What Budget Coffee Tells Us About Consumers And Branding

America’s love affair with good coffee is taking an interesting, if not delicious turn.

Over the past two decades, we’ve witnessed the rise of gourmet coffee shops — those fine neighborhood bistros which allow coffee lovers to order numerous variations on their favorite coffee theme. Espressos, cappuccinos, brewed coffees even assorted tea drinks are prized by people who are not satisfied with their Mr. Coffee home brewed coffee machines.

Better Brands, Bigger Prices

Whereas at one time we were happy to drink Maxwell House, Folgers and Chock Full ‘o Nuts branded coffee, our palates now require something a bit more sophisticated including Starbucks, Seattle’s Best and Caribou Coffee. Maybe it is the piped-in ambiance or the indoor décor that helps to drive our java decision-making or perhaps the available wi-fi access which brings us in. No matter, Americans are attracted to better brewed coffee especially hot beverages brewed outside of the home.

But consumers are also looking at price when it comes to their “coffee to go” experience, understanding that few post economic collapse budgets can still handle a four dollar a day habit. Add in an apple bran muffin or fruit stella and that meal suddenly tops six dollars. Oh, did I say that Starbucks charges for wi-fi usage unless you use their card?

What McDonalds Has Learned About Branding

McDonalds has been overhauling their coffee line up, understanding that children who were raised on Happy Meals can grow up into becoming life long adult customers if good coffee is available. It wasn’t too long ago that the Golden Arches served a truly forgettable brew, a special blend that tasted no better than what you could make at home, sometimes much worse.

But McDonalds sensed that consumers wanted something more, so over the past several years the world’s largest restaurant chain began to roll out McCafe, its inside the store premium coffee line which carries many of the same types of drinks sold by Starbucks as well as healthier food choices. Notably, even the standard brewed coffee has improved, selling for less than one dollar a cup with free refills. Oh, yes, most McDonalds now offer wi-fi access and at no charge.

Give Customers What They Want For Less

Dunkin’ Donuts, 7-Eleven, Wawa and similar stores are also getting in on the gourmet coffee trend by offering special blends for prices starting at under one dollar a cup. Wawa, which is a chain of stores serving the mid-Atlantic region, allows customers to fill up on gasoline and go inside to purchase a brew. All sorts of delectable breakfast pastries are available thanks to an in-store bakery; hot breakfast sandwiches are another favorite menu item an are made to order. Besides filling up the car, customers routinely leave Wawa with a meal priced about half that of its high end competitors.

So what does coffee consumption tell us about consumer buying habits? A few things, namely:

• No matter how bad the economy is, there are some things people will not give up. Their favorite beverage along with a tasty carbohydrate laden food item will likely remain in demand.

• People want value. Inasmuch as Starbucks is the favorite brand for many, cash strapped consumers will trade down and be all the more willing to do so if the alternative is fresh, tasty and competitively priced.

• Ambiance is still important for the person who plans on hanging around the shop for awhile. Clean tables, comfortable seats, tidy bathrooms [especially for women customers] and free computer access can lure the one-time gourmet coffee connoisseur. I have noticed that my nearest McDonalds provides a wide-screen television set tuned to cable news in one section of the restaurant along with online access. A closed-in (and mercifully separated) kids play area has another big screen set which regularly shows a recent Disney movie.

Applying This Lesson To Your Business

What does this have to do with the freelancer of small business operator? Plenty! You may not sell coffee but you do have a competitive product which may not be selling as well as it did in the past. Maybe you’ve been adverse to cutting prices or have dismissed offering a budget version in fears of harming your business.

Still, if your clients are going elsewhere you may want to include a “value added” incentive (like that McDonalds does with free wi-fi) as a way to lure in new business. Things have changed much over the past six months but one thing remains the same: people want a good product at a fair price – if you can offer that to them, expect that your business will succeed, perhaps prosper during tough economic times.

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