Today is National Coffee Day, but few celebrating
Tom Dougherty, CEO – Stealing Share
29 September 2010
Starbucks competitors need to position against the market leader
Every day is National Coffee Day at Stealing Share, but today it’s actually official. To celebrate, coffee chains across the country are offering promotions, including free cups of java at Dunkin’ Donuts and discounts at most other chains.
Coffee is my beverage of choice in the morning as it is for many Americans, as recent studies have shown that more than 52 percent of all Americans above 18 drink coffee every day. The cliché about needing a cup before I can even begin to think is so ingrained in me I sincerely believe it.
“To figure out what’s next, one thing the coffee brands need to better understand is its competition. Right now, they just copy the Starbucks model.”
Despite that loyalty, I also understand the coffee industry is in flux. Starbucks, once the Apple and Nike of coffee brands, has been trying to regroup as we’ve written about before. Local shops have replicated the experience Starbucks used to offer and chains like it are trying to compete by expanding their offerings to become a one-stop shop of sorts for breakfast on the go. (And what flavor/kind of coffee we drink is changing too.)
Then there is the invasion of the single-shot coffee makers, such as the ones manufactured by Keurig, that have a place of prominence both in the Dougherty home and the Stealing Share offices. (Although shares of Green Mountain Coffee Roasters, part of Keurig, dropped today after an accounting error.)
It is an industry looking for the next step to be as emotionally relevant as its been in the past. In a way, it has become a victim of its own success. Coffee has been a longtime staple in our lives, of course, but it has moved from the relatively mundane Folgers and Maxwell House brands to something that suggested a lifestyle, initiated by Starbucks.
Now, that brand face – a reflection of a target audience – is growing stale and earnings are dropping. To figure out what’s next, one thing the coffee brands need to better understand is its competition. Right now, they just copy the Starbucks model.
But the brand visioning that must take place needs to take into consideration all the choices a consumer might make when deciding what beverage they need in the morning. Coffee is, as I well know, habitual, but the emotional intensities existing in the changing consumer remain untapped because the brands have not changed along with that consumer. (It would not surprise me if another beverage or brand sends shock waves into the industry soon.)
I’m not just talking about marketing. Once you understand consumers – and take into consideration all the choices they have – it affects your operations as well, including the “shop” experience.
The ones that figure that out will be doing more celebrating than just on National Coffee Day. They will be cheering every day.
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