Coffee Product Development and Design: Including the Consumer
To introduce a food product into the marketplace, three major aspects must be considered on their own and how they interrelate. The three are illustrated below, along with individual factors.
The premise of market segmentation is that there exist heterogeneous groups of consumers that respond similarly to products according to these aspects. Information needed to adequately develop a differentiated new product is based upon preferences of these individual segments.
Coffee flavor profiles are the result of type and quality of green beans (including origin), degree of roast, and freshness. Packaging must take into account freshness aspects as well as aesthetic attraction. Additional factors may include product image, the level of social consciousness and environmental appeal (Fair Trade, Bird Friendly, etc.). While consumer buying decisions are based upon preference of the product, other aspects, such as image and packaging, ultimately have an influence.
The goal of product design is to develop coffee flavor profiles, images, and other product factors that will appeal to specific segments of customers. Consumer testing can identify these segments and how consumers within the segment intend to use the product. One can then directly appeal to these segments through marketing methods such as advertising.
The coffee business has undergone numerous changes in the past 3 decades. Standard traditional coffee business models are proving inadequate in many respects. Most of the studies done by trade organizations have focused upon amount and type of product sold. To develop profitable coffee products that will appeal to fluctuating market segments, consumer desires must be investigated in greater detail. It is possible to educate the consumer and affect fundamental attitudes through marketing, but the goal of product development is to appeal to current consumer demand, to know those consumers and what affects their buying decisions, and to know how and in what circumstance they will use the product.
Product aspects: Roasted coffee products are most generally divided into commercial and specialty segments. In the case of commercial segments, an important driving factor is price and, as a result, larger corporate roasters that can achieve efficiencies of volume at all levels, from the purchase of the green raw materials to mass marketing, are best suited to serve that consumer segment. The relative quality of blends is controlled by balancing the level of use of Brazil natural processed coffees and/or use of Robusta (a more productive species that is cheaper, but not as good tasting) with “other milds.”
The specialty consumer segment is more loosely defined. A specialty food product is considered to be one that is free of taints and faults while having distinctive flavor characteristics that are particularly desirable. Historically, when the influence of the specialty coffee industry began to make itself felt during the late 70’s and 80’s, this was centered on coffees from particular origins, espresso beverages, and flavored coffees. (Note: many individuals do not and have never considered flavored coffees to be a specialty product. Due to the extra manufacturing capacity required for these coffees and other reasons these will not be considered.) The definition has since been expanded to include any dark roasted coffee product, any coffee product not sold in a can, and any coffee product associated with a particular cause.
In terms of sensory profiles, a specialty line of products is usually divided according to the following outline:
Single origin coffees – those that have unique, recognizable, and flavor profiles that are relatively well defined within the industry. These are usually the highest priced.
A. Dry-processed or natural coffees characterized by low acidity and often wild and earthy flavors.
B. Wet-processed coffees characterized by high acidity, sweet flavors, and unique pleasant aromas.
Blends – combinations that are mixed to achieve a particular flavor profile and/or price point
A. General use blends – used for everyday drip brewing in restaurants and at home. These are the least expensive specialty coffee products, but can represent as much as 75% of sales for specialty roasters.
B. Special use blends – espresso, for example.
C. Dark roasts – the dark roast is typically its own flavor profile (and preferred by a different segment of consumers), as coffees tend to taste very similar regardless of origin when roasted dark.
D. Decaffeinated coffee – the primary nutritive/physical effect from coffee is caused by caffeine, but some consumers are sensitive to this or wish to limit their intake for health reasons.
Coffee tastes best when it is fresh. This is an important consideration in product design from 2 viewpoints, (1) packaging and (2) distribution. To get the coffee into the hands of consumers in a fresh state, the product must be separated from moisture and oxygen by its packaging or purchased fresh from the roaster, as with many local micro roasters. Methods for recycling the composite one-way valve bags, the best way of ensuring product freshness for longer periods, have not been developed, and this can represent a challenge if the product wishes to have environmental appeal. Coffee in bins or barrels has aesthetic appeal, but tends to stale quickly unless closely managed as it is exposed to continual oxygen and humidity.
Consumer aspects: Where a trained panel will be able to discuss a coffee in terms of acidity, various aromas, body, etc., the consumer relates to a product from a perspective of whether or not it is liked and how much it is liked. The most important aspect to consider in product design is what motivates the consumer to make a purchase.
The two major classifications of consumers (the “specialty vs. commercial” model) assume “specialty” consumers are more concerned about flavor and “commercial” consumers are more concerned about price. However, coffee consumers make purchasing decisions based on meeting their personal desires. Some prefer lattes, some prefer a “good cup of coffee,” some like dark roast and the Starbuck’s lifestyle, and some just want a place to hang out.
These segments can be studied in a number of ways, including geographic factors (taking into account regional preferences), demographic factors (age, social variables, income levels, etc.), or attitudes and beliefs. Useful in considering the consumer in product development is qualitative information (which produce observations about consumer behaviors) and quantitative information (which produce measurable results, such as which level of roast is most liked). There are formal methods of consumer testing that have been developed, but often the best method is simply consumer observation. Where do they buy? What do they buy? Regardless of the nature of consumer information used in product design, the perspective of the consumer must be maintained throughout the product development process.
Context aspects: Context of use of the product by consumers is also changing. There has been a definite shift towards greater consumption of coffee in food service locations, but most coffee is still prepared and consumed at home. The interaction of the consumer with the product, where it will be purchased and/or finally consumed, is an important consideration in developing a product.
A consumer typically purchases coffee where it is most conveniently available. In the United States, most foods are purchased for home preparation at large supermarkets. The consumer must be given a compelling reason to take a trip to a specialty venue in order to purchase an item available in a supermarket. Nevertheless, there is a significant presence of small specialty retailers, including those with ethnic themes and others that carry a variety of high-end foods. Micro roasters also make retail sales, but these usually constitute less than 20% of sales compared to beverage service, though there are exceptions. In response to this, most large chain grocery stores sell “specialty” coffees in bins.
A tradition within the food service industry that has had an effect on coffee quality is the provision of brewing equipment and service as well as the coffee. Many smaller roasters find this to be a barrier of entry into the restaurant market because providing equipment adds significant cost to sales. This has changed somewhat as espresso beverages have entered the market, since espresso machines are extremely expensive compared to brewers and use comparatively smaller amounts of coffee. It is worth noting that the chain with the largest coffee-by-the-drink sales (Dunkin Donuts) requires their franchisees to buy their own brewing equipment. This allows all cost-of-goods to be concentrated on the coffee itself, resulting in arguably higher quality coffee.
Most espresso bars and micro roasters own their own equipment and brewers themselves are becoming increasingly sophisticated, capable of emphasizing certain flavor attributes of fine coffees, even setting up different brewing parameters for different coffees. Future coffee product development should optimize these new brewer capabilities.
The social aspect of coffee consumption has become more important in the U.S. A convenient location or a style of business known to appeal to certain segments can encourage a venue to become a meeting place or a convenient place to purchase a daily beverage (convenient drive-up service can encourage this). However, the proprietor or manager often find it a challenge to encourage “turnover” so tables will be vacant for new customers. The retailer of coffee-by-the-drink must sell a large volume to maintain adequate profit margins. Most profitable to the retailer are the espresso-based beverages.
Conclusion: When a new coffee product is designed, a variety of considerations must be made. The product itself and its qualities are most important, but the intended consumer and how the consumer will use the product must also be considered. By looking at product development from all these perspectives, introduction of a new coffee product has a much greater chance of being successful.