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A few days ago we traveled from the Colombian coffee region directly to Charlotte, North Carolina, United States to attend the Velocity 2022 Conference. For more than 15 years Buencafé has been actively immersed in the segment of private labels because of our premium 100% Colombian coffee products and tailor made scheme, which allowed us to generate value for private brands that were seeking a differentiator factor. Therefore, having first-hand insights about the retail industry, its challenges and trends permit us to accompany our clients and continue strengthening their premiumization goal. Key findings on the conference were: the challenge for private brands in maintaining their value proposition in crucial times, connecting customers with a purpose, seeking sustainable solutions, and shifting to more sustainable packaging alternatives.
1.Maintaining value proposition in crucial times
Facing supply chain disruptions and inflation. According to Daymon research in 2021, National brands were compared to Private ones´ and 82% of consumers say private brands now have a better value, 55% of consumers say private brands meet their needs better and 86% say private brand quality is just as good if not even better. This means that private label suppliers have been doing an excellent job with product quality and reliability. However, keeping up the positive perception 2022 is challenging. Supply chain disruptions, inflation, and plateauing online sales may trigger product shortage, price increases and selling channels adjustments. Consequently, customers could be more prone to switching behaviors – brand switching triggered by more affordable options leading to substitutions. These market circumstances push reinvention, evaluation and implementation of internal processes to keep operating as smoothly as possible despite the challenges.
2.Connecting with a purpose
Customers want to feel inspired by true stories. Customers want connection, they want the full story and feel emotions towards the product they are purchasing. Hence private brands are challenged to go beyond the product itself: transform, inspire, and reconnect with a purpose, expose how the product interacts and improves people’s lives. Starting from the origin, involving the people who planted the seeds, harvested the crops and picked up the product. Then, the transformation process it had, transportation to the supermarket, until it arrived in their hands. How to communicate their impact by buying the product is essential. For example, Buencafé has been working on strategies to share what makes it unique. Being the only company in the world whose owners are the coffee growers of a country, Colombia and 100% of the profits invested in 540,000 coffee farmer families. This is our purpose and we are in the process of communicating to our stakeholders, however articulating this communication requires re-thinking traditional. In conclusion, all actors of the supply chain must work towards not only to offer an excellent product, but to have an impact on people’s lives connecting among a
3.Seeking sustainable options
Consumers want to #BeConscientious. As consumers care about health and sustainability increases, brands are challenged to choose between different raw materials, packaging alternatives and supplies used to produce their goods. Purchasing departments and buyers themselves have to make decisions based on these hopes on helping to make this planet a better world. However, price and availability are still on the table. Alternatives such as product certifications (Organic, Fairtrade, Rainforest, UTZ among others) have become a must for consumers, but it is just one step along the supply chain. Coffee and cocoa industries are leading environmental and social responsibility models that may be transferred to other sectors. Learn more about our sustainability initiative here. Still the challenge is aligning of all actors in the design of attractive and competitive products and strategies to solve the customer’s concerns and unite on taking actions that promote planet awareness.
4.Shifting to more sustainable packaging alternatives
From functionality to environmental friendliness. For several years, Private Brands have participated in packaging design competitions where judges evaluate concept, color combination and functional designs. Although, during the past few years, packaging concerns have arised, this means R+D teams are facing the challenge of combining traditional packaging criteria with environmentally friendly alternatives. Using a single color, playing around with a few shades, incorporating recyclable materials, adopting second use packages, among others, have become popular in packaging design teams. In this sense, Buencafé has been working on single-material packaging, paper labels, and advanced prototypes on natural fiber lids, gradually adapting to new challenges. However there is a long way to go in terms of packaging innovations and the use of new materials; a very interesting and motivating challenge for the Private label industry.
Acquiring first-hand insight of the industry translates into better preparation to accompany our clients to navigate in a fast paced and a changing world. In Buencafé we are committed to the strengthening of our premiumization differential and we will be working optimistically on the four main trends which is where the Private Brands Industry is heading. Concluding there are four big actions to prioritize: maintaining value proposition in crucial times, connecting customers with a purpose, seeking sustainable solutions, and shifting to more sustainable packaging alternatives.
Every year, between August 23rd and September 1st, the Stockholm City Conference Centre in Sweden becomes the focal point for