…. peet's coffee & tea tara alcantara-beers karol caballero yizhe liu daniel brockman uc....
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Peet's Coffee & Tea
Tara Alcantara-Beers
Karol Caballero Yizhe Liu Daniel Brockman
UC. Berkeley Extension Strategic Marketing Ming Yang May 24th 2010
Peet's Mission & Vision
• "To enable and inspire customers to enjoy the daily pleasure of Peet's Coffees & Teas by providing a distinctive, superior product, superior coffee and tea knowledge and superior service to every customer, every day.”
• “To be the gold standard specialty coffee and tea brand available to the world, with one of the most dedicated and loyal customer followings of any brand.”
MISSION
VISION
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General Description of Peet's Coffee & Tea
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•Peet’s is a specialty roaster of whole beancoffee & teas based in Emeryville, CA
• Peet's founded by Alfred Peet in 1966 in Berkeley, California
• Alfred focused on the quality of the coffee
• Original store located at corner of Walnut & Vine near U.C. Berkeley • In 1979 Alfred sold Peet's but stayed on as coffee buyer
• Roasting plant is located in Alameda
Peet's Website/Wikipedia
ALFRED PEET-FOUNDER
1920-2007
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Peet's Company Info
US Statistics: • Public Company
• Retail Stores: 192 in 6 states
• Employees: 3750
• Sales: 311 million
• Competitors: Starbucks, Tully's, Coffee Bean & Tea Leaf, local coffee shops in the retail stores channel, and Kraft and J.M. Smucker in the grocery channel
Yahoo Finance
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2009 Sales Breakdown
Retail Sales (stores only) : • Retail stores remained stable 7% comprising 65% of net revenue
• Retail store sales were 65% of net revenue
• Specialty (consists of grocery, foodservice & office)
• Grocery Sales 22% comprising 20% of net revenue • Sales of specialty coffee was 84% of net revenue
Peet's Coffee & Tea, Annual Report on Form 10-K for 2009
•
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Quarterly Financials
Revenues, Thirteen Weeks Ended (dollars in thousands) APRIL 4, 2010 March 29, 2009 Increase/(Decrease)
Grocery $ 18,643 $ 13,387 $5,256 39.3%
Foodservice & office 8,480 6,706 1,774 26.5 %
Home delivery 4,002 4,029 (27) -0.7%
Total specialty $ 31,125 $ 24,122 $ 7,003 29.0 %
www.peets.com Form 10-Q Quarterly Report Filed May 14, 2010
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Grocery to be Peet's Strength
• Peet's is focusing on Grocery Growth as Starbucks
Shuts Cafes
• Revenues growth year over year in the 1st quarter of
2010
4% in retail stores
39% in grocery
• Operating margins in the 1st quarter of 2010
9% in retail stores
26% in grocery, office and home delivery
• Peet's even has a separate Grocery Website
http://www.peetscoffee.com/
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Target Customers
Customers who care about quality, variety, convenience:
• Quality: customer values most
• Like strong, dark coffee
• Annual household income: +125,000
• Peet's drinker buys coffee from specialty (Peets, Starbucks)
Peetniks:
• Strong loyalty customer
• Morning coffee every day
• Members of the Peetniks loyalty program
• Passionate about Peet's products
• Exclusive benefits to active recurring orders http://www.peets.com/peetniks/about.asp?rdir=1&
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Products
Highly selective sourcing:
• Carefully chosen beans, taste
coffees again and again
• Coffee and Tea Expertise
• Paying the highest prices for
quality
Delivered fresh:
• Use the freshest beans within 24
hours of being roasted
• Brewed fresh every 30 minutes or
less
• Never re-steam milk
Artisan roasting style:
• Roast in small batches
• Draw out the depth of flavor
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Peet's Coffee & Tea Inc, Form 10-k annual report 20100319
Key Success Factors
• Expertise in Coffee and Tea
• Sophisticated information systems infrastructure
Business Intelligence
ERP, POS and CS
• Freshness
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Sustainable Competitive Advantage
• DSD - Direct Store Delivery system
From Roaster to Shelf in 24 hours
• Artisan roasting style
Small batches
• Highly selective sourcing
Long-term relationships with
exporters, brokers & growers
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Taste Test
1212Strategic Marketing - Spring 2010Strategic Marketing - Spring 2010
Promotional Efforts
• In-Store Promotions
• Partnerships with Foodservice Operators
• Online Presence
• Community Service
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Price
Prices of selected medium (grande) drinks
Starbucks Peet's
Regular coffee $ 1.85 $ 1.85
Espresso 1.95 2.20
Caffe Latte 3.35 3.35
Retail stores in Petaluma, California, May 2010, Daniel Brockman
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SWOT Analysis
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Critical considerations
• Grow the company
• Excellent coffee experience
• Responsibility
• Profitability
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Alternative 1: Airborne
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The Concept:
• Partner with airline.• Learn to serve excellent fresh
coffee at 8,000 feet.• Trials on flights from Oakland
Airport, 1 mile from roastery.
Pros:• Creates markets distant from
California in travelers' homes
Cons:• Can we train airline crews to
serve excellent coffee?
Recommendation:
• Conduct a trial and assess.
The Concept:
• Expand Grocery eastward.• Driver: Customer migration to specialty coffees.
o Growing customer awareness of Peet's.
Pros:
• Peet's has financial assets to invest• Rapid growth: 39% in 10Q1 vs. 09Q1• Profitable: 26% operating margin• Better than expanding retail stores
Cons:
• What are the limits to Grocery channel growth?• Large competitors
Recommendation:
• Invest in Grocery star
Alternative 2: Invest in Grocery
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Alternative 3: Instant and Canned
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The Concept:
• Introduce canned and instant lines of coffee.
Pros:• Reach out to new customer segments.• Synergic use for store delivery system.
Cons:• Canned and instant coffee isn't fresh.• Compromise existing standard of quality.
Recommendation:• Let Starbucks do it.
Summary of Recommendations
• Try airborne Peet's coffee.
• Don't produce Instant or Canned coffees.
• Expand distribution through Grocery channel.
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Questions?
2121
Appendix 1:
2222
Community Service:
• Partnerships with International Non-Profit Organizations Grounds for Health Coffee Kids TechnoServe Utz and Rainforest Alliance Certification
• Global Initiatives KIMSSA Las Hermanas The Butterfly School International and American Red Cross
• Local Sponsorships Local School fundraisers Back to the Roots Ventures Athletic fundraisers Culture and Arts NPOs
Appendix 2: Promotional Efforts
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Appendix 1: Pivot of age vs kind.
Question 7) Which kind of coffee do you like?
Question 2) Age:
I don't like coffee Light Medium
Sometimes one and sometimes another
Strong dark roasted
Grand Total
55 1 4 1 6
18-35 3 6 8 2 9 28
36-54 1 1 6 1 12 21
Grand Total 5 7 18 3 22 55
2424