Coffee is a perennially strong beverage category, but 2017 was more than just another year of growth. From major acquisitions (including Nestle’s purchases of Blue Bottle and Chameleon Cold-Brew) to the escalating arms race between the Coca-Cola Company and PepsiCo in ready-to-drink products to innovative startups disrupting the established market paradigm, coffee continued to evolve and expand with no signs of letting up.
It was also one of the biggest topics of discussion at this year’s BevNET Live Winter conference, held in Santa Monica, Calif. from Dec. 4-5, highlighted by a pair of in-depth discussions on stage with the leaders of two high-profile companies driving category growth: Dave Burwick, president and CEO of Peet’s Coffee & Tea, and Greg Steltenpohl, co-founder and CEO of Califia Farms.
Dave Burwick of Peet’s Coffee On the State of Coffee
Opening a discussion on the current state of the coffee category at BevNET Live, Dave Burwick, president and CEO of Peet’s Coffee & Tea, framed the conversation in simple terms: “I think I’m going to tell you guys everything you already know,” he said, “but it’s probably the hottest category within beverages right now.”
The question, therefore, is not if coffee is thriving, but rather how and why? Burwick noted four touch points for consumers that successful brands in the space have been able to tap into: health and wellness, sustainability, functional benefits and authenticity. A confluence of millennials’ demand for coffee products, particularly cold brew, and the decline in soft drink consumption is pushing the category forward to a projected $5 billion market value by 2020. Burwick explained how Peet’s honed in on freshness as the brand’s calling card by creating its own cold chain direct store distribution (DSD) system, which includes coffee products from Peet’s as well as fellow JAB Holdings brands Intelligentsia and Stumptown.
“This category, no matter how you want to look at it whether it’s ready-to-drink cold brew all the way to selling beans in bags, it is not a zero-sum game,” Burwick said. “There’s so much tremendous growth in the category. And honestly we feel like allies to a lot of players who are out there. We learn from them, they learn from us, there’s so much to be had and I think the competition’s really good.”
Watch the full interview with Burwick and BevNET Editor-in-Chief Jeff Klineman above.
Califia’s Rapid Iteration Process with Greg Steltenpohl
As jazz legend Duke Ellington once quipped, “Forget creativity – give me a deadline.”
In his role as the co-founder and CEO of Califia Farms, Greg Steltenpohl has applied that concept to fuel the company’s constantly moving innovation pipeline. With over 80 SKUs spanning across categories from cold brew coffee to juice and nut milks, Califia Farms has utilized its vertically integrated infrastructure to move products from the conceptual planning stage to store shelves at a rapid pace, striking the right balance between creativity and commercialization that keeps the company ahead of the curve in this burgeoning sector of the beverage market.
“Having some real independence allows us to play with that stuff,” Steltenpohl said about Califia’s approach to innovation. “There’s an aspect that if you go too far into systematics then you lose the heart and soul and the dynamism. If you go too far in the wild then you get too far ahead of where the commercialization can keep up with you. So at the same time, you need something that has a situational consciousness that isn’t driven just by segmentation data but that is more about being in tune with where the market is and what it’s ready for.”
Watch the full conversation with Steltenpohl and BevNET CEO John Craven above.