Starbucks Rwanda Blue Bourbon

Starbucks' Rwanda Blue Bourbon provides lessons to all food processors on fair trade and a social mission … and the marketing opportunities inherent in those causes.

By Hollis Ashman and Jacqueline Beckley, Consumer Understanding Editors

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Coffee, the beverage that helps Americans get up and get going in the morning, was first grown in Ethiopia prior to 1000 A.D. and moved further east by Arab traders, who boiled the beans and created a drink called “qahwa” (prevents sleep). By 1668, coffee had replaced beer as New York City’s favorite breakfast drink and from that point on has been helping Americans start their day.

Today, many consumers start their day with other beverages: colas, teas, energy beverages, smoothies, flavored milk and flavored water, among other). So coffee has a lot of competition.

The poster child for creating a brand/product experience is Starbucks. Its ability to charge $3-4 and more for a coffee beverage while recreating the “coffee house” environment has been well studied. Starbucks has had strong growth compared to other coffee brands, yet still must find ways to continue profitability and to increase consumption among consumers.

A recent effort is Rwanda Blue Bourbon, a coffee that mixes typical Starbucks quality with rare beans plus a social conscience. More than just a fair trade product, Rwanda Blue Bourbon is an effort to save the country of Rwanda, which was devastated by internal violence in 1994. Farmers there nearly stopped growing coffee altogether, but U.S. and international organizations not only convinced Rwandan farmers to continue coffee growing but upgraded the crop into a higher quality Arabica Bourbon variety.

While this coffee is only available (at the moment) at Starbucks stores, it provides lessons to all food processors on fair trade and a social mission … and the marketing opportunities inherent in those causes.


Coffee has a very high household penetration, with 78 percent of consumers reporting they drink it.
Coffee has a very high household penetration, with 78 percent of consumers reporting they drink it.

Understanding the marketplace

In 2005, coffee sales were $2.7 billion, a decrease of 15 percent from 1998. Still, coffee has a very high household penetration, with 78 percent of consumers reporting they drink it (according to Mintel International data, June 2005). Coffee has a stronger appeal for older consumers, with those over 55 years old drinking coffee 87 percent of the time while consumers 18-24 years old drink much less and on fewer occasions. Per capita consumption of coffee has dropped, driven by these younger consumers.

Coffee is sold as ground, instant, whole bean and ready to drink. Sales of ground coffee were $1.88 billion in 2005, followed by instant coffee at $510 million, whole bean at $280 million and ready-to-drink at $66 million.

While the price of commodity coffee beans hit a low in 2002 at $3.20 per pound, the subcategories that are growing since 1998 (whole bean and ready-to-drink) are those that have a significant price premium over ground coffee. This has helped to make up for the loss in coffee volume sold.

Starbucks may be top of mind for many, but the leader in overall coffee dollar sales is Procter & Gamble’s Folgers, followed by Kraft’s Maxwell House and then Starbucks, with private label fourth. In the category of whole beans, traditional brands such as Folgers, Millstone and even Dunkin’ Donuts are seeing declining sales, while specialty coffees, including organic and fair trade coffees, are growing.

In this growth category of specialty coffees, one of the key issues for any company is to justify the higher price based on more than just quality. Starbucks has reframed the “coffee experience” to include social responsibility. Starbucks not only is providing a market opportunity for Rwanda farmers but is funding projects that support their community, the environment and coffee sustainability. This moves the expectation of fair trade coffee beyond just ensuring an equitable price for beans and decreasing child labor to that of improving life for an entire society. And it redefines Starbucks as a company that delivers more than just a great cup of coffee. Starbucks delivers a chance to help save the world … one cup at a time.

This places Starbucks in a position to which its large corporate competitors will have a difficult time responding. Yes, P&G and Kraft do social good works, but these tend to be one-time events, certainly not programs aimed at improving a nation’s key industry. Smaller competitors such as Green Mountain and Peet’s are left with only local or domestically focused social projects.


Our Crave It and Drink It! Insights look at 30-35 conjoint studies to generate a database to understand the experience of foods. We find craveable coffee is about being fresh ground and brewed, usually 100 percent Columbian coffee. Drinkable coffee is about the aroma, warm and inviting. The aroma more than the taste is how consumers sense freshness and quality. The key attributes of coffee are taste, aroma, beverage temperature and mood.

Coffee is consumed most often (in order of hierarchy) first thing in the morning, at breakfast, midafternoon and finally midmorning. Consumers want different types of coffee at different day parts. They want just coffee first thing in the morning, but at the key snack occasions (mid-morning and mid-afternoon) they start looking for coffee as a treat. By evening, consumers are back to wanting just coffee.

The key trends are freshness, convenience and indulgence.

Freshness: Consumers link aroma, freshness and premium quality. Manufacturers have responded by changing packaging: Folgers produced the AromaSeal canister, a plastic container with a snap-tight lid that seals out air to keep the coffee fresh.

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