Purchase Decisions at World of Coffee
SPENCER TURER explores the dynamics of making quality determinations and conducing product research at trade events.
When buyers and sellers gather, a marketplace is created. The World of Coffee is a marketplace with many opportunities to discover uncommon and interesting coffees, as well as innovative technologies and operating equipment. Our marketplace is as unique as our industry; relationships typically take priority over other purchasing decision factors, but the discovery process for coffee should not be limited to existing relationships. Both buyers and sellers are encouraged to take advantage of this dynamic marketplace and seek new connections.
Making quality determinations and purchase decisions at trade events create different issues and concerns than doing the same work in your place of business. Buyers consider purchases based on four decision factors: price, quality, availability, and relationship, with the priority of the decision-making process often changing due to business factors and business needs. Buyers tend to be more comfortable when conducting business with a person, brand, or product which they are familiar, reinforcing the importance of relationships in the buying process.
Coffee analysis at formal cupping events (and informally at company booths) provide excellent opportunities to explore new and often extraordinary coffees to add to a menu. In this situation, quality may be the primary decision factor. Product demonstrations at company booths are efficient when exploring equipment and technology. In this situation, the decision factors become more complicated when integrating into existing businesses. Particularly, for start-up operations, availability and price may be the primary decision factors based on what is affordable and what is able to be supplied before the business opens, however a balance with quality is required to create a unique selling proposition.
We are fortunate in the specialty coffee industry that the prevailing intention is to develop business relationships that are mutually beneficial and rewarding. Typical commerce is best described by the Latin phrase caveat emptor meaning buyer beware, requiring the buyer to take great care in conducting their due diligence to determine the appropriateness and acceptability of both the seller and the product under consideration. At the World of Coffee and Specialty Coffee Expo, buyers and sellers still need to interact with care, but knowing the importance placed on business relationships and the ease of obtaining opinions on historical performance and recommendations based on reputation, the risk is somewhat reduced.
When making purchase decision for equipment at the World of Coffee, there are many factors to consider and – unless you are proactive and prepared – you may not have access to the detail you need while traveling. For example, design and layout concerns include integrating into the current utilities for power, venting, drainage, etc. Will the equipment you’re considering fit into the space you have available? Does the software communicate with your existing technology? Other operational concerns you’ll likely want to take into account include resources for training, impact on speed of service, access to service technicians and spare parts, and effect on product quality. You’ll also likely have financial considerations, too, as you’re making capital investments – these include measuring the return on investment, which may be in operational capacity, efficiency, speed of service, or menu expansion.
The seller may offer assistance in the due diligence process, but the responsibility is on you, the buyer, to fully investigate the details before making a purchase decision. There are obviously great differences between considering buying a large capacity coffee roaster or packaging equipment than when buying an espresso machine or under-counter integrated brewing system when it comes to the scope of research and risk involved.
Coffee decisions may seem more straightforward and less complex than for equipment, yet the discovery and diligence process should be just as rigorous. A unique selling proposition is a marketing concept designed to convince consumers to switch brands/products by differentiating your coffee or services amongst competitors. It is hard to individualize when competitors have the same or similar coffee offerings. Remember, what may seem unique and exotic during the discovery process may not resonate as highly with consumers; such is the difficult challenge of product development.
Being prepared to make purchase decisions at a trade show includes knowledge of your menu, details of your inventory positions, and how much elasticity of cost of goods and selling prices you have in order to maintain profitability. Will the new coffee fit into your operation relative to quality, availability, and price? These are all internal business factors that should be easy to determine. The due diligence process become more complicated for the next set of purchase decisions. Will this newly discovered coffee fit into my existing supply chain or will new relationships and logistics need to be developed?
Understanding consumer behavior is very difficult to predict while exploring new coffees. Exotic, esoteric flavors from emerging origins are exciting for green coffee buyers and roasters but may not be equally appreciated by consumers. This is where “emotional quality” becomes important. When you are deciding on equipment, technology, or coffee, there is a definite intangible emotional quality factor that should be recognized in your purchase decision process. For example, you may have an affinity for the seller, experiential knowledge obtained through this relationship, or external influences as a result of your business and social participation at the trade event.
Emotional quality can also negatively impact your decision as a result of animosity or aversion. Your mental state, stress, or even external sensory perceptions may cause the same quality determination to be improbable at any other time or place or by any other person. To correct for emotional quality influences, the final determination for any purchase decision should be made in a familiar environment – like your place of work – with controlled methods of testing and reasonable due diligence research based on the four decision factors (price, quality, availability, and relationship).
Relationship between sellers and buyers will be strengthened, not harmed, when an event like World of Coffee or Specialty Coffee Expo is used for due diligence investigation and discovery. Long-term positive relationships are built upon respect and completing mutual rewarding transactions. In our unique marketplace, where relationships take a priority over other decision factors, taking the time to make the right decision will benefit both the buyer and seller. Sellers wish to ensure that appropriate and appreciated products are supplied and that buyers integrate these products productively and profitably into their businesses. When both are achieved, the consumers benefit, relationships are strengthened, and repeat business occurs.
SPENCER TURER is vice president at Coffee Enterprises, a founding member of the Roasters Guild, a licensed Q Grader, received the SCAA Outstanding Contribution to the Association Award, and remains an active volunteer for the SCA.