by Robin Mahaffeyby Bruce Milletto
What's Brewin' Coffee News
The Long Voyage:
Route to U.S. Acceptance
by Bruce Milletto
I was first introduced to the specialty coffee
industry in 1988 while I was the owner of an Italian import company
called Sotto Voce International Marketing. At that time, specialty
coffee was barely emerging as a commodity in the United States,
and only a handful of enlightened consumers were going out of
their way to search for the distinctive morning cup that specialty
coffee offered. I made many trips to Italy and easily made contact
with companies that produced Italian food and beverages. Soon,
I was doing business with dozens of companies that produced olive
oil, pasta and ceramics. During my visits, I was always amazed
at the quality of Italian coffee and the care baristas took in
preparing it. But it was two years before I made it part of my
Curiosity led me to a large roaster in central Italy. This roaster
had thought about what it might take to bring his coffee to the
American market, but one of the problems he faced was converting
the kilo-sized bags in which he packaged his coffee to the American
standard pound-and-a-half-sized bags. Even though there were
difficulties, I began to wonder why more Italian coffee wasn't
available back in the states. What problems were these companies
facing in introducing their product to the American consumer?
I left Italy with samples of wonderful coffee and tested the
waters with various specialty stores in the States, seeing if
they had any interest in giving shelf space to yet another brand
of coffee. I also approached large chains in an attempt to convince
them they should carry this extraordinary coffee from the homeland
of espresso. My small-scale experiment yielded shocking results:
Pasta, wine, mineral water and other unique Italian products
were often welcomed with open arms, and companies placed orders
for container loads. Coffee, on the other hand, when presented
to a potential buyer, usually hit a brick wall. The one concern
I heard over and over again was "freshness."
Even though there was far less education and awareness about
coffee at that time, almost every buyer I approached asked how
long it would take for coffee to get from the roaster, to the
dock, to the ship and to their door. Unless coffee was air freighted
on a small pallet, which was cost-prohibitive, it was apparent
that it could take many months before coffee roasted in Italy
could be placed on American retailers' shelves.
Roadblocks to Exporting
All of the Italian coffee companies I spoke to for this article
said freshness was not an issue when importing coffee to the
United States. With today's high-tech systems, coffees that are
packaged and sealed properly can have a shelf life of up to 18
months. It can take two or three months for imported coffees
to reach the United States, which still leaves many months before
the coffee reaches its expiration date. In the United States
today, the coffee you buy from large U.S. roasters may have been
roasted four to six months ago. If this coffee is delivered to
a retail store and a pound is used in a matter of hours after
opening, staling should not be a problem. If that same coffee
sits for days in the grinder, it will quickly lose many of the
attributes required to produce a great cup.
Still, freshness and consumer awareness of roast dates create
a significant marketing challenge for coffee roasted in Italy,
or in any other country where it must be transported long distance.
Marketing also is a gigantic commitment, especially if you are
combating a preconceived flaw-even an unfounded one-in your product.
Even without this problem, medium-to-large Italian roasters spend
enormous amounts of marketing dollars to introduce a brand in
the United States. An insider in one of the largest roasteries
in Italy told me that the marketing budget for one year alone,
just in New York City, is well over $1 million.
Exporting obstacles for Italian coffee roasters can be compared
to developments in the beer industry. For years, people equated
good beer with European brews, as seen with the success of Heineken
in the United States in the 1980s. However, over the past 20
years, many Americans have come to believe that the best beer
they can buy is tapped right out of the keg at the local microbrewery.
Consumers can see the fermentation tanks behind a glass wall,
where they can watch the brewmaster test the beer. They know
In the same time span, American wines have gained respect worldwide
and market share in the United States, and not just California
vintages. In many regions of the country, wine drinkers can savor
delicious varietals crafted from grapes grown a few miles from
home. Similarly, many new American coffee converts believe that
the highest-quality coffee is roasted locally-or maybe as far
away as a neighboring state. American roasters have encouraged
this belief by educating their customers about how fresh their
coffee is. By marketing their coffees as fresh to the local consumer
and quickly shipping their beans across the country to others,
they have created the impression that only beans "warm from
the roaster" can produce a fine cup. Larry Karper, North
American sales and marketing coordinator of Procaffe USA, a company
that imports six espresso blends under the Caffe Bristot brand,
disagrees with this contention, saying beans that fresh are too
fresh. Espresso, he says, needs to mature at least 30 days before
it reaches its true potential.
The Art of the Roast
While freshness is important, an exaggerated emphasis on the
roast date diverts attention from an equally important factor:
the art of the roast. The best Italian roasters have perfected
their techniques over many years in a culture that demands perfection
from its coffee. They have developed a near-alchemical ability
to coax incredibly complex and balanced flavors from their beans.
Clearly, many American roasters produce great
coffee, but overemphasis on freshness has affected efforts to
market fine Italian coffee
to American consumers. Luca DiPietro, vice president of Danesi
Caffe USA, has confronted the freshness issue by offering taste
tests to potential customers. These tests can prove that even
though a coffee may have been roasted 12 weeks ago, it is still
as fresh as many of its American counterparts, and of the utmost
quality. Another way to answer the freshness question is to import
large amounts of coffee frequently. Ammirati Imports, a New York-based
importer of Lavazza coffee, imports a 40-foot container of coffee
every 10 days, and at any given time has access to more than
77,000 pounds of coffee from either the Ammirati or Lavazza corporate
Lack of Consumer Awareness
Another problem facing Italian coffee companies in the U.S. market
is the lack of consumer awareness about the origin of espresso.
While pasta and wine have been closely identified with Italy
for well over 100 years, many Americans are unaware of the influence
Italy has on their caffe latte. In other words, the romance of
Italy has not extended to their morning cup. In addition, many
American coffee companies have done a great job of promoting
origin coffees, and today consumers know coffee beans come from
Guatemala, Kenya and Indonesia. However, many aren't aware that
the process for making espresso and the culture of specialty
coffee were born in Italy.
This brings up another question heard from U.S. customers: "Coffee
isn't grown in Italy, so why should we buy Italian coffee?" Italian
coffee companies overcome this obstacle by stressing their commitment
to quality, tradition, years of experience as master roasters
and dedication to the "art" of authentic Italian espresso.
Catchphrases used by Lavazza illustrate this marketing strategy: "a
century in a cup" and "a world of experience." Danesi
Caffe uses the slogan, "For more than 100 years, Danesi
has meant coffee with passion, dedication and excellence." Danesi's
Web site states: "Danesi Caffè means history, tradition
and quality." Many U.S. roasters have only been in business
for five or 10 years-not long enough to make these claims.
From a U.S. retailer's view, selling a traditional Italian espresso
blend may be a challenge requiring some consumer education. There
are two things to consider when deciding whether or not to use
an Italian espresso blend. The first is availability. What happens
if your coffee supplier is between shipments from Italy and you
need coffee now? You won't be able to have it sent overnight,
like you could with a domestic roaster. However, in most major
markets this is not a problem because retailers are dealing with
an importer that can deliver coffee on a weekly basis. The second
consideration is the public's familiarity with the flavor profile.
Italian espresso blends have been crafted by roasters with the
intent of being used for straight shots, and in five-ounce cappuccinos.
Their American counterparts generally have crafted their blends
to stand out when combined with a large quantity of milk. Also,
many Italian blends contain some robusta beans, while most American
blends are comprised of 100 percent Arabica. For these reasons,
Italian and American espressos just taste different. The question
becomes: Which one will your customer be more familiar with,
and which one will they prefer? It's not unlike comparing two
Chardonnays-one aged in French oak, one aged in American oak.
Both wines might be delicious, but you may end up preferring
the one that possesses the flavor characteristics with which
you are most familiar.
Developing Blends to Suit American Tastes
Ammirati Imports has been selling Lavazza in the United States
since 1998, and has watched its sales grow between eight percent
and 35 percent each year. "Lavazza has been by far the most
successful Italian coffee company in the U.S. market," says
T.J. Tarateta, co-owner and general manager of Ammirati Imports,
because they offer a full line of products, including espresso,
filter coffee, pods and even Rainforest Alliance-certified coffee
that appeals to the American audience.
According to Tarateta, Lavazza was the first to enter the U.S.
market with filter coffee. This coffee is Gran Filtro, and Ammirati
sells 60 tons of it per year in the United States. It is packaged
for ease of use; customers can choose from whole-bean, eight-ounce
pre-ground and two-and-a-quarter-ounce fractional packages.
Lavazza has not changed its blends for the American market but
has added new blends to suit American tastes. For some, Gran
Filtro is too sophisticated and delicate, so Lavazza developed
Gran Filtro Dark, a coffee with a darker roast more in line with
the tastes of a particular sector of the American market.
Roadblocks to Exporting: Part 2
Another stumbling point for Italian coffee companies in the United
States may be price per pound. One way to make the higher price
more palatable is to market the qualities of the bean and blend.
While coffees from Segafredo Zanetti cost more than their American
counterparts, they're still a good buy, says the company's U.S.
sales and marketing manager Oscar Contesini, who claims that
because of the composition of the blend of the beans, it takes
less coffee to produce a perfect shot. In other words, with Segafredo
coffee, he says, you can get more shots per pound, which offsets
the difference in price.
One way to strengthen an Italian brand in the United States is
to buy an American coffee company, which is exactly what the
Bologna-based Segafredo Zanetti Group did on December 5, 2005,
when it purchased the U.S. retail coffee brands of Sara Lee Corporation,
which included Chock Full o'Nuts, Hills Bros., MJB and Chase & Sanborn. "It
doesn't happen every day that an Italian-based company buys an
American company," says Contesini, who sees the acquisition
as giving the company a powerful foothold in the U.S. market.
According to the company Web site, "The addition of the
U.S. organization will further strengthen the company's expertise
in the cultivation, trading, roasting and distribution of coffee
and continue its mission to bring coffee, espresso, coffee shots,
quality and service to the world." Sara Lee's coffee manufacturing
facility in Suffolk, Va., was also included in the deal, as were
103 Chock Full o'Nuts coffeehouses.
One of the biggest reasons Italian coffee companies fail in the
United States, says Tarateta, is because they don't provide technical
service. Selling coffee is unlike selling any other product,
he says, because it is intrinsically tied to a device that has
to deliver the beverage. And espresso machines have a tendency
to break down. To be successful in the United States, he concludes,
you have to provide service for the machine that makes your coffee.
Larry Karper of Procaffe USA agrees that servicing equipment
is essential for success. His company, the two-and-a-half-year-old
U.S. subsidiary of Procaffe SpA of Belluno, Italy, sells coffee
to a network of distributors, all of whom have been thoroughly
trained by Procaffe to service their customer's equipment to
ensure it is in top working order to bring out the best characteristics
of their coffees.
Having a visible U.S. presence is critical to success, says Danesi's
DiPietra. Many Italian companies have tried to bring their coffee
to the United States via importers who may or may not be able
to sell it. For some of these companies, only one or two containers
of their marvelous coffee ever made it to the United States.
For those who have been more successful, the next step was to
open a U.S. subsidiary. In 1998, Danesi opened an office in New
York. Prior to that, it sold its coffee to importers. Opening
a subsidiary allows Danesi to protect its brand and monitor quality
standards with more control over distribution and ongoing training
programs. But opening a subsidiary can be very expensive, and
competition from American roasters is fierce. It also can be
difficult to find the right people to run the operation-people
who understand both the U.S. and the Italian markets.
Creating a Recognizable Brand
The biggest challenge faced by Italian coffee roasters in the
United States is creating a recognizable brand, says Procaffe's
Karper. Breaking into the psyche of American culture takes time,
he says, but for those companies willing to put in the effort
to educate American distributors and consumers, the reward is
an increase in market share.
Some Italian coffee companies have extended their brand image
in the United States by opening cafés. Illy Caffe and
Lavazza Café are two examples. According to Tarateta,
Lavazza cafés have been particularly helpful in building
market share and creating brand awareness for Lavazza coffee
in middle America. Segafredo is unique in that it offers franchises.
At present, you can find a Segafredo franchise in Miami (where
it was voted the city's best coffeehouse two years running),
two in San Francisco and one in Las Vegas. In 2006, Segafredo
plans to franchise two more cafés in Portland, Ore., and
Finding the right niche in the American market is crucial to
the success of Italian coffee. Because many cafés in the
burgeoning U.S. specialty coffee market serve Seattle-style coffee,
Italian coffee companies have looked to upscale hotels, restaurants,
bars and cruise ships to crack the American market.
Creative marketing also is an important element of success for
Italian companies in the United States. Many companies make point-of-sale
items, ceramic cups and accessories available to their distributors
and customers. These items reinforce their brand and the rich
tradition of Italian coffee. Illy Caffe is one such company.
In addition to its distinctive logo cups, the company offers
signed and numbered limited-edition cup collections designed
by famous and emerging artists, including Jeff Koons and James
U.S. Market Still Growing
So why is the U.S. market so appealing to Italian coffee roasters?
According to DiPietra, it's the large number of middle-class
Americans who purchase products perceived as high end, including
specialty coffee. Also, compared to the market in Italy, which
has plateaued, the U.S market is growing at a phenomenal rate.
According to the National Coffee Association, 60 percent of the
total U.S. adult population drinks gourmet coffee, which means
the potential market numbers approximately 130 million people-a
very large market indeed. Overcoming the inherent roadblocks
and adjusting to cultural differences and expectations should
ensure that sales of Italian coffee will grow right alongside
those of American roasters in the ever-increasing demand for
specialty coffee in the United States.
Milletto is the President of Bellissimo
Coffee InfoGroup and
Founder of the American
Barista & Coffee School.
Reprinted from Fresh Cup Magazine