Technology has transformed not only the way we consume goods and services, but also our expectations of them. The rise of the internet, smartphones, and home delivery mean that now more than ever we expect products to arrive as quickly, seamlessly, and conveniently as possible.
The coffee industry has been no stranger to these developments. Online orders and coffee subscription services have soared in popularity in recent years, with the number of coffee subscription sales increasing by 109% over the last year in the US alone.
Since the outbreak of Covid-19, this trend has only accelerated as the widespread closure of coffee shops has forced more and more consumers to satisfy their coffee craving at home. As a result, many specialty roasters have launched their own subscription services to continue serving customers during the pandemic and make up for lost footfall.
But is it the right decision for all coffee businesses? And are there any risks? To find out more about launching a coffee subscription service, I spoke with marketing executive at Voyager Coffee, Tobias Taylor.
See also: Developing Coffee Subscription Packaging
How Can Specialty Roasters Benefit From Offering A Subscription Service?
Over the last year, the outbreak of the Covid-19 pandemic has hit many coffee businesses hard. Lockdowns and social distancing measures forced many places to shut their doors, leading to a considerable loss of income.
While some decided to close permanently, others were quick to launch coffee subscription services as a way of supplementing income and staying at the forefront of customers’ minds. It allowed them to continue serving customers and cater to the growing number of people brewing coffee at home. According to a recent survey by the National Coffee Association (NCA), 85% of US coffee consumers now drink at least one cup of coffee at home.
Tobias Taylor is marketing executive at Voyager Coffee, a UK-based coffee subscription service. He tells me that one of the greatest benefits of subscription services is that they enable roasters to get a better idea of inventories and plan ahead accordingly.
“Coffee subscriptions give businesses greater control when it comes to buying and storing green coffee because they know exactly how many customers they will have that month,” he explains. “It allows them to accurately predict outgoing volumes, which means they can confidently commit to buying coffee at certain price points from smallholder farms. This helps prevent coffee going to waste as roasters need only purchase as much as they need.”
This level of foresight allows roasters to implement business strategies more decisively, while not having to worry about factors such as a drop in footfall.
Aside from business operations, coffee subscriptions provide an opportunity for businesses to form stronger, more long-term relationships with their customers through personalisation. This is because when customers sign up to a subscription service, they must enter details about their preferences, such as roast profile, brewing method, flavour notes, and number of cups consumed per day.
With this information, specialty roasters can learn far more about their customers than they might be able to in a grocery store. They can then personalise their products according to the needs of the customer, for example, sending links to videos on how to improve their brewing method or including a leaflet on the “story” behind their coffee.
Being able to offer a more personalised experience in this way has a number of benefits. A recent study by Deloitte found that 36% of consumers are more likely to buy products that offer personalisation, while nearly half said they would be willing to wait longer to receive personalised products.
How To Launch A Coffee Subscription Service
Launching a coffee subscription service offers various benefits to specialty coffee roasters. However, before you start, there are a few points to consider to ensure you maximise your chances of success.
Tobias suggests that roasters begin by examining their existing customer base and finding out what they look for when buying coffee. For example, do they value trying new origins or do they prefer consistency? Are they more likely to drink light roasts or dark roasts? Do they want a subscription for the convenience, cost, or to discover different coffees?
Asking these sorts of questions will give roasters a clearer idea of who their customers are, what motivates them, and how they can offer a subscription that works.
It’s also important to think about the customer experience, from the usability of the website to the additional resources on offer. It’s rare for customers of coffee subscriptions to exit the website immediately after signing up to regular deliveries.
More often than not, they’ll want to find out as much information as they can, from the company and its values, to the story behind the farmers who grow their coffee. Videos demonstrating how customers can recreate barista-style coffees at home are also effective.
“Creating a ‘wow’ experience is about exceeding expectations in every area,” Tobias says. “Because there is no physical location, roasters can focus a lot more attention on creating a great experience for customers at home.”
Once roasters have attracted subscribers, the next step is to retain them. Exclusive offers, prize draws, and access to events are just a few effective ways of providing customers with added value. Ideally, they need to be incentives that customers wouldn’t receive if they were to buy coffee directly from the store.
Tobias says that while big discounts may be useful in attracting new customers, long term incentives are needed to improve retention rates.
“I see a majority of subscription services offering a big initial discount to lower the entry cost,” he says. “But I think customers react more to the levelling of rewards over time. Shifting the focus to long-term rewards is where the real value lies.
“For example, as your customers get into the third, sixth or twelfth month of their subscription, you could provide milestone incentives to make them feel valued and give them a reason to remain loyal to the subscription.”
Adapting Packaging For Coffee Subscriptions
Not only is packaging an important part of the customer experience, it can strongly influence perceptions about your brand as well as the coffee itself. Certain shapes can affect expectations of characteristics like sweetness and bitterness, while some colours can promote feelings of luxuriousness and quality.
Although it can be tempting to opt for the most cost-effective packaging materials available such as plain kraft paper stock bags, fully customised pouches can help build brand identity and contribute to a better customer experience.
“When it comes to customising your packaging, I think it all comes down to your niche,” Tobias explains. “Customising is important, but it’s not a one size fits all – it will be based on who your target market is.”
For example, if your customers have expressed an interest in knowing more about the story behind the coffee, you could represent this on the coffee packaging by adding illustrations linked to the origin or a short entry about the specific farm on which it was grown.
Atlas Coffee Club is a coffee subscription company that’s done this to great effect. The entire front-facing panel of their coffee bags is dedicated to showcasing origin, drawing inspiration from the textiles and landscapes of each coffee-growing region.
“Each coffee bag was created to connect the coffee consumer to the country,” says co-founder Jordan Rosenacker in an interview for Sprudge. “We want our customers to feel more connected to the countries producing the coffee and celebrate the various cultures and regions from around the world.”
In addition to custom designs, the coffee packaging for subscriptions needs to be able to survive the journey from roastery to consumer, while preserving the freshness of the coffee inside. Coffee that arrives stale or with the bag split can have a serious impact on the reputation of your brand and may turn customers away.
As a result, some specialty roasters choose to put their coffee bags inside cardboard boxes to protect against the bumps and jolts typical of transit, and ensure their coffee arrives safely at the consumer. This also allows more space in which to include additions such as leaflets, taste cards, and coffee samples. However, for those who want to keep down costs, airtight multilayer packaging should be sufficient.
At MTPak Coffee, we can help you create the perfect packaging for a coffee subscriptions service, from design and materials, to inks and components. With our range of biodegradable, recyclable, and compostable materials, you’ll be able to offer a fully sustainable product to customers, while our low MOQ stock bag options will help keep costs down.
For more information on our coffee subscriptions packaging, contact our team here.
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