Are Private Coffee Labels Worth It?

The idea that roasters also manufacture and package their own coffee products is so pervasive that it’s practically a given. Having said that, this isn’t always the case. They will occasionally form a business relationship with a roaster who also operates as a private labeller. This individual will be responsible for supplying, processing, and branding coffee items on their behalf while working behind the scenes.

You may or may not be able to provide this service depending on the size and capabilities of your roastery. The following is an explanation of what this entails and how you may participate in it.

What Is Private Label Coffee?

One firm manufactures and distributes private label coffee goods, which are then packaged and sold under the brand name of another business. When working with speciality coffee, the customer may offer their own beans for them to package and sell on their own. They also have the option of requesting that the provider roast it for them, which is referred to as toll-roasting.

Clients may take use of this service, which is provided by Phil Smith, who serves as the Head of Category & Insight at UCC Coffee UK & Ireland. According to him, “We go through a process that is both in-depth and thoughtful in order to develop a coffee that works for [our customers].” This entails taking into consideration everything from roast characteristics, bean selection, certifications, importing and keeping the green beans, marketing, [and] how the coffee will be supplied to the customer.

Joe’s Garage Coffee is a company that provides a service for packing coffee, and Greg Gould is the President of the company. He elaborates by saying, “It’s increasingly frequent for customers to request that we source and roast beans.” Co-packing roasted coffee accounts for around 15% of our whole company, while roasting our beans makes up the remaining 85%. There are certain roasters who would never consent to the outsourcing of the roasting process, but for the vast majority of roasters, it is just more cost-effective and time-efficient not to send coffee back and forth.

As more time has gone, experts in the coffee industry have begun to acknowledge that private labelling may give the same artistry and attention to detail that is characteristic of speciality coffee. “… It is quite evident to me that customers [are] turning away from food that is produced by corporations, and [that] the demand for locally produced, artisanal food [is] skyrocketing. Greg says that there is “a fundamental change in the way we desire to consume,” and coffee is not an exception to this transition.

Is There a Market For Private Label Coffee?

Nielsen, a company that collects data, provides information, and conducts measurements, found that private label goods continued to increase their market share in over 60 countries in 2017. This comprises a large number of companies that specialise in coffee. Greg tells me that “Since 2012, we’ve witnessed a ten times rise in the number of coffee roasters seeking partners to assist launch items to retail, broaden product offerings, or boost capacity without big capital commitments.” This is something that has happened.

Roasters who choose to pursue this option have the advantage of being able to expand their businesses and provide new options to their clientele without the typical time and financial investments that would be necessary if they did it themselves. Customers also benefit from the increased variety of options available to them.

How Roasters Can Become Private Labellers

To increase their chances of becoming successful, roasters that are interested in providing a private label service should work toward meeting specific conditions. The first factor is whether or not the company has the machinery and storage space necessary to generate the requisite quantities.

One other need is the capacity to provide consumers with product samples at all stages of the manufacturing process. According to what Greg has told me, this gives the customer a sense of security and helps to build trust. “We put our customers through a very hands-on tasting experience, during which we continue to make adjustments depending on the input they provide until they are satisfied enough to put their name on the product.” During this stage of the process, we will hone down on the precise parameters that distinguish [their] product from others on the market.

It is crucial to assist customers in standing out in the market by providing a diverse product offering, which not only helps to attract more clients but also a larger consumer pool overall. This may include providing specialised pods and capsules in addition to roasted and ground beans as options for purchase. Phil tells me, “In 2013, we invested heavily in coffee pods and identified them as a significant sector in retail – and one which will continue to grow for many years to come.” “In 2013, we identified coffee pods as a significant sector in retail and identified them as a significant sector in retail,” he says.

Greg’s last point is that he thinks being honest with customers about the services you provide will help you gain their loyalty and win their business. “When you say you’re going to do something, really do it at the time you say you’re going to do it. ” Your customers depend on the quality of your service more than you probably realise, and if you are able to satisfy their requirements and win their confidence, you will have a very fruitful business partnership.

Advantages of Offering a Private Labelling Coffee Service

The most significant benefit of providing this service is that it enables you to maximise your earnings while without needing a significant extra financial commitment since you can develop more items using the same staff, infrastructure, and equipment that you already have. Because you might also set a minimum order quantity, you could be in a position to guarantee a certain level of sales volume at predetermined intervals.

It may take a significant amount of time to establish and perfect a product’s branding as well as its marketing. However, because your client will most likely decide on their product’s marketing and branding, this process is likely to be quicker, easier, and more affordable than if you had to do it from scratch. This will shorten the amount of time between the conception of the product and the beginning of sales.

Because collaborating with you provides advantages, your customers may choose to collaborate with you on projects of a similar kind. Greg argues that the benefits are “endless” for customers and include things like product diversification, new market penetration, capacity upgrades, quality enhancements, business continuity, supply chain simplification, and distribution flexibility.

Disadvantages of Offering a Private Labelling Coffee Service

Before deciding to provide a service, it is important to consider the drawbacks in addition to the benefits, which are discussed above, since the advantages are substantial in and of themselves.

If you are a private labeller, you will have a comprehensive understanding of what components of developing and marketing a coffee product are successful and which ones are not. Despite this, the customer will eventually have the last say over the production of their product. They may make a choice that is detrimental to the commercial success of their product, and you would be unable to challenge this decision.

It is also possible for this to be a costly endeavour, particularly if your company lacks the space and gear required to carry it out. If you do not have one of these things, you will be forced to make purchases, which will not only be expensive but also time consuming. In addition to this, you will need to employ and keep a larger workforce in order to guarantee that the items of each customer are delivered, branded, and wrapped in the suitable manner.

Your risk will rise in proportion to the success and expansion of your customers’ businesses, both of which are directly attributable to the provision of your services. It is possible that a customer, as their business expands, may determine that it is more economically viable for them to take over the manufacture of the items that you now provide to them.

The provision of a successful private label service begins with the provider being forthright about the nature of the service they offer and approaching the relationship on an equal footing with the customer. This is despite the fact that one cannot ignore the practical considerations that must be taken into account. Greg says, “Remember that your clients are your partners, not simply your customers – relationships need a lot of effort and constant upkeep,” and he elaborates by saying, “Remember that your clients are also your consumers.”

Both parties in a relationship should put forth effort to make it satisfying for the sake of their long-term success together. Phil comes to the conclusion that “in order to succeed, there should always be a long-term partnership approach,” along with ongoing assistance to assist in driving outcomes and getting the most out of “your” coffee.

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