Are specialty coffee brands becoming more and more similar?
Around the world, specialty coffee consumption is on the rise. The National Coffee Association’s 2022 Spring National Coffee Data Trends Report stated that specialty coffee consumption is at a five-year high in the US. Moreover, in countries with fast-growing economies such as India and China, specialty coffee markets are growing at pace.
But as more and more specialty roasters and coffee shops open, the industry becomes more saturated by definition. This can make it more difficult for coffee brands to stand out and differentiate themselves from competitors.
Furthermore, with so many specialty coffee companies sharing similar values, are more of them a adopting similar marketing and branding strategies?
To learn more, I spoke with two marketing professionals in the coffee industry. Read on to find out what they told me.
You may also like our article on how specialty coffee can become more accessible.
What are the main design trends?
Design plays an important role in marketing and branding, particularly when it comes to coffee packaging. Research has shown that customers take into account numerous packaging design features – such as patterns, textures, colours, and fonts – when they purchase beans.
Over the past few years, coffee packaging designs have drastically changed, as fully customised coffee bags have become popular among roasters. Bright colours, bold typography, unusual bag structures, and different textures are all becoming more common across the specialty coffee sector.
Viry Ortiz is the Marketing Manager for Australian roaster ONA Coffee.
“Roasters are trying to maintain their own style,” she says. “There are so many design options now and so many types of packaging that everyone can have their own individual style.”
Euan Johnston is the Senior Brand Marketing Manager for Pact Coffee.
“This means brands have become increasingly sophisticated with their marketing techniques, so standing out with eye-catching labelling and communications is essential,” he explains.
A particular focus on typography is one of the main coffee packaging trends of 2022, according to Packaging Digest. Many specialty roasters are opting for more intricate and artistic fonts, as well as colour layering and including more textures on their bags to stand out.
Flat bottom bags and stand up pouches were two of the most popular bag structures in 2021. We also saw more packaging materials being used to differentiate further, such as kraft paper to create a more rustic and artisanal feel.
However, there are a number of other factors which specialty coffee brands must consider when designing their packaging, as Euan tells me.
“Speed and convenience are key for consumers, and specialty coffee brands also need to consider having robust packaging,” he explains. “But the main focus in packaging is sustainability.
“We launched our new 100% aluminium coffee pods last month. Aluminium is the most cost-effective material to recycle and it can be melted down to be used again and again.”
As part of the general push for more sustainable coffee, consumers are also demanding to know more information about where their coffee was grown and who produced it.
Packaging is a useful tool for displaying this information to customers, alongside other information such as the variety of the coffee and the processing technique used. The Specialty Coffee Association claims information on packaging is one of the three most effective methods of educating consumers.
“Consumers are recognising the more well-known coffee producers and farms,” Viry says. “They are also understanding more about processing and what kind of profile the coffee is going to have as a result of this processing.”
What’s more, information on packaging is a useful marketing tool. A 2011 study by the Department of Management at the Islamic Azad University concluded that consumers found packaging information more important than graphics when purchasing a product.
As well as this, fully customisable coffee packaging has become more popular to help roasters stand out. This ultimately means more roasters are using bright colours, bold fonts, and different bag structures.
Furthermore, the push for transparency is leading more and more roasters to include similar information on their coffee bags – meaning that packaging could be starting to look the same.
A growing focus on sustainability
As specialty coffee is marketed as a more premium product, roasters tend to pay above minimum prices. In many specialty coffee shops, this naturally leads to consumers paying higher prices per cup or bag of coffee.
However, consumers are generally more willing to pay higher prices for specialty coffee, as there is an ever-increasing consumer interest in higher-quality coffee (especially single origins).
So does this mean more and more roasters are capitalising on it as a marketing opportunity?
Research from GreenBiz shows that across 27 countries in 2020, an average 55% of millennials and 59% of Generation Z wanted to change their lifestyles to be more environmentally-friendly. This included the products they purchased, such as coffee.
Pact Coffee launched a sustainability-focused marketing campaign in September 2021 in the UK, Euan tells me.
“The sole focus of the ‘Make a Pact’ campaign was calling out the inequities of the coffee industry and having a call to action to fix them,” he says. “It’s been clear for some time that sustainability is a necessity for specialty coffee brands. It’s evident that consumers expect this and they are right to question a company’s sustainability credentials.”
According to Mintel’s Global New Products Database, almost half of all coffee product launches in 2020 carried some kind of ethical or environmental claim. Among many, these included certified carbon-neutral or negative coffees and higher prices paid to farmers.
This increase in the launches of sustainable coffee products is around double the number reported in 2012. Now more than ever, specialty coffee brands are marketing their products as more sustainable, as they are pushed to promote their sustainability efforts.
“I don’t think we can even really categorise sustainability as a marketing technique anymore,” Euan says. “It’s more of an ‘act now or be left behind’ mentality for coffee businesses.”
Is there pressure to conform?
Marketing strategies are generally used by competing brands as a way of standing out. However, in a strange twist, specialty coffee brands often feel a certain level of pressure to conform to some of them.
An anonymous specialty coffee brand marketing specialist highlights how sustainability has become one of the biggest necessities in specialty coffee marketing.
They say: “How could your brand not go green these days? Your branding has to incorporate sustainability because consumers want to purchase more ethically and environmentally-friendly products.”
Viry also believes that there is a significant pressure to conform to sustainability standards.
“Roasters are trying to be more sustainable and connect consumers to farmers,” she tells me. “They are telling more of the farmers’ stories when selling their coffees.”
This could mean that if specialty roasters or coffee shops are unable to provide more information on their sustainability practices, consumers – especially those who belong to younger demographics – could turn to other brands who are able to.
A survey from Hiroshima University in Japan found that people aged between 18 and 30 years old were more likely to pay a higher price for sustainable products, including coffee.
Are larger coffee companies following suit?
As the specialty coffee market grows, the wider coffee industry has increasingly started to adopt similar marketing and branding strategies in order to compete.
“Brands have to talk about something that consumers care about,” the marketing specialist tells me. “In order to be able to do that, they need to analyse and understand their target audience.”
Moreover, some larger coffee brands have acquired smaller coffee companies in order to enter specialty coffee markets. In late 2017, Nestlé acquired Blue Bottle, while JAB Holdings acquired the US roasters Stumptown and Intelligentsia.
Viry tells me how larger coffee chains have also started to focus on marketing higher-quality coffee.
“Starbucks launched its premium Reserve brand a few years ago,” she explains. “They noticed the consumer demand for more high-end coffee products.”
Marketed as a more premium coffee experience, there are only six Starbucks Reserve locations in the US, Europe, and East Asia, as opposed to the chain’s 32,000 regular locations in 80 countries.
Reserve locations have a focus on single origin coffees and the craft of roasting and brewing, rather than the more accessible “third place” concept that Starbucks helped to pioneer in the early 1990s.
Viry notes that much like with specialty coffee branding, other large coffee companies are also sharing more of the farmers’ stories as a marketing strategy.
“Nescafé and other big coffee brands are including more information about farmers on their packaging to bridge the gap between consumers and producers,” she tells me.
The effect on consumers
So, with many specialty coffee companies using similar marketing and branding techniques, how does this affect consumers’ purchasing decisions?
“Consumers can get bored and care less about the brands they are buying from,” the specialty coffee marketing specialist says. “Similar marketing strategies can make them feel like coffees cost similar amounts and that brands feel the same.”
Euan agrees, saying: “Specialty coffee brands which use similar marketing techniques will ultimately compete for the same audience.
“They will deliver the same message and have a near-identical brand narrative, so consumers could struggle to tell the difference between these brands,” he explains. “It’s vital to stand out.”
But how can specialty coffee brands do this?
“We regularly ask our customers what they think of our packaging designs through surveys and conversations at trade shows,” Euan tells me.
Ultimately, it’s about brand authenticity. Specialty roasters and coffee shops must be able to demonstrate to the consumer how their business is different from others in the industry.
Brand authenticity is generally broken down into four categories: continuity, credibility, integrity, and symbolism. Among other things, this means that consumers expect to see brands consistently and honestly showcasing their commitment to social, environmental, and ethical practices – including in the specialty coffee sector.
“Strong brands should never look to conform,” Euan concludes. “We strive to be radically different, but to also consider the needs and expectations of our customers.”
While it might seem like more and more specialty coffee brands have become more homogenous in recent years, there are also important questions about the pressure to conform in the industry and what it means.
Moreover, while authenticity and standing out are certainly important, it’s worth considering whether more brands becoming similar is a good thing. Ultimately, it could mean more people drinking better coffee, as well as a wider focus on sustainability among more coffee companies. If this happens, could it prove to be a beneficial shift for the rest of the supply chain? Only time will tell.
Enjoyed this? Then read our article on whether we need to redefine “specialty coffee”.
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