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Iced Coffee Is Now Ready-To-Drink (Cont.)

So what’s the future of liquid coffee? How will it impact the coffee industry, the beverage industry as a whole? Robbin McCool of Beverage House responds, “Liquid coffee is going the same way liquid orange juice concentrate and liquid tea have done in the foodservice market, with slow steady growth as the level of concentrates and servings systems increase. Liquid as an ingredient in manufacturing other beverages will continue to grow over dry powder much like liquid tea in manufacturing has grown over tea powder.” Cox agrees, stating liquid coffee and extracts provide new channels for sales growth. “Hospitals, convention centers and sports stadiums are conducive to RTD sales,” he said.

Extracts, rather and concentrates are the products used by Cox’s business. He sells extracts to use as an ingredient in foods like ice cream and confections. Ben & Jerry’s ice cream has long been one of his accounts. “Extracts,” said Cox “have a higher brix level.” In his cold coffee beverage, Capachillo, Cox uses a concentrate that is bordering on an extract level. It is hot packed, pasteurized and must be refrigerated. It has a shelf life of six months.

RTD coffee has become so popular that it’s hard to schedule a production run for many companies using the retort process. Two of the companies that provide retort are O-AT-KA dairies in New York and Livingston Chocolate Company in Tennessee. Glacier Foods in California was providing this service until recently, when a corporate decision re-directed its production to baby food. Frappuccino uses several dairy farmer plants throughout the country.

It’s time the coffee and tea industry joins the revenue stream. “Ground and roast distributors will continue to be burdened if they don’t respond to consumer demand for easier, friendlier, cleaner serving systems,” said McCool. He continued to say that demand will drive equipment manufacturers to build better dispensing equipment. “Processors will then need to raise technology and quality levels to be able to correctly process a high quality coffee extract or concentrate in liquid form,” said McCool. “It has already affected the industry and will continue to do so,” he said.

RTD coffee is an ideal product for any retail coffee chain, convenience store, stadium, convention center or other venue where you can order a bottle and go. What, then can RTD coffee manufacturers offer these distribution channels that will motivate distributors to try a new product? Three recognized successful RTD coffee executives concur that it’s the bottle and packaging.

Planet Java certainly caught the eye of Coke when it first started distribution in a New York Coca-Cola bottling company. John Imbesi, president of North American Beverage Company, Ocean City, New Jersey believes that the packaging will motivate customers to buy, but it’s the quality inside the bottle that will keep them coming back.

Imbesi incorporates his philosophy into Havana RTD iced coffee with an eye-catching, total bottle sleeve with a memorable picture of a beautiful woman. Imbesi, who is a second generation beverage executive, believes that graphics and packaging has to give the customer a reason to even pick it up. While Havana might be perceived as the perfect beverage for men who are enticed to buy a beverage depicting the beautiful exotic woman with kiss-friendly red lips, the graphics entice women for different reasons.

In an effort to reach young women consumers, Imbesi placed colorful ads in magazines like Cosmopolitan and Glamour. The Havana girl represents the key to everlasting beauty, perfect weight and a romantic idealism that the beverage contains the ingredients that promises perfection to whomever sips from its bottle.

The ad campaign is working because Havana’s sales volume is moving this RTD coffee toward the number three position. Through a distribution combination of Coca-Cola, Pepsi and third tier bottling companies, Imbesi plans to be in third place by year’s end.

For more packaging that electrifies, Extreme Coffee’s RTD brand is “Shock”. Marketed in Arizona, California, Alaska, Minnesota and Wisconsin, ceo, Dan Parodi’s strategy was to create a brand that targets a younger consumer. “It’s a little less sweet than Frappuccino, and has a cool, edgy appeal,” said Parodi, who is also known as Mr. Buzz.

Shock’s positioning, according to Parodi, is closely related to Planet Java in packaging and bottle type. Check out the web site and you will immediately understand why Parodi refers to his product as “edgy”, “Kick butt”, “hyper-chocolated” and “hyper-caffeinated” are descriptions in the copy that is targeted toward the hip generation that needs to stay awake during exams. Shock’s differentiating message, in addition to its brightly colored packaging and upbeat copy, is that it uses highly caffeinated coffee beans to manufacture this product.

A strategy that could work for both retail chains and roasters to quickly launch a RTD program is using a recognized brand. By including a recognized brand in your product mix, you can immediately start adding revenue. Plus the marketing support material has already been produced, merchandisers made and incentives created.

This method is ideal for market testing. If you see the brand is working, you can add a private label product with your name. The recognized brand may even manufacture it for you. Or, maybe you’re a ground and roast manufacturer and you have a major customer that wants a private label brand. One easy way to accommodate your customer is to have a recognized brand produce it for you. It’s a win-win deal. The recognized brand sells more product, and the ground and roast manufacturer doesn’t have to source ingredients, bottles, packaging and processing plants.

In February, Sara Lee Corporation announced the groundbreaking of a new Douwe Egberts Coffee System plan to produce liquid coffee for the foodservice industry. A press release states the 152,000 square foot facility, gives the company dual-source capabilities to meet the growing demand.

In other parts of the world, coffee companies prepare to compete with U.S. brands by introducing RTD coffee formulated especially for their respective country. Look for an announcement of a new product coming soon from Israel.

Opportunities have just scratched the surface for RTD coffee. If Coca-Cola’s marketing guru, Jeff Gould’s calculation of 32 beverage occasions a day is accurate, the coffee industry needs to make certain it gets several shares of stomach.

Suzanne J. Brown is senior marketing consultant for Hope-Beckham, Inc., in Atlanta, Georgia. She has been a consultant to the coffee and tea industry for nearly 20 years and a correspondent to Tea & Coffee for 17 years. She may be reached at (404) 636-8200, ext. 232; email: sbrown@hopebeckham.com.



Tea & Coffee - May/June, 2002
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