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Espresso
Warehouse Newsletter - Issue 3
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Ice,
Ice Baby
If you haven't had an iced coffee yet this year where have you
been hiding? Starbucks keep promising us free summer with every
Frappuccino but I never got the free summer and god knows we could
do with it in Glasgow.
To
understand where we are in the UK in terms of International Development
I am taking a stroll around the more developed Japanese and US
markets. While I have been lucky enough to visit the US many times
I am still awaiting sponsorship for an educational trip to Japan.
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| Japan |
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Japanese have a love of canned coffee, in 1994 it was
estimated that 17.2% of all coffee consumed there was
in canned form. The market has grown to an estimated
2.4 million kilolitres or 7.2 billion cans (if my sums
are correct) and there are a startling 1.9 million vending
machines in the country, which act as the primary distribution
vehicle for these canned drinks.
Many
theories abound as to why the Japanese enjoy canned
coffee so much. Without getting into the many globalisation
theories the story I like the best is that the Japanese
had no pre-conceived ideas where coffee should be
drunk - as opposed to us Europeans who were used to
home or café consumption - and being the practical
people that they were they gravitated to the most
convenient consumption.
A
staggering 25% of all coffee consumed in Japan is
now in canned form. Seven Eleven with over 8,900 stores
in Japan launched exclusively last winter the latest
addition to Georgia's range, which is owned by Coca
Cola. The point of difference to the product, which
they jointly developed, was the taste, which was meant
to duplicate fresh roast coffee.
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UCC
the inventors of canned coffee in Japan.
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Over
70% of canned coffee is purchased through vending
machines the control of this distribution channel
becoming increasingly important.
If you think you have seen it all have a look at the
product below. It is a stab by Nestle at the established
jelly market in Japan. By jelly I mean beverages in
jelly form that ate squeezed into the mouth. The below
product press release is dated April 1st 99 so I don't
know if it really existed then or still does - if
you know share the knowledge.
European
coffee retailers opening in Japan have been forced
to offer a selection of iced beverages to compete
in the market as it is an integral part of the menu
offering in this part of the world. Ian Watson the
coffee and hot drinks manager of Pret a Manger in
the UK tells me that they have started to sell iced
coffee in Hong Kong which, is going well - this is
a change to their core beverage offering in the UK.
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Two
popular Japanese brands, Georgia owned by
Coca Cola and Boss owned by Suntory better
known for their whisky
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| USA |
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Following
the coffee movement out of Seattle in the mid- eighties there was
bound to follow a move into canned coffee by the major players.
Canned coffee in the states was traditionally referred to as tins
of ground coffee and was consumed at home and purchased from a super
market. It generally had a reputation deserving of its quality.
According to the US National Coffee Association's Coffee Drinking
Trends 2000 over 20% of the US 18+ population have consumed iced
coffee in the past year. Teens are driving the market in the US,
the legal alcohol drinking age of 21 helping I am sure.
The
US has always been known for its innovation in beverages and with
the early success of Frappuccino for Starbucks it didn't take
them long to partner with Pepsi and develop a canned version of
this. You can find bottled frappuccino in RTD format in pretty
much every main convenience store in the US and even on United
Airlines. The call of tea, coffee and frappuccino rang out a couple
of years ago when I flew with them. It was a welcome treat when
I may have chosen a coke or water instead.
The
partnership with Pepsi has reaped benefits for Starbucks as it
is now estimated that sales in the US are in the region of $100m
per annum excluding Wal Mart, which probably bumps up the total
a lot more. The bottled product for those of you who haven't tried
it tastes nothing like the in store product as it is smooth in
texture rather than the iced blended drink that you get in store.
Having said that the taste is pretty good even though the flavour
of coffee is not exactly prevalent.
On
this note the industry in some parts of the world has tried to
adapt Frappuccino as a generic name for iced blended drinks only
to be issued with writs by Starbucks for breach of copyright.
Frappuccino for Starbucks has become a generic name, as some new
versions do not have coffee in them at all.
The latest addition to their drinks range is doubleshot, a canned
double espresso and cream. You can view the advertising on the
Starbucks website which I have to admit is pretty groovy.
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The
secondary players in the US market (Arizona and Planet Java
to name but two) are so far behind frappuccino in sales
volumes at present that it will take them some time to catch
up. With Coca Cola owning Planet Java expect a big push
soon! Coke as a company, claim to be increasingly diversifying
to all beverage types and not just carbonated. Their corporate
marketing executive Jeff Gould was recently quoted in the
New York Times as having identified 32 possible beverage
moments in the day - it makes your mind boggle. Needless
to say the people at Coke are looking to fulfil all of these
moments.
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A
new development in the US market is canned coffee using
ESL (extended shelf life) milk. These products are made
using fresh milk and though they have a shelf life of
90 days need to be refrigerated. In the UK the recent
national roll out of Cravendale PurFiltre® ESL milk
with a shelf life of 20 days opens up opportunities for
coffee chains and beverage producers to develop similar
coffee based canned beverages that should taste better
than the existing products on the market.
However
not everything works in the US and Ghirardelli canned
coffee (left) has been withdrawn from the market even
though it got good consumer reviews.
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| Tremble
from Planet Java owned by Coca Cola |
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Havana
the number 5 player in the retail market, with eyes on
the number 3 slot, are proud of their packaging (see right)
which depicts a girl who represents everlasting beauty.
Perfect weight and a romantic idealism, which in their
opinion gives the same feeling to whoever sips from the
bottle. In the UK it is difficult to see this advertising
tact work but recently a new RTD alcoholic drink was launched
in the UK called Hardcore - enough said.
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| UK |
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The
market here is a lot less developed than the US or indeed
Japan. We are still getting accustomed to the idea of iced
and blended coffee in café bars not to mention in
a can. Yet again, here it is going to be the majors who
will spend big in terms of product launches. I had half
expected Starbucks to introduce bottled Frappuccino to the
UK market this year but they seem to be continuing to focus
on building volume and awareness through their stores. It
was Kenco, part of the giant Philip Morris Empire, that
sneaked a full page add into the Caterer & Hotelkeeper
in July with a launch plan for Cappio canned coffee. The
brand name was previously used in the US some years ago
and is being resurrected in the UK - one advantage of being
part of a multi-national I suppose. The product comes with
new technology - a widget in the can - that gives it a foamy
head. The picture makes it look like a Guinness except lighter
colour.
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The
press release informs us that it is being targeted at ABC1
females in the 25-35 year market and will be available from
supermarkets for £1.29 for the 200ml can. I am yet
to try it or find it in a store.
Other
brands have been around the UK for a couple of years including
Main Street but the impact has been low. With each passing
year we are seeing more high street coffee chains offering
iced coffees with Café Revive, the in-store brand
of Marks and Spencer introducing iced coffee for the first
time this year. While we (in Glasgow at least) have not
had the hoped for hot spell so far this year, those offering
iced coffee beverages will I believe not only increase their
average spend due to the higher selling price but add to
their credibility as innovators.
From
an in store point of view in the UK operators have taken two
directions, the traditional one using the blender and the
ease and speed of the granita machine. The granita method
has its critics, many operators feel that it takes away from
the theatre that in the past commands the high price, and
it's also viewed as being more wasteful. Granitas have traditionally
a poor reputation in the UK due to Slush Puppy and the like
- nothing wrong with Slush Puppy but it is targeted at children
not the ABC1's that Cappio is. Hand prepared beverages have
a better perception I believe and I am yet to taste a coffee
from a granita which compares to a good blended to order one.
Nestle
had a quick stab at the hot coffee market in the UK last
year with canned coffee that used some form of chemical
reaction build into the can to make it hot. It wasn't a
hit as it has been withdrawn but I am sure it will re-appear
somewhere, sometime.
For
those of you looking for a cheap entry to the market use
a little innovation and buy ice locally from your supermarket,
leg it down to Habitat for a cheap cocktail shaker and half
a dozen Martini glasses and get experimenting. Share your
innovations with us if you wish.
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On
the not so local front Julie from our office trekked to Lebanon
on a working holiday recently and brought back snaps of latte
glasses we had sold to Casper & Gambini'. Who ever said
that we didn't have global ambitions? |
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For
the Japanese perspective thanks to our Torani agent and friend
in Tokyo, Douglas Schlaffer and to the Japanese companies who
were kind enough to have web sites that were in English!!! Special
mentions also to Ian Watson of Prêt A Manger in the UK and
to Laura Morse at Torani US.
Until
next time, when the topic will be chocolate beverages in café
bars.
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