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CoffeeShow Explores Evolving Market

Posted On: 11/14/2010

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Nearly 400 industry members thronged the convention area of Bally's Las Vegas for the National Automatic Merchandising Association's inaugural CoffeeShow Oct. 20-22. Building on the success of the Coffee Summits organized in Cherry Hill, NJ, in 2008 and 2009, the expanded event presented an overview of the coffee service industry in an era of change.

Peter Tullio, Gourmet Coffee Service/World Wide Vending (Van Nuys, CA), NAMA's 2010 secretary-treasurer, delivered a welcoming address at the opening session. "Navigating through this economy has been challenging," he observed, "but recently, people have begun to see the light at the end of the tunnel.

"That light is opportunity," he said, noting that coffee and tea enjoy robust sales growth -- but only 16% of coffee consumed in the U.S. is drunk at work. "Our task is to convince employers that professional beverage service is an essential amenity, and a qualified coffee service is the best value available."

NAMA chief executive Richard M. Geerdes recalled the historic merger of the 74-year-old vending trade group with the National Coffee Service Association in the closing days of the 20th century, and noted that coffee now is woven throughout the association's fabric.

A new campaign to enhance the industry's image is now in prospect, Geerdes reported. "Our clients think better of us than many of us think of ourselves," he noted.

Following a keynote address by Henry Gilvray, SmithBucklin Corp. (Chicago), on the nature and importance of leadership, Tullio introduced NAMA senior vice-president of government affairs Ned Monroe, who surveyed the legislative and regulatory scene from the perspective of the workplace services industry.

While the new healthcare reform package and its calorie-disclosure rules have gotten most attention in the vending arena, he said, there have been developments around the country that should concern coffee service operators, too. In particular, public health officials have begun to pay closer attention to the way in which equipment is cleaned, Monroe noted. "So be sure you're doing it to the manufacturer's specifications," he advised.

Some jurisdictions "are starting to imply that you must employ a licensed or union plumber to install a connection to a backflow check valve," he continued. "Talk to us about this."

Beyond immediate regulatory issues, Monroe said, operators should be aware of the sustained attention that the public is giving to "sustainability" and "stewardship." Operating firms need to be prepared to answer questions about their practices in these areas, he cautioned, "because when the public becomes concerned, the politicians get on board."

Concluding the opening session was Miles Small, editor of CoffeeTalk, who offered an explanation of rising coffee prices and a prediction that the long-range outlook suggests that higher prices are here to stay. The reason is scarcity, he explained; demand is rising at an annual rate of 2.8%, but production has reached a plateau.

It is hard to envision an increase in arabica coffee production, Small explained. There seems to be no way to bring more suitable land under cultivation; in fact, climatic changes are reducing the areas suited for growing coffee. There is new demand for the land in those areas, for other uses. And people in many coffee-growing nations now have employment options more attractive than hand-picking coffee. Increasingly sophisticated speculation in commodities is not helping, either.

He recommended that operators become proactive in educating their clients to the inevitability of higher costs for high-quality coffees, and that they implement price increases in a timely manner.

The conference continued with various workshops. Leo Fante of Consumers Choice Coffee (Louisville, KY) described methods for setting up and conducting coffee tastings and samplings to gain accounts and to build a reputation for coffee expertise. These should be professional and festive, he advised. It's valuable to seek out opportunities to talk about coffee -- and tea -- and to conduct demonstrations, he emphasized.

NAMA knowledge source consultant RickLeffke, R.C. Leffke & Associates, moderated a series of roundtable idea exchanges related to communicating with customers and prospects. During the CoffeeShow, he presented two sessions on sales training. He emphasized that if a sales process is to build repeat business it needs to be based on the ability to understand what it is that the prospect values, and to deliver it. "Create the future, and let the customer walk into it," he advised.

Matt Smith of Lockton Cos., an expert in commercial insurance, offered an update on the effect of healthcare reform legislation on business costs and bottom-line profits. Casey Fictum, Hi!Gen Y, described the opportunity presented by the arrival of a new generation of coffee-aware consumers in the workplace, and the challenge to operators of understanding their "coffee-and-work" culture.

Bruce Leech and Dave Jackson, cofounders of Evolve, explored the five stages of business ownership, and discussed ways in which entrepreneurs can increase value by planning in advance for future stages.

Tim Cleland of Gaviña Coffee and Mike Tompkins of Coffee Products Associates conducted a demonstration of the "art of romancing coffee" to customers. They pointed out that many decision-makers do not drink coffee, but the flavor attributes identified by coffee tasters are not dissimilar to the flavor attributes of chocolate. This makes it possible to plan thoroughly enjoyable demonstrations that refocus the prospect's attention on sensory pleasures, not on price.

Fred Parrish of Profit Experts offered an approach to identifying "profit leaks" in order to maximize cashflow. He described ways to gather and organize information into "flash reports" that identify areas in which performance can be improved, with positive impact on the bottom line. This enables the manager to set targets and determine whether they are being met.

Tabletop exhibits were open for viewing for three hours in the evening of Oct. 21, in conjunction with a network reception, and for an hour and a half the next morning.

Climaxing the first-ever CoffeeShow was the inauguration of a new awards program, Coffee Legends, recognizing individuals who have played crucial roles in forming the NAMA CoffeeShow Award_Dawprofessional coffee service industry over their long and productive careers. The conference ended with a thought-provoking exercise led by Rick Leffke, in which roundtable groups practiced tossing tennis balls to one another. The balls represented customers; the participants represented the members of an OCS company. All interact with customers; the object is not to drop the ball.
PHOTO: The National Automatic Merchandising Association inaugurated its Coffee Legends awards program with a posthumous presentation of the honor to Stuart Daw, who pioneered the coffee service and specialty coffee industries over his career of 50+ years. Photo: Kevin Daw (center), Heritage Coffee Co. (London, ON, Canada), accepts first Coffee Legends Award from association chairman Craig Hesch (left) and secretary-treasurer Peter Tullio at NAMA CoffeeShow.