Market Report

Baristas riding a tidal wave

When Kyle Ramage set foot in the Washington Convention Centre in Seattle last April, he may as well have been set to star in a theatrical Broadway performance. Every detail in his demonstration of craft coffee skills was second nature by now. After all, he had run through it up to six times daily in the months leading up to the event. Hand gestures, body position and speech were perfectly choreographed to demonstrate artistic ability as he led judges on a 15-minute journey through coffee preparation. The co-star of his act, Finca Nuguo Geisha coffee, picked and processed just two months earlier, was no doubt a significant wow factor in the first-class production. But considering he hadn’t even qualified to compete in the event the previous year, Ramage was understandably shocked when he was named the 2017 US Barista Champion. “I was incredibly surprised,” Ramage tells Global Coffee Report. “I hyperventilated. I did not expect to be called.” It’s clear that earning one of the highest forms of respect as a barista is no simple feat. And yet, the pre-requisites for a shot at the esteemed title allude to a very different job description than it demanded twenty years ago. “For so long we were these militant coffee evangelists,” says Ramage. “We have to meet people where they are and give them a better option to what they’re having without making them feel uncomfortable. “There’s an amazing opportunity for coffee as a customer service experience and as a luxury.” The innovation and expertise that is increasingly sought-after in modern baristas could prove a wise investment for third wave coffee roasters. According to marketing experts at the Specialty Coffee Association’s Re:co symposium last April, it’s exactly the kind of front line adaptability that may define whether brands sink or swim when we usher in the new era of coffee. Tidal wave
Have we seen the peak of third-wave coffee? Dan McCloskey thinks so. The Founder and Chief Creative Officer of Premium Quality Consulting believes the proof is in a brand study that examined common tropes and language used by 1397 US, Canadian and select influential European brands with a 2016 presence. His company’s research provided an insightful view of how three distinct waves of coffee emerged and co-exist in today’s market. McCloskey explains that while the convenience-oriented first-wave brands treated origin as a commodity and the second wave with a slightly more specific focus on blending, the third wave is best described as single origin supremacy. Or as he puts it, “an obsession of knowing where things come from exactly.” Although findings showed an initial spike in emerging third wave coffee brands in 1993, there was a second and significantly larger brand acceleration between 2009 and 2013. Premium Quality Consulting President, Jan Anderson, who co-presented with McCloskey, says roasters would be wise to observe the period she refers to as the “tidal wave”. “The tidal wave is the millennial reinvention of coffee,” she explains. “It’s not so much a reaction to the third wave, but a refinement of it. The journey to origin suddenly becomes a personal adventure. Pursuing the agriculture product for transparency now goes to the farm, the farmer, the microlot and the community.” As with most adventures in unfamiliar territory, it’s always handy to have a tour guide. In this case, there was an obvious candidate. Whereas a barista’s coffee competency was once defined by a list of memorised espresso-based recipes or latté art skills, third wave consumers are increasingly turning to baristas to learn even more about what’s in the cup and for more detailed knowledge of how it got there. McCloskey says the shift in the barista’s role is a hallmark of the third wave. While second wave brands focused on strict rules of preparation, the third wave saw those rules embodied (and sometimes rejected) by the individual serving it. “There is a kind of priesthood of the believer in the modern-day baristas as opposed to papal scripture that is handed down by the coffee companies.” But whenever a trend becomes mainstream, there is bound to be rebellion. McCloskey believes the tidal wave is proof of a new coffee orthodoxy. He says we can already see this in large multinationals shifting product lines to include a third wave offer.  And if anything screams mainstream, it’s definitely Starbucks. The chain credited for fueling the specialty coffee revolution launched its first Starbucks Reserve Roastery in Seattle in 2014. The super-premium venue is completely unrecognisable from its regular stores, featuring a prominent on-site roasting machine and hand-picked baristas to craft uber fancy pour-overs that sees the average customer spend four times more than in a regular location. “Our Roasteries and Starbucks Reserve stores will further transform – and elevate – the Starbucks Experience we deliver to our customers and are laying the foundation for our next wave of profitable, global growth,” said former CEO Howard Schultz in a statement. Schultz stepped down from his second stint as Starbucks chief in April to lead the new line of Reserve stores the company estimates will make approximately US$3 million in sales, which is twice as much as the average location. It recently unveiled plans to open its sixth Reserve Roastery, a four-storey building in Chicago in 2019. With the company’s influence slated to help solidify the third wave as the new norm, McCloskey believes the pattern is already in place for the next wave of reaction. Change is coming
There is little doubt the next wave of coffee is imminent. But as with all change, the question is never if, it’s when. “We don’t know when because the consumer hasn’t told us yet,” says Anderson. With extensive experience leading coffee companies through periods of change and growth in the industry before taking on her current role, Anderson has solid advice on how to navigate the winds of change. “Even though coffee is very big business, the experience is very small, personal, one cup at a time. When change comes, it will be the small roasters and cafes that have the advantage over big companies because they’re local, they’re nimble, they’re connected to their consumers, they’re inventive, they have the ability to adapt.” And while it’s hard to predict the outcome of a storm, she does have a suggestion on how companies can maintain relevance. “You need to know your consumer, you need to engage with your customer, and you need to educate yourself about the new consumer, the one who might be able to react to the status quo.” An interesting engagement
If anyone knows the impact of stellar customer service on profit margins, it’s Peter Giuliano. While his current role sees him as Specialty Coffee Association’s Chief Research Officer, he is widely respected as co-founder of Counter Culture, one of America’s first third wave café chains. Launched in 1995 at a time when the fast-food approach to coffee was still dominant, Giuliano tells GCR a vital part of his strategy was sharing his passion with customers. “People love access to experts,” he says. “When baristas can do that, they can help drive interest in not just coffee, but other beverages as well.” Giuliano thrived on customer connections, taking advantage of opportunities to impart knowledge from coffee preparation to stories about producers at origin. But even as he gained notoriety as a pioneer of the direct trade movement and successful entrepreneur, his original title still trumped all others. “I still identify as a barista first. Even when I’m a coffee buyer, even when I’m a coffee roaster, and even as a taster. I’m using my knowledge of what turns people on about coffee, and that informs how I buy coffee, roast coffee and taste coffee.” With the rise of other barista-owned chains including Stumptown Coffee Roasters in the US and Tim Wendelboe in Norway shortly following as early third-wave adopters, Giuliano was definitely on to more than just a trend. “There are some really knowledgeable baristas today that are interested in sharing knowledge with people,” says Giuliano. “That means information is much more available to consumers than it ever has been. I think people know a lot more about coffee now because of baristas. I think people are making better coffee at home now because baristas taught them.” Higher Learning
Picking up on the consumer thirst for knowledge, a growing number of roasters and Hospitality, Restaurant and Catering (HoReCa) establishments are taking the cue by hosting regular education events. Every Friday at 10 a.m., the curious coffee drinker can walk into one of Counter Culture’s US regional training centers and taste coffee with the pros. The facilities also host classes in brewing techniques that show students how to make great coffee using tools in their own kitchen.
Cafés aren’t the only ones cashing in on the strategy to boost sales and clientele. For the past year and a half, a posh US boutique hotel nestled in Durham, North Carolina has enticed more consumers to its café doors with a similar tactic. Led by Counter Culture staff, Durham Hotel hosts free monthly education events that feature new roasts, blends and gadgets. Head barista Mark Daumen tells GCR the events have not only helped boost in-store traffic, but sales of specific coffees as opposed to what is available on drip. “Being a coffee shop inside a hotel, it has definitely improved public awareness of the fact that we’re here for the community as well as our guests,” he says. Ramage agrees there is a real opportunity for baristas to impart expertise in-store. While a sales and marketing representative for Mahlkönig by day, he keeps his coffee slinging skills sharp by practicing in the company’s testing lab and his own kitchen. “(Those cafés) are always going to be more popular than the shops where people just give you what you ask for,” he says. A glimpse of the future
While it’s hard to predict what the next wave will look like, it’s evident that roasters would be wise to keep their ears to the ground for signs of the next big reaction. While the friendly neighbourhood barista may help smaller roasters get an edge on competition by adapting to local preferences, Peter Giuliano foresees another industry trend that might give third wave roasters a fighting chance in the next era of coffee. With abilities increasingly compared to that of a sommelier, he believes barista-turned-entrepreneurs may be better equipped to cater to coffee lovers of the future. “That’s a next role for the barista,” he says. “To me that’s what we’re shifting into now. Even if you’re not making drinks for everyone all the time, you are still the barista. “The barista is less the person who makes the drinks and more the person who is responsible for making sure the experience is great.” GCR

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