#75 | Consumer Desire Along Roast Degree: What Do Specialty Coffee Drinkers Actually Want From Us? | Erika Vonie, Expo Lectures 2019
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With over a decade of experience in specialty coffee, Erika Vonie believes that coffee is for everyone. Like many before her, she started as a barista, and worked her way through management, events coordination, quality control, education, green buying, and importing. Along with being the 2017 Coffee Masters Champion and an Arabica Q Grader, Erika is committed to using her position to further the advancement of marginalized people within specialty coffee, using her unique platform as Director of Coffee at Trade to spotlight these issues in the media.
Using hard data collected on customer feedback and SKU performance at Trade, Erika explores one of the trends they’ve found: Customers want naturally processed coffee roasted with longer development, butting up to second crack. It challenges the programs seen within many specialty roasters. Erika sees this as an opportunity to provide insight into gaining more customers, be more approachable with our coffee, and pump money back into the industry without compromising integrity. Is the next trend a well-developed dark roast? What stops us as an industry from achieving that/providing our customer base with that option? How do we thoughtfully push development in roast profiles? Does this mean we can continue to buy relationship coffees even in hard harvest years, so money goes to the producer AND have avenues to sell these coffees to consumers?
Erika argues the answer to all of these is, “yes” - and that being more inclusive with our offerings will help specialty thrive in the face of the climate and socio-economic and political challenges facing the industry today.
Special Thanks to Softengine Coffee One, Powered by SAP
This episode of the Expo 2019 Lectures podcast is supported by Softengine Coffee One, Powered by SAP. Built upon SAP's business-leading Enterprise Resource Planning solution, Softengine Coffee One is designed specifically to quickly and easily take your small-to-medium coffee company working at any point along the coffee chain to the next level of success. Learn more about Softengine Coffee One at softengine.com, with special pricing available for SCA Members. Softengine: the most intelligent way to grow your business.
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Table of Contents
0:00 Introduction
3:20 Background to Erika Vonie and drop-shipping roasting company, Trade
7:20 Specialty coffee drinkers are very diverse and often do not conform to our expectations; many value simple flavor descriptors.
15:30 How Trade creates easy-to-understand flavor groups and which are the most popular amongst their customers
35:30 How specialty coffee should bring more people into the fold by embracing dark roasted coffees
40:00 Audience questions
51:50 Outro
Full Episode Transcript
0:00 Introduction
Heather Ward: Hello everyone! I’m Heather Ward, the SCA’s Senior Director of Content Strategy, and you’re listening to the SCA Podcast. Today’s episode is part of our Expo Lecture Series, dedicated to showcasing a curated selection of the extensive live lectures offered at our Specialty Coffee Expo. Check out the show notes for relevant links and a full transcript of today’s lecture.
This episode of the Expo 2019 Lectures podcast is supported by Softengine Coffee One, Powered by SAP. Built upon SAP's business-leading Enterprise Resource Planning solution, Softengine Coffee One is designed to quickly and easily take your small-to-medium coffee company working at any point along the coffee chain to the next level of success. Learn more about Softengine Coffee One at softengine.com, with special pricing available for SCA Members. Softengine: the most intelligent way to grow your business.
The episode you’re about to hear was recorded live at the 2019 Specialty Coffee Expo in Boston. Don’t miss next year’s lecture series in Portland - find us on social media or sign up for our monthly newsletter to keep up-to-date with all our announcements, including ways to get involved in next year’s Expo and early-bird ticket release!
With over a decade of experience in specialty coffee, Erika Vonie believes that coffee is for everyone. Like many before her, she started as a barista, and worked her way through management, events coordination, quality control, education, green buying, and importing. Along with being the 2017 Coffee Masters Champion and an Arabica Q Grader, Erika is committed to using her position to further the advancement of marginalized people within specialty coffee. She is using her unique platform as Director of Coffee at Trade to spotlight these issues in the media.
Using hard data collected on customer feedback and SKU performance at Trade, Erika explores one of the trends they’ve found: Customers want naturally processed coffee roasted with longer development, butting up to 2nd crack. It challenges the programs seen within many specialty roasters. Erika sees this as an opportunity to provide insight into gaining more customers, becoming more approachable with our coffee, and pumping money back into the industry without compromising integrity. Is the next trend a well-developed dark roast? What stops us as an industry from achieving that or providing our customer base with that option? How do we thoughtfully push development in roast profiles? Does this mean we can continue to buy relationship coffees even in hard harvest years, so money goes to the producer AND have avenues to sell these coffees to consumers?
Erika argues the answer to all of these is, “yes” - and that being more inclusive with our offerings will help specialty coffee thrive in the face of the climate and socio-economic and political challenges facing the industry today.Also, I will jump in occasionally to help you follow along.
3:20 Background to Erika Vonie and drop-shipping roasting company, Trade
Erika Vonie: Thank you all for coming out. Welcome to Customer Desire along Roast Degree. What do Specialty Consumers Actually Want from Us? A very wordy title that essentially, is just going to show you the first year of Trade, which is the coffee company that I work for and the data that we've collected based off of customer feedback. So yeah, because I am a former Barista competitor I'm going to hit time. For those of you that don't know me, my name is Erika Vonie. I have worked in coffee for a very long time, 13 years. I started as a barista when I was 18 and I worked bar shifts pretty consistently for the next 11 years. Within that, I was also an educator, a green buyer. I implemented and ran a QC program, competed off and on for years. I won coffee masters in New York in 2017 I achieved my Q Arabica certification in October of 2016. I have coached competitors, new ones, US barista champions and I've worked in green coffee sales for an importer and the reason why I ran down my CV for you, is a nice little intro, but also to let you know that all of these customer-facing aspects, whether it be green coffee, whether it be working bar shifts have primed me for my role as director of coffee at Trade.
Trade is an online marketplace that represents 52 specialty coffee roasters that drop ships roasted to order coffee across the entire country. Trade is a marketplace that connects consumers to specialty coffee, and what we're seeing is oftentimes it is their very first intro to specialty. For Consumers Trades catalog of 454 as of 11 a.m. this morning, 54 coffees rotate seasonally, and they offer a variety of personalized fit and freshness. For roasters Trades e-commerce, logistic software and consumer marketing funnel offer roasters scalable access to consumers who are a) variety hungry and b) dispersed across both urban and suburban parts of the U. S. Our customers find value in our personalization quiz that matches them to a coffee they will love as well as the vastness of their catalog, which we have 454 coffees on from 52 roasters. A very impressive amount of coffee to be able to sift through. So, Trade's company mission is to turn coffee drinkers into coffee lovers and it's a really nice echo of my own personal ethos, which is that I believe that specialty coffee can be for everyone because there is a coffee out there for every coffee drinker.
What you're about to see that I show you helps prove a little bit of that. We have been able to pursue this mission as a company due to support of investors, which includes Pete's, which is a JAB company. It's our job to connect specialty to a new universe of consumers, and our investors have been instrumental in allowing that to happen. Trade is my very first venture into e-commerce and to say that I'm learning a lot is a very big understatement. As someone who's worked in customer-facing aspects of coffee for over a decade I'm learning more about who these customers actually are than I ever have before and a lot of that is because we let the data that we collect drive our pursuit of the mission allowing feedback in sales guide all of the actions that we take. Because it all exists online the imprint is digital and can be followed along rather objectively. However, we have an amazing customer experience team that actually does get to talk to our customers, and we interact with them and listen to their feedback in a way that adds and supports anecdotal evidence to all of the objective data that we collect. In that way, it's different than the kinds of customer interactions I had while working bar, but very similar in the trends of customer preference that I've seen throughout the years. I've kind of been saying what this lecture has been about for a few years now, but I finally have numbers to be able to back up all of these things that I've been saying. 7
:20 Specialty coffee drinkers are very diverse and often do not conform to our expectations. Many value simple flavor descriptors
Erika Vonie: The fact that I get to know so much more about who the specialty coffee consumer is, is one of the most insightful parts of working at Trade, and it's why I wanted to make a lecture titled What do Coffee Customers Actually Want from Us? So, before we get there, I want to share a quote with you from Carl Sagan, one of my favorite people and it's a quote that I use all the time to remind myself of the bigger picture. "If you wish to make an apple pie from scratch, you must first invent the universe."So, what does this specially coffee universe look like specifically the at home coffee consumer? I'm sorry for the look of this next slide.
Heather Ward: Erika has a slide titled "Market Breakdown" that shows in what locations coffee is consumed the most. 15% of the time, it's in coffee shops. 13% At Home, 6% in restaurants, 5% in convenience stores, 4% at the workplace, 1% in bakery-cafes and other places.
Erika Vonie: but as it looks right now, the specialty coffee universe looks to be about US$44 billion. The information I'm about to share with you comes from a mosaic of different data collection avenues. So Trade focuses specifically on home consumption, and we know that customers are going to retreat from larger grocery store brands in huge numbers and are going to be looking for brands with stories, flavors and offerings that speak directly to their needs and we're seeing that manifests itself in vast amounts of variety and it's been Trades mission to bring what's amazing about specialty to as many consumers as possible, and we're seeing the biggest opportunities to be reaching and accessing these types of customers specifically. Not only is their slice of the pie larger, it's been tried and true tested that people will pay a little bit more if you can guarantee them an outcome that is something exceptionally better. It's still important to know who these customers are in order to create a product for them. Doing that has proven immeasurably difficult because there are literally dozens of different types of coffee drinkers. The majority of feedback we see, it can easily be defined into one type of coffee drinker or one type of expertise. So, how do we talk to customers who have such a hard and fast belief that their beliefs are facts about coffee when really, it's just personal preference? Who are these customers? We've been able to produce a bunch of customer surveys to better understand who these customers are.
Heather Ward: Erika’s slide shows a mouse hovering over four options in an online survey. The survey is titled "what is your coffee experience level?" and the options are "I’m pretty new to all of this," "I’m at an intermediate stage," "I’m pretty advanced," and “I’m a total coffee nerd." On the right is a screengrab from Google Maps of Brooklyn, New York along with a picture from inside an apartment building with a view of the Manhattan Bridge.
Erika Vonie: Now, by and large specialty thinks that our consumer looks like this. They identify as pretty advanced or a total coffee nerd. They live in Dumbo in a high rise overlooking the bridges leading into Manhattan. They definitely love specialty coffee and they identify as an enthusiast. This is kind of who we are, right. So, we see this as the customers that we're reaching and while we do have plenty of customers that identified just like this, we also have plenty of customers who look like this. who also self-identify as pretty advanced or total coffee nerd…
Heather Ward: Eliza's screengrab is replaced with a two story suburban home 40 miles north of Cincinnati.
Erika Vonie: but they're in the middle of nowhere in West Chester, Ohio. That's not a dis on West Chester Ohio but they still have the same exact reaction to specialty coffee the way that the other consumers that we generally think our customers look like. They live in a house two and 1/2 baths. We got the Zillow estimate of like what their house costs, so we have plenty of these customers as well. So, by way of example, we've broken out two very common customers from a large number of customer surveys in feedback that we've gotten.
So, let's look at Lauren. Lauren is a real person. Lauren is not her name, nor does she look like a two-pixel person, but she does live in Apex, North Carolina. She owns her four-bedroom house. She is the buyer of coffee for her family. She's been making coffee for herself seven days a week for about 14 years and she owns in Mr. Coffee Classic 10 Cup, which is a US$55 coffee maker. As we can see, Laurens brand affinities, she likes Amazon, so there's some cheaper things that she likes. She likes price value and accessibility, but she'll still spring for an iPhone. She'll still take her kids to Walt Disney. She drives a Passat. She likes yoga, and she has an extremely limited knowledge of specialty coffee. She might have noticed a counterculture in Raleigh the last time that she was there, but she still identifies as a specialty coffee drinker. She is one of our customers.
Xander is someone that we actually see a little bit more often, and Xander is someone that we also kind of think is our customer more often than not. He's 29 he rents a two bedroom house in Minnetonka, Minnesota. He makes $US70,000 a year. He makes coffee in his Black & Decker 8 Cup, which is a US$40 machine every morning. His specialty knowledge is not really specialty as we know it. He thinks of Starbucks espresso as specialty, but he still identifies as a specialty coffee drinker, and he still purchases from specialty coffee roasters on Trade. So, in order to talk to these customers better, knowing what their level of expertise is and how they self-identify being kind of a bigger delta between what we identify is an expert we want to switch up the language in which we talk to customers.While we in this room talk about a bright, single-origin with a lot of acidity, the words bright, single-origin, and acidity to many coffee customers, including Lauren and Xander, might be very difficult to grasp and understand. So, this led to Trade creating taste types, which isn't a way to reinvent the wheel but is a way to introduce the wheel to specialty customers especially those who are new. We wanted a way to speak to every customer in their level of expertise or perceived expertise in a way that encapsulates what they'll experience with the coffee they're about to drink. I'm very proud to say that this has given me incredible success at reaching customers beyond the barrier of entry for specialty but sometimes it doesn't work.
This is a real email that we received on our customer service team. I'm going to read it out loud to you because it is one of my favorite things I've ever gotten.
"Hi, Rachel. Terms like tasty types, funky and fruity, sweet and smooth, and comforting and rich sound like children's candy flavors. Is your site for kindergartners? Talk about dumb down - these terms tell me almost nothing about the coffee. Acidity is so basic to descriptions about coffee. A benefit to using a term like acidity is that it has a well-defined meaning unlike Ghazi, puerile terms like tasty types, funky and fruity. Why would I care about the roasters relationship with that particular farmer? What I care about is the taste of the coffee, not whether the roaster sits down to coffee with a farmer. Here we've completely, completely lost interest. We're going to look elsewhere. Sincerely, Karen."
To Rachel's credit, she handled this fantastically. I am so proud of Rachel for the way that she handled this, but we can see that Karen is not too happy with the way that we've decided to talk about coffees. But we also see within Karen's displeasure that she doesn't care about roaster relationships with farmers so it's kind of hard to pinpoint exactly what it is about specialty she wants to buy into. But luckily, not every customer we interact with is a Karen. We get positive feedback from people who say the selections of our custom curated from your unmatched I wouldn't be able to find these coffees anywhere else. The copy was on point with how I like my coffee dark with a chocolate finish. Very basic, very accessible terminology true to its description down here. So, the customers that really buy into taste types and understand them like the fact that they're simple and accessible and easy to access.
So, every customer also has a different expectation of what they need met. Coffees with acidity, fast shipping time, price within their budget with extensive farmer details, no farmer details, full transparency, literal flavor notes, and I could kind of just fill out the rest of the hour talking about all the different things that our customers want to have met. In all honesty, there are many different kinds of customer expectations, as there are types of coffee in this industry today.
15:30 How Trade creates easy-to-understand flavor groups and which are the most popular amongst their customers
Erika Vonie: So, we see with alarming certainty that while there are many different ways to meet customer expectation, the one thing that they want the most is variety. They want the entire world as their oyster, and they don't want to stick to the same coffee over and over and over again. With 52 roasters and 454 coffees at their choosing, it can be very hard to navigate, which is why our personalization quiz helps guide them to coffees that we understand that they will like. In order to help further this as a baseline for understanding this is actually where taste types come into play. So, taste types take a categorization of coffee again, for example, a challenging single-origin with high perceived acidity and distills it down into a two-word experience, citrusy and tart. If I say citrusy and tart to this room, pretty sure we all know what to expect that cup of coffee to taste like.So, we've developed 14 different tastes types, and two of them are fallible, deep and rich, which are dark espresso blends and crisp and bright, which are bright, seasonal blends. We just don't happen to see very many coffees submitted by roasters for these taste types, which is why they're the smallest slippers. We're a little presumptuous when we were making these and not everything works, and so that taught us that those two things don't work but luckily, the other 12 taste types really do work. So, let me run through them real quick to catch everyone up to speed.
Balanced and Fruity is what we define signature house blends that encapsulate roasters' signature styles. Revelators Petunias, Intelligentsia’s Frequency, Huckleberry’s Phantom Limb.
Sweet and Smooth is what we call medium roasted blends like Time and Temperature from Tandem, Inkwell from Quills, or Two Bridges from Oren’s Daily Roast.
Comforting and Rich or what we call medium-dark roasted blends like Equator’s Equator Blend, La Colombe's Lyon, and Onyx's Eclipse.
Roasty and Smoky which are blends that have reached second crack and are expressing oil. Like Doma's Virgil’s Organic Blend, Irving Farms Gotham, and Metric's Federal Motor 1200cc, which is the darkest coffee I've ever tasted in my entire life.
Citrusy and Tart, my favorite that I keep using as an example, a challenging single-origin with high amounts of perceived acidity, like Siteglass’ Kenya, Atomic's Ethiopia Halo Bariti, and Panther’s Finca La Ilusión.
Chocolatey and Sweet, approachable single origins with a predominant note of chocolate. Like Gimme’s Honduras, Parlor's Peru and George Howell's Tarrazu.
Subtle and Delicate, single origins with soft tea-like characteristics like Mad Cap's Rwanda Kanzu, Verve's Santa Clara, or Temple’s Ethiopia Gora Kone.
Fruity and Crisp, natural process coffees with perceived acidity, honey processes or experimental processes like Passengers’ Gesha Village, Passion Houses’ Lucy in the Sky, or Metric’s Honduras.
Funky and Fruity, natural process coffees with classic natural flavor profiles. PT’s Tasta Natural, Caffe Vita's Sumatra Gayo, or Bird Rock's Natural Pacamara.
Sweet and Inviting, approachable single origins with predominant notes of nut, caramel, and fruit. Like Joe's La Familia Guarnizo, Dune's Peru, or Máquina’s Peru as well. It's Peru season after all, so we got a lot of Perus on the slides.
Syrupy and Smooth are coffees that have been marketed as espresso regardless of variety, origin or roast profile like Dogwood’s Bear Hug Espresso, Boxcar’s Stella or Airship’s Black Apple.
Sweet and Tart. Single origins with a balance of sweetness and acidity, like Merit’s Andino, AKA's La Pia, or Ritual’s Los Gigantes.So, to categorize these coffees, myself and two exceptional coffee experts, professionals in New York, Maciej Kasperowicz, former green buyer for Gregory’s, and current free agent. You can find him at the Atlas booth and then he's also working on the expo floor on Sunday. Someone please snag him for a full-time job and Kayla Baird, long-time Joe Pro Shop barista and educator. She's also here this weekend. I think she's working at La Marzocco. Anybody wants to offer her a job, go ahead and do it. We cup on a proprietary form to categorize coffees using these taste types so our customers can access and understand the coffees. Ezra Baker in the middle was also an instrumental member of our initial QC team, and I cannot reference the QC process at Trade without giving him necessary recognition. We all have personal preference. Maciej likes coffees from Burundi, Kayla likes coffees that taste like candy bars, and I like the really weird challenging stuff that I have to sit with and go like what is that, pickle kumquat?
So, just like the industry dictates, we remove our personal bias and objectively categories These coffees based off of those two word descriptors that helping capsule a coffee the best that we can. Specialty is actually an industry with many definitions, and I guarantee you that if we all had to submit our definition of what specialty coffee is, we'd have something that represents more of like a word cloud than an actual word for word definition of what it is. Like this definition from Ric Reinhardt from SCA news in March 2017. The SCAA now SCA, it's 2017 after all, defined specialty in its green stages as coffee that is free of primary defects, has no quakers, is properly size and dried, presents in the cup free faults and taints and his distinctive attributes. In practical terms, this means that the coffee must be able to pass aspect grading and cupping tests. As we all know, this also manifests itself onto the SCA cupping form as coffees that have been grated above 80 or above.So, it's technically that definition right here with coffees that score 80 and higher on the 100 point scale. It could also mean that coffee is grown in a micro-climate. Some people also think that it has to do with the type of roast it undergoes or how expertly it's brewed, and this right there is where the definition gets muddy. But at the core of it, specialty coffee is a coffee free of primary defects that supports the supply chain that it comes from. So, to that end, what happens to the 80 to 85 point coffees that generally get forgotten? Coffee's on that lower end are still specialty and still benefit from the supply chain and they still have a home within our industry. It's sometimes very hard for us to admit that things that can be perceived as good when we have a point scale and taste buds that tell us otherwise. However, we're a room of self-appointed experts who have tried for as long as I've been in this industry to convince customers to level up to where we are, instead of reaching out to meet them halfway or even the full way to where their understanding of what good is. Good when it comes to preference is a subjective term. Good to us, and this 100 point scale is something else entirely. No one, including everyone in this room, was born an expert who understands the time, effort and energy it takes to appreciate the deliciousness of a 90 point coffee and that's something that we, as an industry, have disconnected with. We forget that we pretty much all started by drinking coffee that is oftentimes introduced to us by a family member that we poured milk and sugar into because that was the only way it was palatable to us and we forget that many of our customers still drink coffee this way and still want coffee that befits the ritual and not pushed into a coffee that tastes best when drunk black, even though plenty of customers do.
Heather Ward: Erika has a pie chart titled ‘most popular preferences’. The largest slice is "black" at 42%, then 30% with milk or cream, 23% with both, and 5% with sugar or sweetener.
Erika Vonie: But we can see that it's almost split right down the middle. Customers that prefer black coffees, also the customers that prefer coffees that have had something added to it. Now, it wasn't that long ago that we were making fun of customers for adding milk to their coffee and because of that, we've been mocked and made fun of by the general coffee consumers because we use vocabulary that acts as a barrier. We, as an industry have swayed so far into the light roast and underdeveloped coffee trend that we, by and large, have shunned developed coffees and by proxy the customers that drink them and identify with them as being good.
Heather Ward: Erika’s new pie chart is titled "Most Popular Roast Levels." The largest slice is Medium Roast at 46%, followed by Dark Roast at 31%, and Light Roast at 23%.
Erika Vonie: This is an actual breakdown of the amount of coffees that we sell by roast profile on Trade. Now, before anybody starts getting upset, acting like Trade a shell for dark roast commodity coffees, we're not. All of our roasters purchase 80 plus coffee's and are classified as specialty coffee roasters and interact with the specialty supply chain. I just showed you 32 of the roasters that are on the platform. Here they are again with the other 20.You have probably taken classes from our best-selling roasters, seen them win awards in various competitions they compete in and learn from them as they climb the industry ladders to become leaders in our industry. I am talking about specialty and I am talking about the specialty coffee consumer. This is not commodity. These are roasters and I'm talking about our customers.
Heather Ward: Erika’s new pie chart is titled "Active SKU Assortment on Site" and shows all the coffee flavor grouping she mentioned earlier. The top five most popular flavors roasters offer are "balanced and fruity," "smooth and sweet," "comforting and rich," "syrupy and smooth," "sweet and tart."
Erika Vonie: This is an active product listing of all the coffees we offer on site by taste type. Now I think this is a very important part of the lecture to tell you I'm not trying to indoctrinate any of you into the trade model. This is the way that I have been collecting data in the language with which I'm talking to my customers, our customers and the data that I have access with and share with you. So, if it's any easier to reverse engineer this, please note that I were when I refer to citrusy and tart coffees, I'm talking about challenging single origins with lots of perceived acidity. So, as you can see, we have a healthy range of single origins, a few blends, a decent amount of espressos. Balanced and fruity, starting at 12 and then cycling around right there. Now, let's look at the sales of these exact same taste types side by side.
Heather Ward: Erika now has now added a second pie chart next to the "SKU by Taste Type" pie chart. This new chart is called "Sales by Taste Type" and the top five best-selling flavors are Smooth and Sweet, Roasty and Smoky, Comforting and Rich, Sweet and Inviting, and Balanced and Fruity.
Erika Vonie: There are a few immediate takeaways, one being the huge increase of the first four taste types Balanced and Fruity, Sweet and Smooth, Comforting and Rich, and Roasty and Smoky. Balanced and Fruity again is a medium roasted signature house blend, Sweetened and Smooth is a medium roast blend, Comforting and Rich is medium-dark, and Roasty and Smoky is exactly what it sounds like. Now, I can kind of feel a little bit of tension, and everyone here about Roasty and Smoky being presented as a high scoring or high purchase coffee. So, let's start there. I myself do not prefer roasty and smoky coffees. The QC team lovingly refers to them as sweaty buddies, and we break apart the nuances that we can find within them if they are there. Well, it's not our cup of coffee per se. It's truly not about us. It's what the customer wants and if we can see that the customers want this taste type. One-twentieth of every coffee that's on our site is a roasty and smoky coffee, but one out of six sold is a roasty and smoky. That's a pretty big disconnect right there and our customers are telling us they want roasty and smoky coffees when we have so few of them, and the proof is in our sales. They are our second largest selling taste type.Now, I would rather give these two adorable human beings Terry and Rebecca from DOMA, DOMA stands for their two kids, Dominic and Marco. They live in Post Falls, Idaho. They are a roaster on our platform. I'd rather give them sales of coffees that have been pushed to second crack. One of their best-selling coffees, which is Roasty and Smoky, is Virgil's and I'd rather give them customers and money for them to put back into their supply chain rather than let those customers leave us and go buy something at the grocery store that kind of reflects the same thing. Specialty can already be prohibitively expensive for some customers, which is why they do shop at grocery stores and luckily, there's a correlation between the price points of these coffees and the point scale that they get because coffees that are 80 to 85 generally, even though they get a premium on top of a C market price generally are bought lower for a lower price than higher, expensive, more scoring coffees.
So, let's talk about price for a very quick second. So, as we can see customers that say, I'm pretty new to this or I'm at an intermediate stage, have a myriad of expectations for us. There are 5 out of tens, 8 out of tens, 6 out of tens, 3 out of tens but a lot of these negative scores are coming from the prohibitive price point of entering into our industry. These customers are exactly the type of customers that buy roasty and smoky taste types. The cost is lower because the quality of coffee is within that range and they're very familiar with the flavor profiles of the coffees they already purchase. Well, I don't have anything up here that relates to customer feedback. We actually hear a lot of misinformation from our customers saying that, "Oh, this coffee doesn't have any oil on it, so it must not be fresh." There is a huge marketing high out there that oily coffee is what's fresh, and we've talked to a couple of customers about this, and they literally think, and this is so beautiful. It's such a beautiful insight into these customers. They are familiar with roasting vegetables or roasting seeds, so they think of roasting coffee as pouring oil over the green beans and shoving them in an oven and roasting them that way. They don't even know what a roaster the person is versus what a roaster the machine is.
So, this is where that disconnect comes from, so they need something when we talk to them about this and we reach them about this with no bias, no barrier for entry. So, meet them where they understand this and that's really what makes specialty special. The incredible variety of roast profiles, brands, and stories along the supply chain. Customers want those stories. They want to know what roasting coffee is. They want to know that it's not on a pan with a bunch of oil shoved into an oven. When they see roasters at your shop in the cafe and they think, Oh, can I heat up my banana bread on that? And then you're able to say no, this is what it is. They want to know because they feel like they're being brought into this fold and they are. The more that they know, the more they're brought into this fold and that's what makes everyone in this room unique and what makes us relevant and powerful as a group. We should take opportunities like this here at SCA to make sure that we continue to embrace this and the new customers that we're reaching with specialty.
So, the sweet and smooth taste type is actually the best-selling of all of the darker SKUs. It's classified as a medium roast. It's the actual doorway to specialty for many customers because of accessible flavor notes and words they recognize like medium, blend and sweet. These are all words that are accessible within everyone's flavor dictionaries, even those who are not lifelong professionals. So, this exact line of thinking is why I believe our best-selling single-origin taste type which is this purple guy right there is the sweet and inviting taste type. We originally had all single origins with accessible flavor notes classified in the chocolaty and sweet taste type, which still exists but recognizing the fallibility that not all approachable single origins actually do taste like chocolate broke this sweet, inviting taste type out. Sweet and inviting coffees have predominant notes of nut, fruit or caramel, and they are sweet, easy sippers that don't make you work that hard. As a reminder sweet, inviting, nut caramel and fruit are all words and accessible flavor profiles that we all have in our dictionaries, whether we're professionals or not.
Again, customers have told us for the dollars that they spend, that the coffees that they enjoy by and large have more development than the ones we in this room like best or performs best on a competition stage. 99.9% of our customers are not USBC judges or professional cuppers. They want something familiar and accessible. So, the question that I posit now is if we are so concerned with how to nuance roasts to pull out the absolute best attributes of green coffee, sometimes by and large falling short and not fully developing those coffees, why have we not looked into the nuance that development and beautifully blended coffee can be. Now, I'm not saying no one does this. Clearly, as you can see by our sales, they do but industry-wide we don't put emphasis on it. As an industry, we don't focus on nuanced development or beautiful blending. I've tasted absolutely amazing medium-dark to dark roasted coffee that have character and nuance to them. It's also what our customers are telling us they want. Since implementing a darker roasted subscription at Trade, we're seeing that over 1/3 of our customers have bought into this program.
Heather Ward: Erika has a graph showing the popularity of "a la carte" and subscription sales at Trade. The point to note is that when they introduced the darker roasted subscription coffee, it became the most popular product in their range.
Erika Vonie: What this graph doesn't tell or show you is that Trade is growing at a remarkably rapid rate. Thanks to our extensive marketing reach and this influx of customers into this program hasn't actually cannibalized our other offerings. Instead, we open a door for new customers to come in and start testing the specialty water in this and that darker roast subscription is actually where they enter. It grew rapidly from December 16th from when we implemented it to the beginning of March. We now went from 0 to 43% of our customers buying into this subscription type in these types of coffees. I'm about to show you one my favorite slides, What we're seeing at Trade, and what I see as an incredible possibility is about 30 to 40% of customers that start in those introductory darker roasted taste types level up into a single origin, pour overs or more nuanced coffees that we all know, love and cherish.This is Nick. Nick is our head of product, and Nick, this is the most perfect picture of Nick possible because I can hear his laugh looking at this. When I came on to Trade in July, he was a self-proclaimed newbie. He was constantly like, "Well, I don't know as much as you do. I don't know. I don't know, I don't know." But he did know that he liked naturals and he had really only learned about specialty coffee when he started beginning the steps of creating Trade. So, in the few months before that from no information to a little information to when I joined in July, he knew he liked naturals because they were weird, had a lot of sugar. They tasted like nothing he had ever tasted before and as of two weeks ago, he tried Passengers Hacienda la Esmeralda which is a $60 bag of coffee for 10 ounces and literally put, proclaimed it life changing.He got so excited when they came in for QC, I pulled him into the QC room, we tasted them, and he was just losing his mind. As soon as it went live. He bought it on the site. He's like, I flash chilled it. He's so into it, and it took less than a year. But where he started were those introductory coffees and the aspects of coffee in the way that we talk about them that are familiar. We entered Nick into our supply chain in our industry by showing him something that was familiar and that tasted good and in about 10 months he was talking about flash chilling a $60 coffee. So, not everyone is a Nick, unfortunately, but we do see about 30 to 40% of our customers act like Nick. It's more the customers that understand and buy into our ethos and supply chain than ever did before and it's because there is a door that's been opened and reaching out to them with language that's familiar to what they know and already understand. We didn't use language as a barrier for entry.
35:30 How specialty coffee should bring more people into the fold by embracing dark-roasted coffees
Erika Vonie: So, in conclusion, we have to start changing our thinking of how we create coffee now. In every consumer packaged goods industry, especially with foods in the last 10 years, trends start in L. A, New York, San Francisco, gain traction in a few rich geographies and then explode like wildfire across the whole country. Please look at Kombucha, IPAs, quinoa, Organic Pet Food. We feel that specialty is right up against an inflection point, and it's important that you in this room are armed with this information to understand what consumers are going to demand as the thing that makes us special, more popular. Our customers are varied and vast. They have multiple expectations of what coffee can be, and they're reticent to learning and understanding unless there's something familiar that they can enter in with. Whatever they like is good to them. Most of them don't even know that a point scale exists for grading coffees. What they like is good, and they don't think that they're wrong.
Just like Sagan said. "In order to bake an apple pie, you must first create the universe," and the universe to many coffee drinkers is medium-dark, exists in Middle America and is varied with many different options available. Our customers are also not who we think they look like. These are all ambassadors on Trade on social media and the pictures taken here are taken from our tagged photos on Instagram. Historically, specialty coffee has catered to college-educated, single, white male audiences, and we know from extensive research that we have women who purchase for the home, families who live in Middle America and humans of all racial backgrounds who want to drink good coffee. It supports my ethos that specialty coffee can be for everyone, every taste profile, every background and every walk of life. In order to welcome new customers into the fold, we have to have products that speak to them.
So, how do we give them what they want at a price point that allows them to enter into our supply chain? One avenue is lower scoring point coffees. Coffees that benefit from extended development that connect beautifully in a blend that end up opening the door for new customers by being something familiar. This ends up with more customers for the roaster, which is more money at the roaster level. This reaches a larger audience and with it a percentage of customers who level up into more nuanced coffees and fully buy into our supply chain. With more money helping roasters expand their businesses they can support their employees, communities and purchase some more of those shiny, special, higher-scoring coffees that we all know in love in this room. What does this do for professional development for roasters? As an industry, we don't really explore the dark side. We, by and large, shun it. What does it mean to expand our ideas of what is good and who are we speaking to? Who is speaking with their dollars? We can continue to learn and grow and create really unique and special dark roasts for these customers.
We need to start giving dark roast the attention and care that we have for under development and light roasts, because our customers are asking for it and they're asking for it now. This is going to come in handy as coffee gets more and more scarce. We have to be entirely realistic about the future of specialty. Half of all available land for growing coffee will be unable to support farming by the year 2050 which is also when global consumption is expected to have doubled. The reality of the situation is that higher scoring point coffees will die off faster and in more numbers than their lower scoring counterparts. The higher scoring coffees that do stick around will be so rare that they will be more expensive than the average consumer can justify. That we already here plenty of complaints about paying $4 for a cup of drip coffee. These customers are not going to pay more. They just won't.So, we need to start creating a nuanced and delicious option for the customers that haven't shown up yet. The customers that are doubling consumption by 2050. We have to give our producers, 70% of them are smallholder and family-owned farms of less than two hectares or less, a chance to continue to make money, a longer supply chain to prove to them that we still care, and we have to start doing that now. 2050 is still aways away and the implementation of these ideas now will make a difference then. It's important to support our producers, our local communities and our employees. Our customers are telling us this with their dollars, that they already want this and that this is an entrance way into our industry and our supply chain. Thank you.
40:00 Audience Questions
Erika Vonie: For those of you who couldn't hear the question was, how do we continue the two thoughtfully buy these coffees that score lower on the point scale without actually slipping back into commodity while still maintaining true to our values and I think it's a really good question because I think part of what it is, is we already have relationships with the producers that we buy from and we already know that we have to pass on certain things from them. Even though it might have been a hard harvest, they may have been hit by a myriad of climate changes, whatever the reason for their quality to have dropped it's still someone that we know. So, we can rely on the supply chain to really come into effect and make sure that the coffees that we're paying for are actually being bought at higher than the C market price and back on that slide where the definition of specialty gets muddy when we talk about whether or not it's Karen roasting or expertly brewed, I think that makes a big part in what specialty is. I think that specialty as an industry right now is so well educated on the barista side, not necessarily a roaster side for the dark roasted specifically that we can make up in those quality price points or in those quality points by letting our baristas start to shine. We can start developing things that taste good at lower price points and lower scoring points and teaching our baristas how to make that a special experience for people. So, as long as we're still purchasing from the people that we already honor with our supply chain and ensuring them that they will have safety in revenue while we're like nuancing this I don't think that we necessarily just have to jump ship and be cooling them by 75 and that's it, or I'm going to negotiate a 79 so I can underscore you on that 80. I think that 79, 80 and 81 point range is really, really interesting because if something is at 79 points and you just refuse to give it an 80 so you don't have to pay that premium amount on top of it. Pay the premium, give them 80 and just bring it in because it just helps further along what customers are looking for and ensuring that the supply chain stays strong.
Heather Ward: A member of the audience is now asking about natural coffees.
Erika Vonie: Yeah, I think one of our weapons that we have in our back pockets are naturals. Tossing out a natural into a blend, especially if you roast it on its own and then post-roast blend, you can really define those super sweet or those really done sugars and really make sure that that blend has that nice, sweet component to it. The more dense the coffee is, the more sugars that there are, the more that it takes to development. So, you get a really funky natural that you're like well, I don't want to serve this on its own. One customer in a day is going to purchase this. You can use those sugars in that development to your benefit in a blend to pump up that candy-like sweetness I guess to make sure that if you're buying something that has kind of a dry or nutty taste that there is a nice sugar overarch that kind of elevates that entire blend. I've never roasted before, so any roasters out there feel free to tell me I'm wrong.
Heather Ward: A member of the audience is asking Erika to talk about the QC process and the relationship with farmers.
Erika Vonie: Yes. So, the team itself doesn't really have a whole lot of relationship to the farmers of the coffees that come in because we have more of a relationship to the roasters that are sending us those coffees but both of the people on the QC team have vast experience, they understand the supply chain, and they have both gone to countries of origin and visited, so their base is very firm. So, I affectionately refer to our QC form as the Fisher-Price cupping form because instead of having it be like a huge 100 point scale, it's really the delta between what the roasters are telling us the coffee tastes like, which are like apparitions of apricot and like the sound of trombones on a rainy day and actually translating that into oh, this tastes like a Snickers bar. So, I can't show you what the QC form is because it's proprietary but it's a really easy way and the whole entire purpose of it is to not grade or score those coffees, but to figure out how, yeah, exactly, to translate all of these very lofty roaster expectations or if a roaster says something is medium and it's actually very light finding out what through customer preferences and how we can market it in those taste type categories. We also QC every Tuesday if ever any of you are ever in New York, you want to come through, hang out. We always welcome guests.
Heather Ward: A member of the audience is asking how roasters react when Trade use flavors descriptors that the roasters themselves wouldn’t have chosen?
Erika Vonie: Usually very well. I have a very healthy conversation going with pretty much every roaster on our platform. So, when we implemented taste types, I did a lot of diligent work to make sure that they knew what it was that I was doing and as a way to be like not to say like, you're wrong. The customers that come through and buy Huckleberry will be buying Huckleberry because they want to buy Huckleberry and they know what their flavors are and what they mean. What we do is continually keep trying to tell the roasters that I'm reaching new customers for you that, by and large never known about specialty and don't understand the delineation between commodity and specialty. So, it's a way to just succinct down what they've all said and then also, if you go on the site and you click on any one of those coffees, it shows you what taste type it's in but then it also explains here are the actual flavor wheel triangulation notes that you'll taste. So, we take the flavors from the flavor wheel, which are already pretty accessible. So again, if someone tells us apparitions of apricot we can be stone fruit! So, that pops up, so our customers aren't just getting blanketed branding from us and what was the second question, the follow-up? Okay, and then the second question was how to customers differentiate within those certain taste types. Again, it's those flavor wheel triangulations. So, when a customer comes through our funnel and they answer a six-question quiz, they are met with a great match and that's not necessarily this is the best coffee for you but here's the web, sort of like a cube, four-dimensional box. You tell us you like this; you tell us you like this, here is the nebulous web of coffees that you'll probably like. So, there's brand recognition is very big for customers. We have a few national brands on our catalog. Stumptown, Intelligentsia, La Colombe. We see a lot of customers come in and recognize that and as their first coffee, I know what that is. I recognize that I've seen that before, and then when we recommend new coffees, it's like, oh, here's the variety and the expansion. What we see is actually a very big driving force for our customers is variety. They really want to be bouncing around and checking out. So, I had a sweet and inviting from DOMA. I'm going to go to check out a sweet and inviting from Joe and see how they compare.
Heather Ward: A member of the audience is asking how Erika translated her past experience with working in an e-commerce company and how the team around her is balanced between the coffee-side and the software-side.
Erika Vonie: That's a really good question. It was kind of trial by fire. I am still not very tech-savvy. I had to figure out, like, how to work a dongle to get this up on the screen. So, luckily, I am surrounded by experts, data scientists, front and back end engineers that know a lot of coffee very well. And luckily, they see me as the main person that comes from specialty. As director of coffee, I'm kind of the like, the flag holder for coffee within the office. My enthusiasm has helped people also get excited about it as well. If a new coffee comes in and I open it at my box and I like hoot and holler people like Nick are like, what did you get? So, our customer service team also pulls from a lot of experienced baristas. We have three people on customer service that have experience as baristas and then our roaster ops and relationship management person Luisa, who is incredible she also comes from a background of coffee as well. So, while I have the most experience and kind of the most accolades I'm still surrounded a little bit by people that come from the industry, but it's actually very much just how I got involved in coffee, I learned that there's a bunch of stuff to learn and all of my colleagues feel the same exact way. So, they bug me for questions. They want to show me a new coffee that they've got. We've created these things called sub personas, so they are buying coffees from the site, and they're kind of figuring out exactly what their tastes are as well. We've got one person on the team that only drinks decaf so every time I get a decaf in, I'm like, Matt and just toss it his way and so he can give me a lot of good feedback there about how decafs taste.
It's been really interesting. I'm learning a lot more about how companies work. My CEO is here and there was a point two months in where there was this passing comment where he was like, I'm sorry, we don't have a project manager and I was like what is that? Well, you mean we're not just supposed to wear every hat and just chug at every problem with full speed, what? So, it's been really interesting and luckily the fact that it has been a start-up in a small company that's grown and gotten a lot more excitement around coffee as it gets bigger. It kind of reflects a growing coffee company as well. We all take on way more than we need to or should or maybe even have expertise to do but the team has come together in a really, really beautiful way and I really like my job.
Heather Ward: A member of the audience is asking how seriously does Trade take the issue of freshness and what freshness statistics do they use in the business.
Erika Vonie: Pretty important, actually. So, the model is roasted to order. So, the roasters are not roasting the coffee until the customer places the order which brings up a lot of really interesting challenges when it comes to operations and logistics like when the roasters accept the order, how they fold it into their own e-commerce and their wholesale and their cafes. But our customers very much like this coffee was made for me and it ships out for me within X number of hours, and I get it within a week. That is very important and luckily we don't really see very. We don't see roasters tripping up on that very often at all. You know, every so often, if it's askew that if they're not doing it routinely, like throughout the week, every so often, we have seen like an old coffee sent but honestly, I haven't heard this complaint in about three months, so I think our roasters really understand that freshness is very important and we do also do a lot to educate our customer that just because of coffee might be a month old, doesn't mean you should throw it out. Coffee is good for a really long time. This whole it loses its sparkle in two weeks is true to a certain extent. A month and a month and a half old coffee that you buy from one of our roasters is still going to taste better than anything vacuum-sealed from the grocery store. Cool.
Well, feel free to stop me at any point. I have business cards if you want to get this. I'm sorry I didn't upload this, but I would be very happy to send this along to you, so thank you.
51:50 Outro
Heather Ward: That was Erika Vonie at Specialty Coffee Expo in April 2019. Remember to check our show notes for a full episode transcript of this lecture and a link to coffeeexpo.org for more information about this year’s event.This has been an episode of the SCA Podcast’s Expo Lecture Series, brought to you by the members of the Specialty Coffee Association, and supported by SAP’s Softengine Coffee One. Thanks for listening!
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