Philz Coffee: All You Need Is The Secret Ingredient

Business Insider: San Francisco-base Philz Coffee “has the cash to fuel an expansion and a key ingredient to become the next Blue Bottle: individuality. It looks nothing like a cookie-cutter coffee chain. At Philz, a diverse set of customers sit around mismatched pieces of furniture and drink coffee brewed one cup at time. Employees are encouraged to express their personality through interactions with customers … The venture-backed coffee chain started from humble beginnings. Phil, who was born in Palestine and grew up in the Bay Area, ran a corner bodega in a gritty neighborhood.”

“Today, the original Philz location on 24th Street still looks like someone’s grandma’s house. Couches sink like they’ve been lived in, and floor-to-ceiling murals spark creativity … Unlike coffee chains that offer only light, medium, and dark roasts, Philz boasts more than 20 vibrant blends with names like Canopy of Heaven, Philharmonic, and Sooo Good. You won’t find any lattes or over-the-top blended drinks — like you might find at Starbucks — on the menu. But flavor descriptions like “cardamom, maple, earth” or “toast, berry, vanilla” have customers drooling.”

“Baristas brew one cup at a time using a pour-over method, which allows them to make each drink exactly how the customer likes it … Two to three minutes later, a barista calls the customer by name and invites them to take a sip. Baristas say they’re happy to remake the drink until the guest is 100% satisfied … According to a Philz employee, the secret ingredient in every cup is ‘love’ … The company aims to have more than 50 locations across four major metropolitan markets by early next year. There are shops in Colorado and Boston in the pipeline.”

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KitKat: Just Plain Weird in Japan

Los Angeles Times: “Two years ago, KitKat’s marketing manager in Japan won an internal corporate award. His prize: a golden trophy shaped like one of the iconic chocolate bars. Today, the manager, Ryoji Maki, doesn’t remember why he won the award. But he’s immensely proud of what it inspired. ‘That’s how I came up with creating a gold leaf-covered KitKat,’ he said. Before long, the chocolate wafer bars were on sale in Tokyo for about $18. ‘They were like an edible golden trophy’.”

“Maki’s creation joined a long, and ever growing, list of distinctive, fun or just plain weird KitKats found only in Japan. The country is a KitKat-lover’s paradise, with so many unique varieties — an estimated 300 — that some travelers visit Japan just to try them. Many flavors are alien to the American palate, and they go far beyond Japanese staples — such as sake, wasabi and green tea — and into uncharted territory: ‘French salt,’ ‘college tater’ and ‘Muscat of Alexandria’.”

“The candy with the European pedigree went on to conquer Japan thanks to constant invention — blueberry cheesecake, cherry blossom and melon — and a linguistic coincidence that makes KitKats here a harbinger of good luck … the chocolate bar’s English name is a cognate — it sounds like kitto kattsu, which means ‘you will surely win,’ a sort of good luck blessing. Nestle leveraged the association into huge sales.”

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Shanghai Surprise: World’s Biggest Starbucks

The Washington Post: Starbucks has “opened its largest store in the world: a nearly 30,000-square-foot compound that does much more than simply serve coffee. The new Starbucks Reserve Roastery … in Shanghai, is the first non-U.S. location of a new series of shops designed to offer a more ‘immersive’ experience for coffee lovers, according to Starbucks.”

“It includes three coffee bars, one of which clocks in at 88 feet long — the chain’s longest to date. The coffee bars will serve brews made from beans grown in China’s Pu’er in Yunnan Province … A two-story, 40-ton copper cask towers over the store, refilling the coffee bars’ various silos … As a nod to the local beverage of choice, it also includes a tea bar made from 3-D printed materials, and an in-house bakery employing more than 30 Chinese bakers and chefs.”

“The experience seems curated to keep people milling about the store. It is the first Starbucks location to integrate augmented reality, which refers to technology that combines real-world surroundings with tech, in this case the customers’ smartphones. They can point their phones at various spots around the cavernous room to learn about the coffee-brewing process … The store’s boasting rights as the world’s largest won’t last long, though. The company plans to open a 43,000-square-foot location on Chicago’s Michigan Avenue in 2019.”

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Toblerone & Trademark Triangulation

The New York Times: “When the makers of the distinctive Swiss confection Toblerone reconfigured their triangular treat last year to slim down its hallmark summits and widen the valleys between them, a potential rival — Britain’s Poundland discount chain — saw a niche in the market … while the classic Toblerone bars had become lighter in weight in the reconfiguring — though their price remained the same — Poundland’s bar would be chunkier and cheaper, at one pound, or about $1.35, each.”

“Not, of course, that this was some crude copycat. If, as some contend, Toblerone was modeled on the soaring pyramid of a mountain — the Matterhorn on the Italian-Swiss border, which is about 14,690 feet high — Poundland’s bar was said to have been inspired by two less vertiginous hills in the English county of Shropshire near the border with Wales — the Ercall, at 460 feet, and the Wrekin, at 1,335 feet. Hence the shape of the Poundland bar, with a double set of summits between each valley. And hence its name: Twin Peaks, with what Poundland called ‘a distinctive British flavor compared to Toblerone’s Swiss chocolate nougat’.”

After some legal wrangling, Poundland “was permitted to begin selling in its nearly 900 stores the 500,000 bars already in production — provided it changed the background color of their wrappers from gold to blue. And the lettering was changed: to gold, from the original red. Once the initial 500,000 bars have been sold, Poundland said in a news release, it will ‘revise the shape’ so that the bar ‘better represents the outline of the Wrekin and Ercall hills’.”

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Chock Full O’What? Yes We Have No Nuts

The New York Times: “It is almost as familiar a part of New York lore as a taxi or King Kong or the building that he climbed — a can of Chock full o’Nuts coffee. But then it became a New York export. And as the quintessentially recognizable can crossed the Mississippi River in a push to go national, concerns arose about one word on the label that might not play well in Omaha or Oklahoma City — nuts. So Chock full o’Nuts has put what amounts to a giant disclaimer on the can: ‘No nuts’.”

“Do people really think that Chock full o’Nuts cans are chock-full of nuts?Apparently so. Convincing consumers that there are no nuts in Chock full o’Nuts is, well, a tough marketing nut to crack.” Marketing chief Dennis Crawford comments: “Every time we’ve done consumer research on why some people do not purchase the product, the No. 1 thing that comes back to us is there’s something in the coffee. Most of the people in New York — we’ve been there forever and they get it, but if you’re in Omaha and suddenly we’re on the shelf and you see the brand for the first time, there’s confusion.”

“The ‘no nuts’ panel on Chock full o’Nuts cans summarizes the history of Chock full o’Nuts. ‘1920s — we sold nuts. 1930s — we sold nuts and coffee. Now — we don’t sell nuts. We just sell coffee. But we like our name’.”

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Gucci Gobble: The $300 Turkey

The Wall Street Journal: “When it comes to this year’s holiday bird, New Yorkers aren’t afraid to break out their wallets. A number of gourmet markets and high-end butchers throughout the city are selling specialty turkeys for Thanksgiving that run $200-$300-plus. And in most cases, that doesn’t include sides. At Eli’s Market on Manhattan’s Upper East Side, options start at $6 per pound for a free-range, all-natural turkey, but can go as high as $11 a pound for a ‘heritage’ breed variety.”

“Purveyors of these pricey birds say they have no problem finding customers. Le Coq Rico, a restaurant in Manhattan’s Flatiron District that specializes in poultry, says it has sold out of its allotment of heritage turkeys for to-go orders, priced at $280 each with sides. The restaurant is offering a variety sourced from a Kansas farm, where, according to Le Coq Rico manager Patricia Grunler Westermann, the birds have plenty of pasture to explore. The result, she says, is one tasty turkey. ‘You really feel how they live’ with every mouthful, she said.”

“Still, some food experts remain skeptical, noting that turkey isn’t very flavorful—no matter where it is sourced or how it is raised. Hence, the reason the Thanksgiving meal is so much about the side dishes. ‘Unless a turkey can get up, turn on the oven and put itself in the roasting pan, it is rarely worth much more than a dollar a pound,’ said Allen Salkin, a New York-based food writer.”

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What The Nutella?

The Washington Post: “Nutella confirmed on its Twitter feed that the recipe ‘underwent a fine-tuning’ after Germany’s Hamburg Consumer Protection Center said on Facebook that it appeared the recipe had changed. That set off both panic and anger on social media in a symphony of languages — English, German and Italian chief among them … Ferrero, the Italian company that makes Nutella, Tic Tacs and Ferrero Rocher chocolates, insisted that ‘the quality . . . and all other aspects of Nutella remain the same,’ in a statement obtained by the BBC.”

“The changes are to its milk and sugar content. The new recipe has 8.7 percent powdered skim milk, instead of 7.5 percent. It also contains 56.3 percent sugar, instead of the previous 55.9 percent, the Hamburg Consumer Protection Center said, according to Deutsche Welle.”

“The outcry is slightly ironic when considering the candy’s history. Nutella was created by an altered recipe for a chocolate spread. It was invented by Italian chef Pietro Ferrero after World War II out of necessity, according to the BBC. Cocoa was hard to come by in postwar Italy. In an attempt to make a chocolate paste without much chocolate, he decided to stretch a little bit of cocoa a long way with hazelnuts. He shaped this into a loaf he called ‘Giandujot,’ after a carnival character … Years later, Ferrero’s son Michele would tweak the recipe and rename it ‘Nutella,’ and it became a worldwide sensation.”

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Starbucks Upscales With Princi Bakeries

The Wall Street Journal: “The opening of luxury Italian bakery Princi inside Starbucks’s Seattle Reserve Roastery is one way the coffee giant is seeking to differentiate itself. Starbucks last week reduced its long-term sales and profit growth outlook due to the difficult retail environment. Howard Schultz, who stepped down as chief executive in April to focus on developing high-end coffee shops within the company, said Starbucks needs to create another brand tier to appeal to more affluent consumers.”

“Mr. Schultz said he envisions including Princi bakeries inside all of the Roastery shops the company plans to open globally. Roastery sales still are too small of a contributor to move the needle for the company’s earnings. But the average transaction in the Seattle Roastery—a tourist destination—is $20, compared with $5 at a traditional Starbucks, Mr. Schultz said.”

“Starbucks said it is also planning to open 1,000 standalone Princi bakeries around the world, with hundreds in the U.S., serving small-batch Starbucks “reserve” coffee.”

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Coffee Shops Diversify As Traffic Slows

The Wall Street Journal: “Consumers are visiting traditional coffee shops less often when there are a plethora of cheaper options. Everyone from McDonald’s Corp. to gas stations is hawking specialty coffee. Even grocery stores are expanding the space devoted to bottled and canned coffee drinks, which Mintel says poses a threat to coffee shops. Traffic growth to large coffee chains such as Starbucks is slowing, while traffic to small coffee chains and independent shops is declining, according to NPD Group Inc.”

“The troubles facing the coffee business are similar to those plaguing the broader food-retail and restaurant industries, which have an oversupply of retail space that are competing against a proliferation of new food options. In addition, coffee shop visits are less frequent with people curtailing mall shopping and as they work from home or spend more time in their offices during the workday.”

“Caleb Bryant, senior food service analyst at Mintel, said that sales growth for many coffee chains or shops will have to come from an existing base of coffee drinkers shelling out more money for evermore complicated and expensive drinks. Starbucks and Dunkin’ are appealing to more affluent consumers who can pay more for specialty drinks like nitrogen-infused cold brew and vanilla chai … Stumptown, Blue Bottle and Intelligentsia are offering subscription services, selling their beans to hotels and restaurants and getting packaged products into grocery stores as a way to supplement their cafe business.”

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V8 & Mr Peanut: Iconic Brands No More?

YouGov BrandIndex: “Two of the most well-known legacy supermarket products — V8 Vegetable Juice and Planters Peanuts — show significant declines in multiple consumer perception metrics over the long-term … From 2013 through the present, both of these brands have suffered their own distinct issues, and one big shared one: millennials.”

“Both V8 and Planters Peanuts are seeing their levels steadily eroding over the past four years, almost entirely brought down by millennials. 94% of all consumers were aware of V8 in January 2013, slipping down to its current 85%. Planters took a steeper drop of 17 percentage points, dropping from 95% down to 78% over the same time period … Millennials change the picture entirely, especially for Planters Peanuts: V8 is down 14 percentage points (from 86% awareness to 72%) with the younger crowd, and Planters Peanuts sees a 32 percentage point fall (from 83% awareness to 51%).”

“V8’s Value and Quality perception with overall consumers has also been falling steadily since 2013. Except in this case, instead of millennials, adults 50 and over dominate the growing negative numbers behind these two metrics, perhaps having been priced out of purchasing the vegetable juice. Consequently, Purchase Consideration by boomers of V8 has declined as well: the juice went from 43% of adults 50 and over considering buying V8 the next time they were purchasing a beverage to 33% now.”

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