How to Market Coffee
Absolutely everything you need to sell your product
Absolutely everything you need to sell your product
In the last five years, I’ve been involved in over 572 product launches. That’s an average of two new products per week. Through trial by fire, I’ve learned what works, why, and how to get the most profit for your efforts.
My ‘How to Market’ series is dedicated to demystifying sales & marketing tactics for specific products. Today it’s coffee — but the lessons you’re about to learn can be copied and used across multiple products and niches.
The inspiration for this piece came from a local coffee business that tried to milk me (pun intended) for free advice by calling me and saying “how do I market my coffee then, mate?”… that was the first thing he said.
Hopefully, I’ll uncover some insight that you can apply to gain sales for your own businesses.
#1. What Are the Right Questions?
You have to start by asking the right questions about your product. These would be:
What is the product?
Does it have a USP (unique selling point)?
Who are my customers?
Is it B2C (business to consumer) or B2B (business to business) focused?
Where do my customers currently buy their coffee?
What is my cost of goods?
How does the raw cost of my product influence the retail price?
Do I need to adapt my retail strategy in order to justify the retail price?
What budget do I have to sell this product?
The answer to the first and second question is ‘coffee’ and ‘no, it doesn’t have a USP’. Coffee isn’t new and with an abundance of coffee products on the market, it certainly isn’t unique in any way.
You then have to decide if your brand is:
This identifier helps with the positioning of your product.
Let me elaborate…
Are you going to be the first nitro cold brew brand that’s infused with almond milk? This creates a USP.
Are you going to be the best quality beans, sourced ethically? This is choosing the positioning of ‘best.’
Are you going to be the cheapest Columbian beans, compared to all of your competitors? Obviously, this is creating a price-conscious product with ‘cheapest’ as the positioning.
The biggest mistake I see in the marketing of small or new businesses is that their positioning is trying to sell themselves as everything. Either by saying “our customers are everyone” or by inventing a nonsense USP with excessive adjectives.
For example, “we’re the first holistically-certified, veteran-owned, ethically-sourced, discount coffee brand in Utah.”
The more you describe your brand with detailed, qualifying statements, the more apparent it is that you’re selling nothing unique.
#2. Who and Why?
After you know what your product is, you’ll need to decide who’s going to buy it and why they’ll buy your coffee instead of the one they’re currently buying.
Depending on your unique selling point, or modest profit margin, these will have two different paths.
People who are likely to buy pre-mixed cans of nitro cold brew, infused with almond milk, are ‘on the go’. You are very unlikely to sell this kind of product in coffee shops. So don’t try.
Decide where those customers are going and why they’d likely buy yours over someone else’s.
Local sandwich shops, panini bars, and bakeries aren’t known for their coffee, but they do often have coffee machines, unbranded cups, and cold fridges that can carry your product. Think long and hard about all the different places it suits to sell your product. This does create a very clear path of penetration (not like that) into a sold B2B business model.
You focus on volume-selling. Getting stockists to carry your product and hope that the re-orders come in thick and fast.
Lavazza is a great example of this. Although they have a B2C part of their business, their B2B market penetration is widespread. You’ve seen their coffee everywhere because they’re focusing on volume, not [profit] margin.
In a B2C model, you could focus on selling cases of 24 cans on Amazon for workers to grab ’n’ go each morning. Or keep a delicious coffee in the office fridge for the mid-afternoon lull. All of this would be sold to them at retail price.
Minor Figures is a brand that does this in 12 packs and makes for a perfect summer treat over ice.
By leveraging Amazon’s platform, they’re encouraging large orders and repeat business from Amazon’s high-converting customers, while simultaneously creating brand awareness for those who want to shop directly from them via their e-commerce store… smart.
Remember though, when selling a relatively low-cost product like coffee, the secret to the sustainability of your business is volume. You need to sell a lot of a cheap item, to make a decent living.
Why is it best to focus on volume with a low retail price?
If you sell a coffee machine for $10,000 and it has a 50% profit margin, you only need one buyer per month to make a decent salary.
If you sell a bag of coffee for $10 and it has a 50% profit margin, you need 1,000 buyers per month to make the same salary.
Which do you think is easier?
This is why it’s so important to decide who your buyers are and where you’re likely to find them before you invest in creating your product.
#3. The Super-Easy Method
There was a children’s TV show called ‘Funnybones’ that started like this…
“In the dark dark town, there was a dark dark street.
In the dark dark street, there was a dark dark house.
In the dark dark house, there were dark dark stairs.
Down the dark dark stairs, there was a dark dark cellar —
In the dark dark cellar, some skeletons lived.”
That nostalgic journey perfectly illustrates how you find a niche of a niche.
Coffee is too broad an interest/niche to zero-in on potential buyers. You need to go down one level each time. Start with #1 and get more specific.
Identifying a specific niche
Coffee buyers who will spend money on quality
Coffee buyers who will spend money and are on the go
Coffee buyers who are young, busy professionals who have disposable income and aren’t afraid to spend it — and are on the go/active
Fitness enthusiasts, who love coffee and have a certain level of disposable income, but a lesser amount of disposable time
Can you see how we got more and more niche at each stage?
This brings us to a potential product in a potential niche, with a targeted buyer-base and a style that can help us promote the product.
“NITRO-FUEL: pre-workout coffee in a can” isn’t going to be for everyone, but it’s focused enough for you to know where to find your customers and how to effectively sell to them.
It can sell in gyms and sports nutrition stores and you can focus on your B2B model to shift volume and encourage re-orders. This will help with sourcing the MOQs (minimum order quantities) of your product.
#4. How Do I Get Rich Though?
Once you’ve decided who your coffee buyers are and which locations they’ll be likely to buy your product, you’ll need to decide what to price your product at, in order to correctly target that market.
Too low and you’re leaving profit on the table. Too high and you’ll struggle to convert customers.
I happily pay £7 ($9) for a bag of coffee each week. My mother wouldn’t even pay half that, it’s far too expensive for her. Everyone’s values are different.
The #1 issue I see with all new businesses or business ventures is owners who undervalue their product or don’t allow for enough profit margin.
Their costs are too high and they’re afraid to charge more than the supermarket, so they’ll work at 30% profit margins instead of 70%. Although noble, you’ll likely end up operating at a loss.
When you factor in shipping, damages, returns, promotions, discounts, advertising, and salaries, a 30% profit margin isn’t going to cut it.
Especially when customers expect a minimum of 5% to 15% discount, just for being ‘new’ to your business.
A business I love and use, Pact Coffee, goes for the positioning of ‘best’ and encourages customers to ‘subscribe’ for regular deliveries. Thus increasing their customer lifetime value and minimizing their ad spend.
They focus on selling different coffees to the same customers instead of the same coffees to different customers.
This approach for consumable products like food, beverages, and cosmetics, works like a charm — and further adds to the efficacy of your marketing.
You can earn more, with less.
#5. Promoting Your Product
Now you’ve got this far, you’ll be eager to sell your new coffee product. So how do you promote it?
Lavazza gives a free coffee machine to cafes if they sign in to an exclusive on Lavazza beans. They understand that coffee is consumable and they can lose money upfront in order to maximize their customer lifetime value with repeat coffee bean sales.
It’s a fantastic strategy for B2B sales.
Here are a few other ideas for those selling coffee:
Team up with third-party Amazon sellers to give free product samples, along with a coupon. Ensure your product is easily found on Amazon too.
Sponsor an event that suits the brand you’ve built. Set up a stall to sell your coffee there and gain fans.
Run contests for coffee-related paraphernalia, like machines, brewing kits, etc. on social media — collect email addresses to remarket your core product to. I’ve used KingSumo for this in the past.
Give independent gyms free fridge units that are stocked with your product on consignment. Charge them to refill and watch it fly.
Create pop-up shops and stalls to sell your coffee. Think train stations, stadiums, outdoor events, and corporate conventions.
Become a preferred product of a tea shop to provide an alternative, without competing against espresso coffee shops.
Run compelling ads targeted towards the buyers you’ve identified, or buyers of your closest competitors. Explain why your product is different or better.
Focus on mini-marts, corner stores, and independent stores to sell your product on ‘point of sale.’ Offer those business owners a better margin for giving your product valuable store real-estate.
Hopefully, these ideas will get your creative juices flowing — and you’ll have several more.
Lastly, I Want to Hear From You…
I want to make this a community-led series, so if you can respond below with your products or services I’ll happily pick one for the next installment of ‘How to Market’ and break down all of the ways you could sell your specific product, to help you choose the best one.