March 29, 2012

Single Origin vs Blends

The specialty coffee market is forever evolving, and some of the buzz words at the moment are ‘single origin’. A lot of roasters and coffee outlets have either intoduced or are looking to introduce single origins into their coffee repertoire, but are struggling with where they fit in the scheme of things, versus the tried and tested concept of blended coffee.

There may be a few different interpretations going around of what single origin is exactly, but I like to refer to it as coffee that comes from a single known geographical origin and more specifically, a single farm. You can further break it down to single origin micro lot coffees, which derive from a single field on a farm. Blended coffee, on the other hand, is a combination of different single origin coffees mixed together. Generally, this is done to produce a better beverage than if the coffees were standalone – but this is not always the sole intention, and blending can be undertaken for a number of other reasons.

Let’s first look at the key reasons why a coffee roaster would blend coffee, instead of just using single origins:

• To produce a better and more well rounded coffee, by introducing other coffee origins to bolster weaker areas of the base coffee.

• To improve the profitability of the coffee offer. This should not necessarily be seen as a negative by the consumer. Some cheaper coffees can be ordinary on their own, but great when combined with other coffees that enhance that coffee’s weaker notes. Sure, there are less noble reasons to improve profitability, but let’s not focus on those. The Australian coffee market is highly milk based, so in many instances the highly prized specialty coffee will not suit your flat white or cappuccino drinker. You can produce some lower cost blends that will suit your target market better than higher costs ones. This makes good business sense and is one of the main advantages to blending coffee.

• To spread the risk of quality and supply issues. By using multiple coffee origins in a blend, there is less risk ongoing than if you were solely relying on the one origin for your coffee offer. Particularly, coffee is seasonal and therefore subject to environmental changes, pest and disease. There are other factors that can affect supply; for example, political and economical.

• To improve the consistency of the coffee offer. The coffee you buy will vary throughout the season, which presents the roaster with ongoing Quality Assurance consistency issues. A blend allows the roasters to manipulate the recipe easier, to ensure a more consistently good product. Skilled roasters are varying the origin percentages and profiles ongoing, based mainly on sample cupping.

• As a clever marketing tool. The branding and packaging of the blend, in a lot of instances, is carefully targeted towards emotional cues of the consumer. In a lot of instances, it is the ingeniously marketed blend that sells – and not necessarily the best coffee. An example of this is the number of locally roasted coffees that have Italian names given to the blend, to take advantage of the general consumers’ perception of Italian coffee. The blend can also be targeted towards a cup profile type such as Java and Mocha, for example.

The single origin coffee offer is mainly driven by the demand of consumers for high quality coffees to be enjoyed in their purest form. It strips back a lot of the marketing innuendo of blends and mainly relies on the origin story and quality of the coffee to appease consumers. The majority of the blended coffees in the market are targeted towards the mainstream milk coffee consumer, so roasters tend to focus on the caramelised and roast notes in cup character. These are amplified more towards the darker roast degree, or commonly, second crack in the roast process and beyond. The combination of these flavour notes are more favourable to the majority of milk based coffee consumers in the market.

The bright citric or fruit notes of a lighter roasted coffee don’t tend to blend well with milk. A lot of the high quality specialty coffees are mainly wet processed to produce a nice clean and crisp coffee, but can lack the body required to make a pleasant milk based espresso. Most consumers won’t find citric or fruit notes coming through strongly in their flat white very pleasant. If you ask a consumer to describe their ideal flavour and texture notes for a milk based beverage, you will almost always get chocolate, caramel, smooth or creamy.

The emergence and refining of different brewing methods has been a big instigator in the growth of single origin coffee offers in the market.

Syphon, filter (various types), plunger, cold drip or cold press brewing methods are all great for highlighting the single origin flavour nuances. The growth is also obvious by the number of recent specialty coffee brokers who have entered the market. This is all well and good, but what does it mean for the coffee roasters and coffee distribution business? It is easy to get caught up in the hype, and I have seen many roasters launch into supplying single origins without any clear game plan of how to roast, position and market the offer.

It is not as simple as just buying some high quality coffee, roasting it and then adding it to your price list. There is also the trap I have seen many of the micro roasters fall into, where they start buying more expensive coffees to put in their blends, thinking this will give them a competitive edge, but instead end up eroding margins for little or no gain in sales.

These are just some of the areas to consider for a roasting business when establishing its single origin coffee offer:

• Look for the incremental sales opportunity. Find out where you can position the offer to take advantage of incremental sales. You should not be just replacing current sales with a new offer, as it may not be as profitable when you take into account the total fixed and variable costs of production and distribution. If you are cannibalising your own sales, then you need to reposition the offer, as roasting and selling single origin coffee may not be as cost effective (i.e. smaller batch roasting).

• Education of the retailer and consumer is vital. You must educate your customer base. If you are selling to a café, then think about how they can best serve and educate their consumer. What brewing options do they have? Will they need extra grinders? How can it be displayed in store to create consumer interest? Do they understand the origin, and have they done sufficient cupping of it to be able to sell it to the consumer? When you go into a restaurant, you always feel more comfortable buying the more expensive wine if you feel confident of the waiter’s appraisal.

•  Roast the coffee to suit the extraction type. There is no point offering high quality expensive single origins and roasting them dark. They will lose the origin character that they are prized for. Roasting a Cup of Excellence coffee dark for an Italian Style Espresso or to the degree that most would for a milk based espresso, would not take advantage of the origin character. This would be similar to cooking a high grade Wagyu steak to well done. Sure, some consumers prefer this; however, you can use other single origin coffees without the expensive price tag that would suit better.

You want to maximise the flavour character of the coffee, so ideally you would encourage the use of straight espresso and the other brewing methods mentioned earlier. It is important to consider whether or not you want to make the roast degree too niche. Notably, for instance, syphon is roasted to a very light degree, which would be too acidic for espresso. Espresso is the easiest to implement at a café and would offer more potential for incremental sales. Establishments with brew bars that offer a larger variety of extraction methods generally will roast onsite for flexibility of roast profiles.

• Choose in season coffees, and always ask for samples from your supplier. The sampling and cupping of single origins is extremely important.

Just because a coffee has a high price tag, does not mean its cup character will appeal to your consumer. Don’t just rely on the broker’s cupping notes; in most instances, they are aimed at selling the coffee and usually read like the fresh section of your local supermarket. Initially, the more important areas to take note from the broker’s info are: processing type, varietal, grading, screen size and any independent scoring of that lot. Use the rest as a guide, and do your own cupping before committing to large quantities.

Look for coffee with an agreeable level of acidity that is well balanced overall. High levels of acidity may be prized by some in the industry; however, the potential for sales will be small. Most consumers will prefer the sweeter fruit notes, rather than the strong citric notes that some coffee possess. The skill of the roaster also comes into play when balancing the level of acidity in the coffee.

• The positioning and pricing of the single origin offer is important. There will be a difference between retail and wholesale offers. The price should be reflective of the quality of the product; however, people will only pay the extra money for it if they see value in it. For ideas on how to go about this, one only needs to look at the wine industry and how they are able to command higher pricing for better quality vintage wines.

• You may need to restructure your roastery to be able to accommodate the smaller batch roasting. A lot of roasting plants will have a dedicated smaller batch roaster that will handle the single origin production.

These are just a few of the important areas to consider when developing and implementing your single origin offer. A close examination of a successful competitor in this area can also provide shortcuts to a better strategy; however, being able to establish a point of difference is what can bestow a competitive advantage. The coffee market is always evolving, so coffee roasters need to plan for where the future demand will be. One thing is for sure: the importance of single origin specialty coffee will continue to grow.



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