Why You Need to Offer Millennials More Than Just Coffee

We need to rethink who our coffee consumer is, and what we’re offering them.

In the U.S., the new consumer — meaning the millennial, aged 18 to 34 — drinks more specialty coffee than any other generation. They also drink coffee outside of their homes more, are more interested in different types of drinks, willing to spend money on good coffee — it’s an affordable luxury — and are highly engaged, even considering themselves “coffee experts”.

But, the most important thing to know about the new coffee consumer is they care about a lot more than just the product we’re offering.

I’m Tracy Ging of The Coffeewoman, formerly VP of Sustainability and Strategic Initiatives at S&D Coffee and Tea. I’m now working independently with an impact investment firm focused on agribusiness innovation. In the past, I was the Deputy Executive Director of the SCAA and the Director of Marketing and Communications of the CQI. I gave a speech on the new coffee consumer at Let’s Talk Coffee Mexico, and I’m here to share that content with you.

SEE ALSO: Producers & Importers: How to Sell YOUR Coffee to Roasters

Tracy Ging at Let’s Talk Coffee 2016 in Mexico. Credit: Let’s Talk Coffee, Sustainable Harvest

 

Coffee Is More Than Just Coffee

The Specialty Coffee Association of America (SCAA) has conducted several research studies on specialty coffee drinkers, and younger coffee drinkers in particular. I want to tell you about one of the earlier studies we did, because it helped us understand how younger coffee drinkers relate to specialty coffee.

We asked participants to create collages of what coffee meant to them. We expected to see cups, beans, brands — literal representations of coffee. But actually, we mostly saw images like this.

Credit: Let’s Talk Coffee and Sustainable Harvest

These are things that represent how coffee makes the millennial consumer feel – things like peace, travel, love, and empowerment.

For the millennial consumer, coffee is more than a product. It’s an experience they connect to and identify with in a way that has value beyond the drink itself. This is what brand strategists and marketers call emotional value.

Emotional Value Sets Your Coffee Apart

Numerous studies have shown consumers are emotional and, in fact, Robert Passikoff, PhD states that about 80% of their decisions around products are because of their emotions. What does this mean for us? Simply that they are less concerned about product attributes, like roast level, and more concerned with how they connect to the product or brand.

It’s been said that “emotional values are what differentiate brands from commodities”. I’m using the term “brand” because this concept comes from brand and marketing strategy, but the same concept can apply to category differentiation and specialty coffee as a whole.

Just as specialty coffee has achieved a lot by focusing on product differentiation, using technical attributes around terroir, bean selection, processing, and cup profile to separate itself from commodity and commercial coffee, emotional attributes provide further opportunities for specialty coffee to differentiate.

Sustainability Is Key to Emotional Value

In specialty coffee, research suggests this emotional value is created largely through sustainability and things relating to the source, including sourcing practices.

Earlier this year, at SCAA’s Re;Co Specialty Coffee Symposium, S&D Coffee and Tea released a study building off of SCAA’s prior work. They measured dozens of different variables and combinations to see how they influenced a coffee drinker’s purchasing decisions. They concluded that issues around sourcing practices and sustainability were even more important than price.

Credit: S&D Coffee & Tea

And when these coffee drinkers had a strong impression of a company’s commitment to sustainability, it created a “halo effect”:

• They thought the quality and taste of the coffee was better.
• If that company offered other items, like food, they even thought the food quality was better.
• They stated things like “this company must treat their workers well” despite the fact that this topic wasn’t introduced in the study.
• They had stronger impressions of the company overall.
• And they were willing to pay a premium based on that impression.

For younger coffee drinkers, it’s less about trying a product and thinking “I like this”, and it’s more about trying a product and thinking “I am this”. They aren’t just buying a cup of coffee. They are identifying with the type of coffee they buy.

• With coffee, they seem to identify with the source: they want to know where their coffee comes from.
• They identify with sourcing practices: they want to know if workers and farmers were treated fairly and if the company they’re buying from is responsible.
• They identify with the environment: they care about natural resources, particularly forests and water.
• All of this seems to tap into their identification as globally minded citizens, concerned about social and environmental justice.

Tracy Ging speaks about emotional value and the millennial consumer. Credit: Let’s Talk Coffee, Sustainable Harvest

Purchasers Don’t Understand Our Terminology

However, while these things are important to the new coffee drinker and we are talking about them — as an industry and as individuals or companies within it — the message isn’t getting through. We have a communication problem.

We found that:

• Millennials don’t really understand certifications.
• And certifications alone are not enough to signal a commitment to sustainability, therefore not enough to trigger purchase.
• They want a clearer picture of how broadly and authentically a company is committed to sustainable sourcing, not just a certification seal.
• They recognize some terms, like “direct trade” or “relationship trade”, and have a general sense that they are good, but don’t know exactly what they mean.

From S&D Coffee and Tea’s Research: “Despite its powerful sway, ‘sustainability’ is a term that is surprisingly murky in definition – only 22% of Millennials would say that they know exactly what it means and what’s required to qualify as such. More importantly though, the overwhelming majority (82%) have heard the term used in reference to coffee.”

That finding is incredible to me. We are talking about source and sustainability to consumers. These things are very important to these coffee drinkers. And they’ve heard us talk about them. However, they are still confused.

That means we have an opportunity to tell the story better.

We Need to Tell Authentic Stories

Joel ben Izzy spoke about storytelling at Let’s Talk Coffee, and he’s already produced an article about it on Perfect Daily Grind. I recommend you read that article to understand effective storytelling.

However, there’s one thing that’s worth emphasizing: authenticity is very important to this generation of coffee drinkers. Realness is critical for effective storytelling and marketing to them. And I think the key to authentic storytelling is self-representation.

To date, we’ve mostly relied on the supply chain to transfer stories through to consumers. But that’s an inherently difficult approach — it’s inevitable that some of the essence is lost in translation.

Granted, there are practical reasons for relying on this approach , such as technology limitations. However, these limitations are lessening. And “…whether through participatory photo projects, through the democratization of data and content creation, and the growth of social media, there are an increasingly number of options for coffee farmers and organizations to represent themselves.” To tell your story more directly to new coffee consumers.

Because at the beginning of this article, I stated that the most important thing to know about the new coffee consumer is they care about a lot more than just the product. And the essence of that is that they care about where coffee comes from, how it’s grown, and they care about you.

The new coffee consumer wants to hear your story.

Written by T. Ging.

Perfect Daily Grind

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