectrum," Rhinehart said. "So that means better packaging, better marketing, better training, a better experience, better service—you've got to drive all those pieces of the business together in order to keep raising the value perception and the value proposition for specialty coff ee." chains in this regard, Milletto says. "People who taste a great cappuccino in our café would be hard-pressed to go to a major chain and have an experience that would even be close to what we give them," he says. "It' however, will require customer education. Even though the overall broad improvement in coff ee quality has increased the public's taste for good coff ee, it still requires salesmanship to make people distinguish between good coff ee and the best. "What we don't want to be is naïve in terms of how small For independents to take full advantage of that capability, s really the ace in the hole an independent has." the segment is that really understands and can appreciate some of these spectacular coff ees by origin and by variety, LaFlamme says. Milletto agrees, saying the industry's long-term goal should " be to get people thinking of fi ne coff ee the same way they think about fi ne wine. "Th e bottom line is, the coff ee industry has not done enough to educate the consumer," Milletto says. "Once the consumer is educated, everything works." Milletto estimates that Portland, a city already saturated with coff eehouses, could support up to 20 more if there was just a 3 percent increase in local coff ee drinkers. "To say that people are not resistant to price increases, I think that's somewhat true," Milletto says. "but I think we still have a long way to go to continue to educate the consumer so that they understand coff ee in the same lineage that they understand wine. " SCR SMALL IS BEAUTIFUL Independent coff eehouses have an advantage over the big just because of the enormous number of stores that they have, just to maintain the same attention to detail that an independent is able to do. Th at' s diffi cult,