I picked up a bag of coffee beans whilst we were on holiday, roasted by Skye Roastery and sold out of the Skye Farm Shop (“Local Produce for Local People”). The coffee is especially interesting for me personally because I’ve been using coffee as a proxy for how MTPW>MPWT can play in even existing, seemingly saturated markets, but I was fascinated to find both the roastery and the shop on Skye, because it shows again just how quickly (and far) ideas can spread through culture.
Let’s think about two waves of coffee culture in the UK (and other countries too, but I know the UK best), assuming year zero as the time when coffee was either being a poor italian imitation in restaurants or instant out of a jar in a cafe.
The first wave is the chains, which revolutionised the experience around buying coffee (Starbucks, Nero, Costa et al), though arguably their coffee isn’t that much better than what you could expect at the end of your meal in a decent restaurant. But it wasn’t so much about the coffee as the thing that connected people, but the places they drank it in. The second wave is the Artisan Coffee movement, where the quality, provenance, style, technique and other factors about the coffee itself very much is the thing the connects people.
The first wave has not reached Skye. There are, as far as I can see, no coffee chain shops on Skye (the nearest Starbucks, for instance, is 113 miles away). But, interestingly, the second wave has taken hold, and is evident in a lot of the places you can buy coffee, before the first has.
Interestingly, in a place where the second wave hits first, like Australia, it’s hard for first-wave style businesses to make inroads – “95 percent of the 6,500 cafes and coffee shops in Australia today are independently owned” according to the Slate article, despite Starbucks first having tried to extend into Australia in 2000.
It’s kind of simple when you think about the differences between the two. The first wave needs things like:
– physical bricks & mortar stores
– a consolidated, consistent approach (or ‘brand’ if you will)
– centrally owned entities
– a minimum level of market size and opportunity in a certain location order to bother setting up there
The second wave, as evidenced by the Skye Roastery packaging, instead needs:
– the idea that there is one place things are done (the ‘roastery’ itself)
– the right cues that lots of other similar roasteries use as a brand (“Artisan”, Provenance notes, Black & White hand stamped labels)
– a loose affiliation of ‘people like us’ (the other shops who sell and serve the coffee)
– a much smaller, yet simultaneously less geographically specific market opportunity
The second wave coffee shops share an unoffical, decentralised brand. Swedish wood counters, slate & chalk pricing boards, bearded folksy looking baristas. It isn’t an official thing, there isn’t a formal checklist, it’s just people looking, thinking ‘I could do that’, and copying in their own way. As a crude shorthand, knowledge is faster than mortar.
And not just the physical mortar of having to build and fit out locations. The slow, leaden process of sticking organisations, brands and markets together in one place means that the first wave is always going to take longer to put together than the second wave. But they become bigger entities as a result, surely?
Whilst the first wave chains are invariably worth more money (and I’d guess a lot more), it’s very hard to judge how much the second wave is worth because, well, they’re all independent of each other. Every time I find a long list of ‘independent coffee shops’ like this one, invariably it’s more notable for the omissions.
It’s invariably really hard to keep track of all of the independent coffee shops and roasteries (not forgetting the mail order coffee start-ups like Pact or Eight Point Nine). In his chapter in Brand New Brand Thinking (2002) John Cronk talked about how Marketing was like yacht racing – there’s a start line, a finish line, but in-between you’d invariably postion yourselves by what the other yachts were doing, accoerding to who was finding a good line. Yet by and large the instruments available to us are set up to look at other ‘yachts’. How do you set yourself up to look at all the canoes, speedboats, jet-skis and other small nimble craft at the same time?
It’s largely impossible to set a value on what this market is worth, because of the speed with which they will set-up (and sometimes disappear again). In some ways, the independents are to coffee what Anonymous is to politics.
(from Australian coffee shop ‘Anonymous‘)
They’re not one entity, there is no consistency, there is camaraderie and occasional fractious rifts between members (if indeed, membership is a thing that can be defined). There are a loose set of cues that anyone can pick up and run with, yet it’s hard to fake – the community is pretty good on vetting anyone who doesn’t ‘fit’ – Tesco’s 49% ownership of Harris + Hoole, for instance, was jumped upon rather quickly, which will likely force it into competing with the first wave chains as a proposition, rather than a halfway house between the two.
What’s also interesting is how neither fits with the old model which they rail against. You can’t vote for Anonymous, or form a coalition with them, or even sit down with the leadership and talk about doing things together. Because they’re not built like that. The old mechanisms don’t fit the new social structure.
Equally, if one of the established first wave chains decided that the second wave was worth investing in… where would they start? Despite the success of the emergent second wave, there’s not an entity there to acquire, as such. And even if Starbucks did buy one or two of the independents… what would they do with them?
As always, coffee is my chosen sector to use as a proxy for what might be at play in other sectors. Something that caught my eye whilst thinking about this was the latest focus is on the falling sales for the big four supermarkets, and the implied answer from centralised measurement tools is that it’s being stolen away by the other challenger ‘yachts’.
Nowadays, we have to keep in mind that the money in peoples’ pockets isn’t just going to one of the other competitors on the research list.
Just because you can’t see it, or measure it, doesn’t mean it isn’t there, growing, and significant.