Eight O Clock Coffee
Transcript of Eight O Clock Coffee
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
New Things Are Brewing
at
Eight OClock Coffee
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
The Eight OClock Story Eight OClock whole bean coffee sold in A&P stores since 1859 1920s - 1950s: #1 Retail Coffee brand in America
1970s: Eight OClock begins selling to third party retailersEstablished large C-store Retailer partnership 1980s: Pagkaging innovation - freshness valve 1990s: Product innovation - blends and flavors
Rated #1 retail coffee brand by Consumer Report
2003: Became a stand-alone organizationRated #1 By Good Morning America
2004: Introduced ground coffee line extensionRated #1 Buest Buy by Consumer Report
2009: Rated #1 Coffee by Consumer ReportMarch 2009 Issue
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
Brand:
Positioning:
Benefit:
Reasons why:
High quality coffee at a reasonable price(Value Gourmet)
Best tasting cup of coffee
Better beans make a better cup-High quality 100% Arabica beans
Over 150 years of coffee expertise
Eight OClock Coffee Owns a Unique and Valued Positionin the Coffee Marketplace!
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
Clear Leader in the Value Gourmet SegmentHigher Quality at a Value Price
PREMIUMGOURMET
VALUEGOURMET
REGULARGOURMET
PremiumQuality
-100% premium Arabica
PremiumPrice Starbucks=63%ofsegment
HighQuality
-100%Arabica
ValuePrice
EOC=54%ofsegment
GoodQuality
-Robusta blend
LowPrice
MaxwellHouse&
Folgers=82%of
segment
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
EOC Meets the Needsof All Coffee ConsumersOverall Acceptance
7.0
6.5
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
Eight OClock
MaxwellHouse
ChockFullONutsFolgers Classic
DunkinDonuts
Starbucks
MaxwellHouse
Eight OClock
Folgers ClassicChockFullONuts
DunkinDonuts
Starbucks
Starbucks
Eight OClockDunkinDonutsChockFullONuts
Folgers Classic
MaxwellHouse
Total Ground Users(n=159)
Taragon Corporation, October 2004
Weak(er)CoffeeSegment(n=119)
Strong(er)CoffeeSegment(n=40)
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
Eight OClock Coffee Leads Competitorson Key Taste Attributes
Blind Taste Test Results
Overall Taste Freshness Richness Smoothness
Eight OClock Maxwell House Folgers Starbucks
37%
27%
22% 23%
36%
24%27%
24%
41%
25%26%
33%
41%
28% 29% 29%
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
Coffee RatingsConsumer Reports.org
CAFFEINATED100percentColombianbrews. VERY GOODFragrant with floral and earthy notes. Good choices even when black.1 Eight OClock Coffee100%Columbian $6.28 .15 1402 Caribou CoffeeColombiaTimana 11.76 .36 1953 Kickapoo CoffeeOrganicColombia 14.33 .40 155 GOODFewerorweakerfavorableflavors,moreorstrongerflaws;milkandsugarmayhelp.4 Starbucks CoffeeColombiaMedium 11.53 .25 1155 Bucks County Coffee Co.Colombia 8.85 .34 1956 Archer Farms(Target)ColombiaSupremo 9.05 .27 180
7 Gloria Jeans CoffeesColombianSupremo 12.99 .32 1108 Chock ful l oNuts100%Colombian 5.19 .10 1109 Peets CoffeeColombia 14.12 .31 13010 Maxwell HouseColombianSupreme100% 4.80 .05 55 ColombianMed-Dark11 FolgersGourmetSelectionsLivelyColombian 8.67 .09 60
Medium Roast12 Millstone100%ColombianMediumRoast 11.55 .13 6013 FolgersCoffeehouseSeries100%Colombian 5.11 .05 50 Med-Dark
Product Costs Caffeine Attributeslevel
(mg/cup)
Withintypes,inorderofoverallquality.
KeyN
umber
Perpo
und
Percu
p
Earthy
Fruity
Nutty
Wood
y
Paper
y
Burnt
BESTBUY
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
Eight OClock Consumersare Extremely LoyalWhole Bean Loyalty77%
54%
Eight OClock
Totallbs./
buyer
NielsonHouseholdPanel2/21/04
Starbucks Folgers Millstone
47%44%
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
A record 2.4 Billion lbs of roasted coffee
was consumed in the US last year
More than 60% of the population
drinks coffee; the highest rate ever Out of home consumption
is increasing 6% last year; in-home
consumption declined 6%
57% of people who drink coffee at
work purchased it outside of the office
Young people are rejecting robusta
based coffees such as Folgers and
Maxwell House
Private Label is on the wane; too much
confusion for customers; brands more
prevalent in turbulent times
With gas and cigarette marginsdeclining in C-stores, coffee is often
the #2 profit generator for the store;
and retains loyal customers
C-stores continue to improve coffee
offerings; increase profits in category;
increase customer loyalty and
frequency through coffee
POS and branding
within the store is
extremely important
Current Industry Situation
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
Filter Packs vs Ground Coffee
There is a reason
filter packs are not
used at Starbucks,
Dunkin Donuts,
McDonalds, 7-Eleven,
gourmet restaurants
and coffee cafes...
They make lousy
coffee!
FilterPacksdonotlieflayinthebrewbasket
Thisproducesaveryinconsistentcupofcoffee
Somearestrong,someareweak
Customerendsuppayingforcoffeethatmaynotgetbrewed
Oncefoilpackageisopened,coffeestartsgoingstale
Groundcoffeesitsevenlyinthebrewbasket
Maximum,consistentflavorisextractedduringbrewcycle
Ittakes5additionalsecondstobrewagreattastingcoffee
24pots/day-thatsonly2minutesextra
Grindingwholebeanswillincreasesalesanadditional15%!
10morecupssoldperday=$2500inadditionalprofits!
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
Potential ProfitsSelling10morecupsadayperstoreequalsanadditional
$2500 in profits per location!
2 5 10 20
$1.15 $0.90 78% -$72 $913 $2,554 $5,836
PROFIT CALCULATOR 16 OUNCE CUP
How an increase in coffee quality affects per store profit
IncreasedCoffeeCostPerCup $0.01
CurrentCupsSoldPerWeek 700
WastedCupsPerWeek 35
IncreasedAnnualCoffeeCost $728ADDITIONAL CUPS SOLD PER DAY
SELLINGPRICE
PERCUP
PROFIT
PERCUP
MARGIN
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
POS and Branding Eight OClock Coffee has developed and great POS
package for restaurants, c-stores, and cafes
POS is readily available POS is expensive. Selection of materials should begeared for the anticipated volume of the location
Small venues 10-14 lbs wk (40 cups day)
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
POS and Branding Large venues 15 lbs wk (65+ cups day)
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Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.
Competition is getting fierce
Coffee is a 70% Margin business for a retailer
Increasing Throw Weight is Most SignificantImprovement You can make
Provide Dark, Robust Options
Brands are coming back strong
Condiment choices are increasing
Operational control at store level is critical
Excellent time to raise retail prices to keep up
With wholesale increases
Summary