Is it possible to grow when you only focus on current customers instead of taking sales away from the competitor?
The most recent form of category expansion in coffee is the single-serving cup, fueled in a big way by a curated machine. Coffee artisans pointed out that 95% of coffee consumers buy coffee and then mask the flavor with milk and sugar. However, new types of coffee shops are counting on the fact that, if we treat our coffee consumption like wine tasting, carefully selected and prepared coffee can be a whole new experience. An experience worth upwards of $7 per cup.
What has emerged is the “purist�? segment. The new third wave of coffee consumption doesn’t create a new consumption situation to expand the category. Instead, it requires a conversion of enough “generalists�? to “purists�? to more than offset the high costs of careful sourcing, distribution, storage, and meticulous preparation of specialized beans likened to the grapes from which fine wines are made.
The lesson: in every market, consumer tastes evolve and become more sophisticated and specialized as new offerings emerge. This creates opportunity. For craft beers (now 15% of an $83 billion market and growing 20%) and Greek yogurt (40% up from 1% of a $7.4 billion market), these are conditions in which a continual assessment of customer needs and competitive offerings is absolutely critical to understand both market evolution and how to compete.
Check out the entire article on FastCompany.com.