Single-Origin Coffee Amid the Patio Furniture and Swimwear

To get a taste of coffee that’s made it to the top tier of one of the Cup of Excellence competitions around the world, you’d expect to go to a boutique café in Seattle, San Francisco or New York. Actually, you can just head to Target (yes, that Target). The retail giant has been buying prized COE micro-lots though Portland, Ore.-based Coffee Bean International since 2006, selling the coffee in 10-ounce whole-bean packages under its Archer Farms grocery label. And the Minneapolis monolith seems to be getting increasingly serious about its Cup of Excellence participation. Last year, the company bought five coffees in four COE auctions, including the top lot in the Colombia event. This year, Target and CBI have already bought in two auctions and picked up another first-place coffee, paying $28 a pound for green beans from Finca Suiza in early June.

All this leads to one overwhelming question: Why the heck is a big box interested in world-class beans? Fresh Cup talked with Cara Sylvester, who recently assumed the role of coffee buyer at Target, as well as CBI roastmaster Paul Thornton to find out.

FC: What drew Target to Cup of Excellence—and specialty coffee as a whole—in the first place?
Sylvester: “Expect more, pay less” is our brand promise. We execute that in different ways throughout the store. You can look at the Go International program, which we have in apparel; it’s really taking top designers and making affordable styles available to our guests. We’re bringing a similar function into grocery by bringing the highest-quality coffee to our guests. We’re really proud of it.
Thornton: Going back a few years, Target said, “We have this coffee program, what can we do to support quality coffee in the industry?” We came back with the recommendations that they start to embrace some of the higher-specialty things that were going on out there. One of them was participation at the SCAA conference, where Target had a booth. It was an investment they made partly so people would know they were serious about supporting specialty coffee. That led to supporting the Cup of Excellence program.

FC: With so many Target stores but only a limited amount of coffee from these small lots, how do you deal with distribution?
Sylvester: We’ll send a limited quantity, as small as three units, to each individual store to make sure we’re making this available to everybody. I will say people find out about it and things sell out quickly.

FC: You sell the Cup of Excellence offerings for $14.99 per 10-ounce container. Considering what COE coffee goes for at auction, does this mean you’re selling it a loss?
Sylvester: That’s exactly it. We look at Cup of Excellence as a broader strategy. From a pricing and economic standpoint, we talk annually about what our strategy is and go from there. There are certain cases where we are going to be selling the coffee below cost. For us, it’s not a money-making program. It’s about bringing excellent coffee to our guests.
Thornton: If you go to some of the retail stores around town, you can find some of the Cup of Excellence coffees being sold for $25 or $35 for half a pound. It’s really difficult to give the consumer the opportunity to try coffee like that.

FC: There’s an argument to be made that you’re wasting this super-premium coffee by selling it without a barista on hand to prepare it properly.
Thornton: I actually don’t agree with that. I think excellent coffees are easier to work with. In order to get 100 percent of the experience out of it, there’s a process you should follow from the extraction standpoint. … But the better the coffee is, the more forgiving it is. So if you don’t brew it right, maybe you only get 75 or 80 percent of its true value out, but when you’re working with a less-than-par coffee, if you don’t get that right, it’s already starting on a low level.
Sylvester: You have to keep in mind only our most sophisticated guests are trading up into this program. These are guests that have been loyal to the Archer Farms brand or possibly other premium brands within our portfolio, saying: “I love this ritual, I love what it does for me everyday. I’m going to treat myself and buy the most premium coffee I can.”

FC: When the COE auctions are taking place, is a Target rep usually on hand or does CBI make most of the decisions?
Thornton: For the first few auctions we had the Target buyer with us. Their approach was, “Do what you think is the right thing to do.” They would sit in the office, watch the screens with us, have fun with us. After they participated a few times, we generally felt it wasn’t always worth it for them to fly out here just to sit at a desk with me for six hours watching the ticker board.
Sylvester: The important thing is we talk about the strategy up front. We talk about the parameters. We don’t ever want to come across as, “Oh, we’re Target, we’re going to throw all our money at it and win the number-one coffee.” That absolutely is not our intention. There’s a thoughtful strategy behind it, and really I’m going to rely on Paul to execute that strategy.
Thornton: Target buys about two or three times more coffee now than when we started with them. A lot of that growth has been in the last four or five years. Cup of Excellence has really stimulated interest in their coffee side and really has put Target in the category of a destination if you’re looking to buy coffee.

Editor's note: This feature, which was first published online in July, garnered a number of responses, some critical of the fact that Target was selling super-premium coffees at a loss and seemingly undercutting independent cafes that were unable to afford such a measure. Paul Thornton responds in our November print edition.

Questions or comments? E-mail us at comments@freshcup.com
Purchase the July 2010 issue (not including this article)

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