“I’ll Have a Tall Blonde, Please!”

Posted:
November 2011

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You say Starbucks®. I think…top-tier brand. Defiantly stubborn in their tradition of quality. I think…innovative product marketing. America’s specialty coffee lexicon. I think…unbelievable product and customer experience consistency (excluding airports, hotels, and cafeterias, of course). Starbucks equals decommoditization of coffee, circa 1990.

Starbucks is clearly a coffee industry leader. But what gives with their announcement last month of calling light roasts “blonde?!”

Interestingly, their Breakfast Blend, on shelves for years now at almost every grocery store in America, has always been a light roast. So why put so much attention on a new light roasted coffee? A light roast is about as un-innovative as product marketing gets.  So why are they doing this?

Reason 1: Charbucks

Whereas the Starbucks Breakfast Blend was simply a key piece of a complete specialty coffee portfolio, “Blonde” is the reaction of Starbucks finally listening to those coffee drinkers out there that don’t much care for the smoky taste of a darker roast. But people have been blogging about “Charbucks” for years? So, why launch Blonde in 2011?

Reason 2: The Top Coffee SKU in America: Dunkin’ Donuts® Original Blend

The Dunkin’ Donuts Original Blend is a very light roasted, mild coffee. It’s a great coffee profile to be paired with a donut. Mild and complementary. And it’s also the #1 coffee SKU in grocery stores (Nielsen 2011). So Starbucks is calling attention to its new light roasted coffee in part as a competitive response to the meteoric rise of Dunkin’ Original.

Reason 3: Third Wave

There is a new(ish) movement in coffee called the 3rd wave. (1st wave was Alfred Peet bringing specialty coffee to America. 2nd wave was Starbucks bringing specialty coffee to the masses in the 80s/90s.) The 3rd wave refers to the new generation of specialty roasters. These micro-roasters focus squarely on the coffee (not vanilla syrup). They promote single-origin coffees, direct trade programs, and perhaps most notably, light roasted coffee. Go to Stumptown Coffee in Portland, Seattle, or New York and you won’t find a lot of dark roasted blends. Instead you’ll find the spotlight on lightly roasted coffees, which allow the flavors and aromas of the coffee to show, not the roast. It is a much more “pure” beverage experience that is sought after by the Millennial Generation’s segment of coffee snobs. Starbucks can see this movement happening in their backyard, and responded by opening “3rd wave” style cafes in Seattle, including opening an experimental coffeehouse they called “15th Avenue Coffee & Tea” —“Powered by Starbucks” as the window sticker said on the front door.

Reason 4: Economics of Shrink

In the high c-market environment, lighter roasts are more desirable from a cost standpoint. You see, all coffees weigh more or less the same in their green form. But when you put green coffee in the roaster, it loses weight as the beans’ intrinsic moisture evaporates and oils are released to the surface of the bean. This is called “shrink” by roasters, and represents a lot of money going up the chimney. And the darker the roast, the more weight that is lost in the roasting process. Dark roasted coffees weigh less than light roasted coffees. They have higher “shrink values” and therefore significantly higher costs. So it behooves Starbucks to get more light roasted coffees into circulation. They will save millions of dollars per year.

Reason 5: Peet’s® Medium Roasts

Perhaps the only national brand coffee with a higher perception of quality than Starbucks is Peet’s. And definitely more so than Starbucks, Peet’s has been married to the dark roast profile since its inception. So Peet’s equally gimmicky* “Medium Roast” line of coffees, launched two months ago, no doubt helped Starbucks make the decision to launch a light roasted coffee.

*I say “gimmicky” because Peet’s had medium roasts in its line before they launched Medium Roasts.

The three implications of the Starbucks “Blonde Roast” for your private brand program are:

1 – Roast levels are gaining importance in the coffee drinker’s decision tree. With both Peet’s and Starbucks calling so much attention to medium and light roast profiles, consumers will no doubt pay more attention to their preferences in roast profiles than they have in the past. Private brand programs should take a close look at how they communicate roast levels on the front panel of their retail bags.

2 – How does your program promote light roasted coffees? Most likely, your House and/or Breakfast/Morning blends are lightly roasted. And if you have a “Donut Shop” blend, it, too, is likely a light roast. Are these coffees grouped together on the shelf? Do you use the word “Mild” (preferred) or are you using “Light” to describe the roast level?

3 – Have a 3rd party lab evaluate the roast profiles of all of your coffees. If all of your roasts are in the medium and dark zone, you might want to consider launching a lighter profile. There are consumers that want that profile, and the potentially better margins are a nice bonus.

You know, the more I think about it, blonde is growing on me. It’s certainly more delicious-sounding than the oft-used and entirely generic “Donut Shop Blend.” Almost anything would be. That’s why I’ll have a tall blonde, please!

Monthly Contributor: Joe Prewett, VP of Marketing, Coffee Bean International