Before Gourmet Coffee Service was launched, my partners decided that Jon Fishman and I should fly to the Bay Area with one simple objective in mind – find a roaster who would provide us with a private label coffee. The year was 1994 and our mission turned out to be far from simple. We’ll get back to our adventure shortly…
Defining “private label”
Just to be clear, a private label coffee or other product is defined as an exclusive brand that is part of a company’s product line and not available to competitors.
An important part of the mix
Matthew Marsh, CEO and owner of First Class Vending and Coffee, recognized the need for a private label coffee and launched his Coffee Gods brand about a year ago. First Class, operating in Southern California and Nevada, rolled out several products under the brand. “We have a variety of quality levels available to our clients through our Coffee Gods brand,” said Marsh. “So far, we have been very successful in blind taste tests.”
Tom Steuber, president and owner of Associated Services in the San Francisco Bay Area has been private labeling coffee for over 30 years. “We think private label coffee is a very important part of the product mix for a coffee service company,” he said. “It should be a special value for your clients, priced just below other brands that you offer.”
Linda Saldana, vice president and co-founder of Seventh Wave Refreshments, just launched her Georgia-based company and a private label coffee at the same time. She said that private label coffee is important because it says a lot about an operator.
“When I go to market with something that I can say belongs to me, it shows some expertise, especially if you are able to provide a value-oriented product that people love," she said. "It shows that you care about your customers."
Benefits are clear to operators
Jarrad Duxbury, managing partner at Sonoran Coffee & Food Services in Northern Nevada, is taking a cautious approach to private label coffee. When he makes the move, he wants to do it right, with custom film packaging and a dedicated marketing effort.
“You have to be ready to dedicate resources to a brand — to market it correctly [and] to make sure you are delivering on what the value of that brand is supposed to be," Duxbury said. "You can pull the trigger on a private label too soon and end up shooting yourself and your brand in the foot."
Shawn Vargo, president of 3rd Coast Coffee Service in Ohio, is a firm believer in the benefits of private label coffee. “It is a great way to build a brand and yourself in a market area,” said Vargo, who has numerous products in his private label coffee line. “Private label is especially important in the Cleveland market, where there is a real push toward buying from local companies as opposed to national suppliers."
Delivering an experience
Corporate Essentials has sold private label coffee to their New York clients for over 20 years. “Private label is important in the traditional accounts,” said Joe Simonovich, the company’s chief growth officer. “We are positioning our premium private label products differently today, especially whole bean, which is being roasted by a notable local roaster.”
Corporate Essentials is exploring an increased use of private label products well beyond coffee.
“When you create a good private label coffee and it is being sold in a location with other private label products from us — like four types of kettle chips and salads and they are all things that a competitor can't provide — that's delivering the Corporate Essentials experience," he said. "In that situation, true brand loyalty is established."
Back to the private label adventure
So, Jon and I are up in San Francisco trying to find a roaster who will deliver us a few private label coffees, and every roaster kept asking the same question: “How many pounds of coffee are you selling per month?”
“Well, none,” I would say.
“But we are going to sell a lot,” Jon would add. “We haven’t started up yet.”
At that point, they would generally look at us with bewilderment and show us the door.
Somehow, on that same trip, we found a roaster who decided to roast three private label coffees for us, with custom film. Three years later, we were indeed selling a lot of coffee and looking for a new roaster who could handle the volume.
The big payoff
Anyone who has developed a private label coffee knows exactly the moment when they realize that their coffee is a success. That moment happens when prospects start to ask for your private label coffee by name.
“It’s very nice when you get a call and a prospect says, 'I want that Seattle Blend you sell,'" said Robert Donohue, who runs Gourmet Coffee Service today. He sells that same private label product line that was launched with a little bit of luck during a very optimistic trip to the Bay Area in 1994 — a private label adventure that worked out well after all.