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Do you know what kind of coffee you want?

04/15/2021| Carlos Rodriguez| 10 min

IN A NUTSHELL:

Changes in the world of coffee provide interesting lessons for the development of brands that aim to create value.


THE GREAT STRATEGIC TAKEOUT:

The movement towards “premiumisation” of coffee has allowed some brands to transcend the product, generating a framework of spaces, services and experiences that raise the value proposition beyond the liquid itself.


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Why should I read this?

Because some more advanced audiences seek to establish quality relationships with brands that can meet the new demands of the contemporary consumer.

What are we talking about?

The origins of coffee are uncertain, although we know that humans have been consuming it for centuries. It is not surprising, therefore, that this drink has become part of our usual consumption patterns. This has served as a starting point for the birth of coffee brands that have sought to turn around our way of relating to the world of coffee.

Coffee experts point to different stages of development in the category. At first, as a “commoditised” commoditised good within an atomised and highly competitive market, it was a sales-oriented product, with an essentially functional approach. However, during the 1990s, the appearance of chains and franchises with a “lifestyle” approach to coffee (such as Starbucks), together with the appearance of coffee-makers for the home (such as Nespresso), led to considerable disruption in the sector. This was the “second wave of coffee,” in which trends such as the personalisation and customisation of drinks (with toppings and other extras) emerged.

It was not long before there was a reaction to this trend. This “banalisation”, as some considered it, was addressed by a third wave of brands, in this case smaller, artisanal producer, who tried to emphasise authenticity and enhance the consumer experience, focusing on the process of production, the quality of ingredients and the importance of social and environmental sustainability. Later, in the 2010s, this trend led to a fourth wave, characterised by hypersophistication and speciality coffee: certified quality coffee based on objective criteria agreed by the SCA. These were niche proposals aimed at a specialised, somewhat “nerdy” public, with a very scientific approach to coffee.

Now, with the arrival of the fifth wave of coffee, we are facing a turning point that brings together everything learned so far and provides a new approach to the business. We thus find “small brands,” such as Blue Bottle, which have been taken over by large groups, such as Nestlé. These brands make speciality coffee, but do not renounce the “lifestyle” approach. Nor are they limited to the product: they create spaces where coffee can be lived and experienced beyond the product itself (such as the consumer experience at Blue Bottle’s cafes or Starbucks Reserve). They also create additional services and new brand-customer relationships through a new focus on the channel and the development of DTC models, allowing them to diversify the business and respond to different purchasing motivations (such as contemporary convenience shopping).


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