Premium coffee going mainstream

by Allison Gibeson
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Finding premium coffees from Starbucks, Caribou Coffee or other brands is becoming easier as more recognized coffees are expanding in distribution in retail and food service locations.

“Premium coffee is mainstreaming,” said Steve Hayter, director of R.&D. and beverage, food and merchandise for Seattle’s Best Coffee, which is owned by Starbucks Coffee Corp., Seattle. “More and more people want access to a great cup of coffee, and we are well-poised to be able to meet that need in a couple of ways. Not only through the drinks we serve in our retail channel, it’s our distribution through partners such as Subway and AMC, and even the ready-to-drink iced latte line we recently launched in grocery.”

In terms of expanding distribution, Seattle’s Best is beginning to appear in various food service locations such as Subway. In addition, Burger King plans to offer the coffee throughout its restaurants in Canada.

“We knew that providing a great coffee would be key to having a successful breakfast program,” said Kevin Kane, a Subway spokesperson. “We looked at a lot of coffees over a period of a few years, but Seattle’s Best Coffee is the one that generated the most customer satisfaction and repeat coffee business. We have a unique breakfast menu in that, like our lunch and dinner sandwich offerings, people can customize and even choose low-fat options. We needed a coffee partner that could provide the same quality in their product, and Seattle’s Best Coffee did exactly that.”

Mr. Hayter said Seattle’s Best is trying to make its coffee accessible to the most people and available in the most places, and that’s a large part of the company’s strategy in offering its products in such varied locations.

In terms of ready-to-drink products, Starbucks Via iced coffee has been introduced this summer and is a blend of medium-roasted coffee and cane sugar and is offered in Starbucks stores as well as on-line. The product comes in 100-calorie single-size sticks sized for a 16-oz water bottle.

“Our customers are looking for refreshment that hits the spot during the hot days of summer,” said Annie Young-Scrivner, global chief marketing officer for Starbucks. “We’re excited to give our customers new ways to enjoy Starbucks coffee, and Starbucks Via iced coffee … is perfect for iced coffee drinkers and a great addition to our summer beverage selection.”

The product expands the Via line, which already includes Via Ready Brew Colombia and Italian Roast flavors as well as Decaffeinated Italian Roast.

This summer Seattle’s Best is offering a Peach CremeKula blended beverage and a Cookie Dough JavaKula blended beverage. Earlier this year, the company introduced a line of branded iced latte coffee drinks, which effectively entered the brand into the ready-to-drink coffee category. The products were introduced through the North American Coffee Partnership, a joint venture between Starbucks Corp. and Pepsi-Cola North America Beverages, Purchase, N.Y. The company is launching the line of iced tea beverages in an effort to extend its platform.

Mr. Hayter said some of the success of the cold brew drinks has to do with the fact the company actually cold brews its coffee, which he said gives the coffee a more rich taste that is smooth and doesn’t have the same astringency a hot-brewed coffee served cold would.

Some restaurants are developing their own coffee as McDonald’s even has its own line of McCafe coffees. The iced flavors include iced mocha and iced latte. There are also Mocha Frappe and Caramel Frappe varieties as well. Overall, the company’s coffee platform is an important and growing part of its breakfast menu.

Mintel International, Chicago, said that in 2005 when the economy was doing relatively well, consumer were embracing gourmet coffee, leading to an 11% increase in coffee sales. The rate of growth then fell in 2006 and 2007. In 2008 during the recession, sales remained flat at $6.75 billion. Strong demand and price increases led to growth in 2009, and Mintel believes retail sales of coffee and coffee additives in 2009 reached $6.9 billion.

According to Mintel’s Global New Products Database, there were 362 new coffee products introduced in 2009, down from 384 in 2008. In 2010 through June 24 there were 237 new coffee products introduced.

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