Fair Trade Only...Is it possible?

[Chelle]

Ok...so as I am searching for the best coffee I can find to stock my still illusive drive thru, and looking for a way to differentiate myself from the other guy, literally there is only one where I live, I found a Triple Certified wholesaler. Is it possible to maintain a drive thru by providing only Fair Trade, shade grown, organic coffee?

I believe in the cause and get really excited about the mundane when it takes on some greater significance. Not to mention the marketing niche...

My samples are on the way...I here it is the best coffee ever, I can't wait to taste it.

Any thoughts??

 

[Chelle]

I really didn't mean that there is anything mundane about coffee

 

[topher]

I here it is the best coffee ever

How can that be when our coffee is the best :lol:

 

[Coffee Guy]

Ah Hum...Excuse me...I got some %$#@ caught in my throat :twisted: Somebody mention me as having the best coffee :wink: Okay to get serious...Don't say it Topher...Anyway Chelle, It's great to be unique and all, but I might suggest that you ask the customer if they like these types of coffees and would they support you if you offered them. Funny as it may sound, not everyone is educated about "Fair Trade" and all of the other buzz words. Most people going to work in the morning with one eye open just want to have that wonderful hot cup of freshly brewed java in their hands and proceed to their destination. Keep in mind you will have to educate your customer about the differences. Remember you are in business to make money not make a political statement. Now don't fly off the handle about my comment. It's just that this business is about gaining as many customers as possible by serving a great coffee, being served by a great person, and the customer having the ability to get in and out quickly on their way to work in the morning. Add ons can be brought into the mix later. I once had a customer that tried to make the decision for their customers by dropping a coffee that they had enjoyed for years the owner felt that organic coffees were healthier. However after a few weeks the owner found that cost of the organics were higher and they had lost some of their customer base because they did not like it as much. Morrow of the story? Start off with something that the mainstream customers will enjoy, make some money first, then ask if they would like to try something new...Just my 2 cents for what it's worth :wink:

 

[Chelle]

Thanks CG for the input. I have to tell you my hubby was completely validated by your comments, and all too happy to rub it in :twisted: But, I do agree, I am in the business to make $$$. I am considering offering an organic, Fair Trade flavor of the day, but to also have a standard house and decaf.

I looking for a way to differentiate myself. I think I can do that by having the best coffee, hubby says its all about location and convenience, and as long as the coffee "is alright" they will come. Obviously, he is not the connissuer in the family.

Any suggestions in the differentiation department? :-D

 

[barefoot]

deep breath...

So why would you not offer world class coffee that is sustainable? Where the heck will we all get coffee from in the next few years if the farmers are all dying from poison, the trees are all cut down and they can't even make enough profit to eat let alone invest back in to the farm?

If you want the best coffee to be available next year and on then we all better make some serious changes in WHAT and WHY and HOW we buy coffee. Sustainability is the only way to sustain high quality. Now Fair Trade is NOT the only answer but the thought that because it is certified or fairly traded or shade grown that it is crappy coffee is ludicrous and wrong. it used to be that way but not any more.

And YES it costs more to buy better coffee that is grown organically in the shade of native trees and to pay a fair trade type price to the farmer and cut out the middlemen. It is worth every penny.

If you pay $.50 to 1 more a pound for organic, fair trade coffee you only add pennies a cup to your costs. The farmes are hapier, your custoemrs get to have awesome coffee AND feel good about their purchases. That sure seems to be a winning combination.

And on the just get any old coffee that you can maximize your profit margin on by having the lowest cost and then LATER on get high quality coffee and sustainble coffee...well I don't think that is a super star idea. But hey if a business is the only coffee in the entire city besides convenience stores then by al means do that.

But I believe that great coffee and sustainability are the ONLY way to profitability AND satisfaction in this wonderful business. Why not get the best coffee AND get sustainable coffee?

 

[Chelle]

Hey Andy

I'm with you all the way. My original thought was to carry only Fair Trade, organic, and yes...Sustainable coffee. I feel ya.
I hear it is the best coffee ever...did you read the whole thread?
You said Fair Trade was not the only way...do tell, what other ways are there?

 

[Quink]

Apologies if this starts a war of words but this is my opinion. Firstly I would like to point out that I do not in anyway opose fair trade coffee. However the fair trade coffee I've tried tastes crap, that the only way to put it. The farmers get paid a guarenteed price per pound for their coffee, so they dont care about it as much as someone who produces a fine coffee that is traded openly. The people who get a guarenteed price are not in to growing it for quality but for the quantity that they can get out of their land. this coffee is then sold on for a greater price than a free traded coffee of the same quality would be. Once again this is only my opinion of the fair trade coffees that I've sampled, if anyone can point me in the direction of one that will change my mind, I'll admit I was wrong. Oh and one more point /question, if a farmer wins the cup of excelence award what would be the rough price per pound compared to a fair trade and free trade per pound? Oh and finaly (I promise this time) I dont know if this is the same world wide but certain fair trade logos come at a price from what I can remember its 500 euro to join then an annual renewal and then a % of the price per pound, just to use the logo :shock:

 

[javahill]

Rule One: all revenue comes from customers.

Corrollary to Rule One: Products are not a source of revenue. Products are a cost that you hope are valuable enough for customers to give you their hard-earned money.

Do consumers value certification? Do they value it enough to change their buying behavior and either go to your store instead of a Starbucks or Dunkin Donuts or pay more per cup so your business can survive on a smaller volume.

By my research and some sponsored by the licensing body for Fair Trade, a minority of people care enough about the social issues for it to drive a purchase decision. I estimate about 8 to 12 percent of coffee drinkers will make a decision based on certification. By the way, Organic is a bigger driver than Fair Trade. Many more people care about the issues, but not enough to affect a purchase decision (How many people care about global warming, dependence on foreign oil, etc. and drive cars that get less than 28 miles per gallon?). Caring about an issue is not enough to get most people to buy differently.

Right now, there are over 300 Fair Trade roasters. How are you going to differentiate against the other companies and resellers? By adding more certifications, you're defining an increasingly small niche.

I've tasted some genuinely unpleasant Fair Trade certified coffees. On the other side, the best coffees I've tasted are also FT certified. Certification is an ante to reach a niche audience. The quality of the coffee is the differentiator once you've got people in the door. Certification is the ante. Quality is the differentiator.

By the way, if you compete on quality, you will be able to appeal to a broader market than people who care about certification. Nobody wants to drink swill. Because everybody says they have great coffee, the challenge you have is convincing people that your triple certified coffee really does taste better.

Think about the car business. How does Toyota convince people they have a better product?

 

[Chelle]

Thank you, javahill, for the insightful and very logical response. As I am continuing my research, I am learning very quickly some of these basic business theorems. I whole-heartedly agree that my job is to demonstrate the quality of our products.

I believe customers will pay for high quality coffee. I know I do, I also know I've paid too much for the convenient alternatives (gas station caps )

Does cost effect convenience or does convenience effect cost, in which case you could sell higher priced coffee, FT or not...the best or not, with little concern about the 20 cents difference in price per cup?
I am still on the great quest for the best coffee for the $$, and if there is an inherent ante, the alll the better. However, when I do find the right one, I certainly hope its sustainable.

 

[javahill]

We have over 6,000 wholesale customers and the advice I give to our sales force is to understand each business and figure out how coffee will help that business go to market and make money.

Fortunately in cup coffee that is realtively easy. If you buy coffee at $6 a pounds, the cost of the coffee per cup is going to be about 14 cents. If you buy coffee at $3 a pound, the cost of coffee per cup is about 7 cents. If you sell that cup of coffee for $1 then in one case you're making 86 cents per cup and 93 in the other. If you can get 10 percent growth, say from 100 to 110 cups per day, you'll be making 87 cents X 110 cups = $94.6 a day in gross margin.

The raw economics of cup coffee favor growth over cost cutting. If you find a coffee supplier that delivers the quality, has a brand that means something and has enough variety to appeal to a range of customers (light roast, dark roast, flavors, decafs, etc.) Then you'll be able to get on the growth path.

Great coffee doesn't exempt you from good retailing practices - it is additive. Location, other items to draw people in (baked goods, cigarettes, gaslone, whatever), clean bathrooms, etc. Of course you know that.

A couple things about pricing. If you have 4 cup sizes, you'll make more money than if you have 3 cups sizes. Trust me, I've done the math. If you don't trust me, you can do the math, too. It is inescapable. Keep the pricing on the small competitive in your market. People who drink small cups tend to be local and older. As such, they will know the price of every cup of coffee in town. Do not alienate your locals. People who buy large cups tend to be less price sensitive so you can run pricing higher on large and extra large. Just make sure you're delivering the quality coffee and retail experience so people don't feel they are being cheated. Thanks to Starbucks for setting the high end of cup coffee.

 

[NW JAVA]

I'd like it if trasnfair donated all fund collected back to the workers..hehe let's see that!

 

[javahill]

TransFair is cutting their licensing fee for roasters in half. Apparently they have enough volume that they were making too much money and felt a need to give some of it up.

I've met Paul Rice of TransFair and he is authentic.

I'm not really wound up about the fees. They are not hidden costs. The idea is for people to make informed choices.

We have visited every farm we buy FT certified coffees from, so we have a very high confidence level that the premiums get to where they should.

Still, I think the market for FT coffee is limited. With more and more roasters coming on, I think it will be interesting when the market saturates.

 

[Chelle]

Interesting point...saturation of roasters, that is. I have been searching for a roaster to buy whoesale coffee from to supply my retail busines. I have used many of the resources noted in this forum. The closest wholesale roaster to my thriving metropolis is two hours or more away. As a matter of fact, I was just pondering the need for a roaster wholesaler in my community.... (it's the over achiever in me)

 

[CoffeeGoddess]

What are the good brands?

Some of you say Fair Trade products taste good, others are turning green at the thought.

For those of you who enjoyed a cup, please tell me the name and where you got the coffee. I'm preparing to start small (coffee cart during the holiday season and then a confirmed place at our local Farmer's Market six months out of the year).

I want to start with offering a Good Ol' Cup of Joe (Farmer Brothers drip coffee), one variety of flavored, Fair trade coffee, and espresso drinks.

I need to find a Fair Trade coffee that tastes great!