I'm channeling my inner Coffee Contrarian here...
In this article from Daily Coffee News the author talks about Whole Foods' strategy of using extremely discounted cups of coffee to draw customers into stores.
Last week, the publicly traded Whole Foods Market announced that as part of its new “Love Fest” customer appreciation campaign, all locations will be giving away unlimited 25-cent cups of coffee through Sept. 30.
Let me get this straight, Whole Foods is 1) promoting coffee consumption via significantly discounted cups of brew and 2) bringing attention to their coffee bars — where the discounted coffee is served — and this upsets someone in the specialty coffee industry? Whole Foods is a friend of the specialty coffee industry! In the author's own words:
[Whole Foods is] a company that has built a grocery empire convincing customers to pay premiums for virtually all its inventory based on concepts such as quality differentiation, ethical sourcing, locality, and social and environmental sustainability
Every single one of those buzzwords represents core principles of the specialty coffee industry. A large grocery store chain that uses its considerable market influence to advance those principles should be supported by the specialty coffee industry.
Getting customers to the coffee bar at Whole Foods, even for a deeply discounted cup of coffee, gets eyes on the coffee products and generates interest in the coffee products. It's not "throwing coffee under the bus." It's supporting coffee.
Not to mention the fact that every time a coffee company provides free samples to entice customers to try their products, its practicing loss-leader tactics. I used to do this at the farmer's market in two ways; by giving away free samples simply to start the conversation and by providing discounted brewed coffee to generate or maintain interest. Neither the samples nor the brewed coffee produced decent profits. Most of the profit came from the main product I was selling; bags of roasted, whole-bean coffee. The samples and brewed coffee were tools to sell the whole beans (which had the best profit margin).
DCN is off-the-mark on this one and it's another example of the way the specialty coffee industry in general needs to get off its high horse.Updated January 19, 2018: corrected Freudian-slip of swapping "Starbucks" for "Whole Foods."