The McCafé Effect?

Are brewing upgrades at convenience stores and fast food locations, such as McDonalds and McCafe, a reaction to consumer demand, or are they an innovation?

By Rob Stephen

In 2007, I was hired by a convenience store client of mine to fly to North Carolina on a “secret mission.” My task was to spend the day driving around to four different Raleigh-Durham, N.C. area McCafe stores and…drink the coffee. At the time, these four stores were some of the only McCafes to be found in North America, so these out of the way stores were probably visited by more than a few coffee company executives. I don’t have to imagine the bemused look on the counter staff’s faces as they fielded geeky coffee-related questions, because I witnessed it firsthand.

As I asked questions of increasing difficulty about the products and processes in the store, it became apparent to me that the staff had been trained to the same basic level that the average coffeehouse employee might be trained to after a week or two. They weren’t going to impress me with extensive coffee knowledge, but they weren’t going to embarrass themselves either. Sure, the “espresso” came from a super-automatic with a very quick pour, and the milk was steamed automatically. But, I got the same beverage in all four stores, and it came without any cup defects…or attitude.

Flying home that evening, I wrote the following in my report: “The good news is they aren’t doing anything incredibly new, innovative or special. The bad news is they’ve met the minimum acceptable coffeehouse quality standard (consistent with no defects) for half the price…and they could open 10,000 of them whenever they choose.” In other words, this concept was not going to ever replace the top end of specialty coffee; by its very nature, that segment of the business cannot be replicated on that scale. However, the minimum standard was about to get a big push upwards. My belief was that those that were talking about quality but selling on price were going to have to step up their game.

In reality, the last three years really have seen rapid change for the so-called “commercial” segment of the market. Many convenience stores, grocery stores and other outlets where people purchase coffee regularly have realized that they have the permission and obligation to have a branded coffee, and that people will judge their brand on the coffee’s quality, not just its price.  As a result, blends, brewing methods and marketing of coffee in these sectors have gone through a major upgrade.

What I think has been the most significant demonstration of this change has been in the way these companies perceive themselves. In the past, a convenience store chain perceived itself to be in the convenience business, and as a result, they sold things that people wanted to obtain quickly and cheaply. Their brand was the sum of the selection they carried, the convenience factor of their store layout/geography and their prices. Today, the successful chains realize that their brand has evolved into something more complex. The choices they have made about the factors above indicate a point of view on the quality of the customer experience, and customers have aligned themselves with certain brands accordingly. Since coffee is still largely purchased by brand, their customers, who have incorporated a daily purchase of their coffee into their routine, have brand-level expectations of coffee. They are no longer “companies that sell coffee.” They are coffee companies. They now realize that they must act like it.

How do they act like it? For starters, companies that do not roast coffee must begin to think about coffee as if they were coffee roasters. Most Specialty Coffee Association of America (SCAA) members would be surprised to know that many convenience store chains have blends that are closer to SCAA specialty grade than to commercial grade. Convenience stores? Yes.  Specifications which once were as simple as “Arabica coffee – smooth flavor” now list origin, defect counts and very specific cup profiles (often in SCAA format). Brewing standards have quietly gone through a similar upgrade. Gone are the days of glass pots on an eternal hot plate with two ounces of coffee for 60 ounces of water. Now it is easy to go into a convenience store and find high throw weights (SCAA Golden Cup standard or very close), grinding before brewing and the removal of glass pots on warmers in favor of thermal servers.

Does this mean that convenience stores have “gone specialty?” Of course not. What it does mean is that the minimum standard of what is acceptable in the coffee marketplace has begun, albeit slowly, to move upwards. The media, in its quest to find a mass market story, would like to call this “The McCafe effect.” However, I beg to differ. If we look closer, we can see that this is a clear case of cause and effect, and that the creation of McCafe was a reaction, not an innovation. The upgrade at the convenience store level was also a reaction, not only to McCafe, but to the outcry from consumers in general. Where did this come from? It comes from the thousands of independent specialty coffeehouses, who through their involvement with each community in the United States, have exposed the population to the joys of specialty coffee and created the expectation that good coffee is a right, not a privilege.

A cherished coffee industry mentor of mine once said, “It is my dream to be able to drive across the United States, from coast to coast, and get a good cup of coffee at every rest stop, every hotel and every gas station along the way.” We are not there yet. But, members of the SCAA, a trade association that was founded in a spirit of differentiating quality-driven coffee retailers and roasters from mediocre coffee, have begun to make this possible. Aided by the tireless work of the SCAA and its volunteers in setting standards and promoting the benefits of coffee quality, the members of the SCAA have begun to move the needle on what consumers expect from coffee. “The McCafe effect?” Hardly. Our revolution will not be televised!

Rob Stephen is the president and founder of Coffee Solutions, a training, consulting and laboratory services firm located in Massachusetts. Stephen has worked for numerous specialty coffee companies in his 22 years in the coffee industry, and he was president of the Specialty Coffee Association of America  in 2006. He can be reached by e-mail at rob@coffeesolutions.net.

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