Friends of package coffees point to the saving in time in handling in the store; to the fact that the contents of a package are not contaminated by odors or dirt; that the blends are prepared by experts and are always uniform; that the coffee is always properly roasted; and, in the case of package ground coffee, properly ground; that the brand names are widely and consistently advertised; and that the retailer has the benefit of the packer's co-operation in building up sales campaigns, by means of booklets and local advertising.

Various Types of Coffee Containers

Five types of containers are used for packing coffee, namely, cardboard cartons, paper bags, fiber or paper cans, tin cans, and composite (tin and fiber) cans and packages. Fiber packages include paraffin-lined as well as those that have been chemically treated with other water-proof and flavor-retaining substances.

The carton is popular, because it takes up less room in storage and in shipment to the packing plant, and also because the label can be printed directly on the package. Another economy feature is its adaptability to the automatic packaging machine, which transforms it from a flat sheet into a wrapped and sealed package of coffee. Moisture-proof and flavor-retaining inner liners and outside wrappers are generally used to prevent rapid deterioration of the coffee's strength and aroma.

Paper bags are the least expensive containers to be obtained; and when lined with foil or prepared paper, they are considered to be satisfactory. Like the carton, the label can be printed directly on the bag. They also lend themselves to close packing in shipping cases.

Another popular type of container is the paper, or fiber, can which is made of fiber board with a slip cover. Fiber cans are also made with tin tops and bottoms, the metal parts supplying a measure of rigidity to the package. These composite packages are made round, square, oblong, or cylindrical.

Paraffined containers are characterized by an outer covering of glossy paraffin, and are made in various shapes. In some makes, the paraffin is forced into the pores of the paper base, making for added flavor-retaining and moisture-proof properties. In this type of package the label may also be printed direct on the package.

In recent years, vacuum packed coffee has won great favor, first in the West and latterly in the East. Tin cans are used. Vacuum sealing machines close the containers at the rate of forty to fifty a minute. Private tests by responsible coffee men are said to have shown that coffee in the bean or ground, when vacuum packed, retains its freshness for a longer period than when packed by any other method.

Labels

Coffee packers must give due attention to certain well defined laws bearing on package labels. Before the Federal Pure Food Act went into effect on January 1, 1907, many coffee labels bore the magic names of "Mocha" and "Java," when in fact neither of those two celebrated coffees were used in the blend. Even mixtures containing a large percentage of chicory, or other addition, were labeled "Pure Mocha and Java Coffee." The enactment of the pure food law ended this practise, making it compulsory that the label should state either the actual coffees used in the blend, or a brand name, together with the name of either the packer or the distributer. When chicory or other addition is used, the fact must be stated in clear type directly following the brand name. The reading matter on the label should contain facts only, and should not bear extravagant claims of superior quality or of methods of preparing or packing that have not been followed.

Coffee Packaging Economies

During the United States' participation in the World War, tin became practically unobtainable, and coffee packers turned to paper and fiber containers as substitutes in packaging nearly all grades. In this war period, commercial economy became a fetish in the business world; and coffee packers worked to save not only material, but shipping space, labor, and time. Paper and fiber containers proved to be not only practical but economical packages. Because of their war-time experience, many packers changed permanently to square and oblong containers. They found these containers could be packed "solid" in shipping cases, leaving no unfilled space between packages as is the case with cylindrical cans; also, smaller shipping cases could be used. As a further measure of economy, several packers changed from the square "knocked-down" paper or fiber carton to the oblong carton that is made up, filled, and sealed by automatic machinery from a flat, printed sheet of cardboard. This type of container is generally lined or wrapped with a moisture-proof and flavor-retaining paper.

There has been a tendency in recent years to standardize coffee packages as a means of working out packaging and shipping economies. One of the leading American proponents[336] of standardization said:

As an example of how coffee packages can be standardized this authority cites the following sizes of flat-sheet containers and their respective dimensions and capacities:

The advantages claimed for these packages are that each is well proportioned and makes a good selling appearance; each bears a direct relation to the other two; and all may be handled with uniformly good results on the same set of standardized packaging machinery. One size of shipping case, instead of three, may be used to hold exactly the same number of pounds of coffee, regardless of whether shipped in one-pound, half-pound, or quarter-pound cartons. For smaller dealer assortments, any two, or all three sizes also exactly fit the following standard shipping cases:

For 36 lbs., 137⁄8" by 161⁄2" by 123⁄4" high
For 54 lbs., 137⁄8" by 161⁄2" by 191⁄8" high

This standardization of packages and shipping containers results in a lower cost of containers and a smaller stock to carry, with attendant reductions in details in purchasing and billing departments, in inventories, and in many other overhead expense factors.

Practical Grocer Helps

Wholesale coffee merchandising does not properly end with the delivery of a shipment of coffee to a retailer. The progressive wholesaler knows that it is to his best interest to help that grocer sell his coffee as quickly as possible; to make a good profit on a quick turn-over; and to dispose of it before the coffee has deteriorated.

Practical co-operation between wholesaler and retailer is one of the most important factors in coffee merchandising. In these days of keen and unremitting competition, neither agency can stand alone for long. The progressive wholesaler does not sell a retailer a poorer quality of coffee for any particular grade than his trade calls for, and he does not load him up with more than can be disposed of while still fresh. He gauges the capacity and facilities of each retail customer, and then gives him practical help to keep the stock moving.

The packer of branded coffees helps by advertising to the consumer in magazines and newspapers, always featuring the name of his brands; and he supplies the grocer with educational pamphlets and booklets on the growing, preparation, and merits of coffee in general, with an added fillip about the desirability of his particular brand. Through his salesmen the packer shows the grocer how to display the coffee on the counter and in the window, and often supplies him with placards and cut-outs featuring his brand. He co-operates in staging special coffee demonstrations in the store; instructs the retailer in the importance of teaching his clerks how to talk and to sell coffee intelligently; and how to prepare advertising copy for his local newspaper, so as to get the fullest measure of profit from the wholesaler's national or sectional advertising.

Coffee Sampling

The sampling method of creating a demand for merchandise has been tried in the wholesale coffee trade, only to be abandoned by the majority of packers. With other and more satisfactory ways of creating consumer interest, promiscuous sampling was found to be too expensive, in view of the comparatively small returns. One indictment against sampling is that it does not make any more impression on the average person than does an advertisement that appears only once, and is then abandoned. Wideawake merchants have learned that the public's memory is exceedingly short; and that they must keep "hammering" with advertisements to establish and to maintain a demand for their products.

It would seem that the logical place for sampling is in the retailer's store, especially in connection with demonstrations. Many progressive grocers stimulate interest in their coffees by serving, on special demonstration days, small cups of freshly brewed coffee, giving the customer a small sample of the brand or blend used, to be taken home to see if the same pleasing results can be obtained there also. Generally this form of sampling, when properly conducted, has shown a larger percentage of returns than any other method.

Premium Method of Sales Promotion

For many years, the premium method of sales promotion has been an important factor in wholesale coffee merchandising, as well as in retail distribution. The premium system has been characterized as a form of advertising; and many coffee packers and wholesalers prefer to spend their advertising appropriations in that way rather than in transitory printed advertisements in newspapers and general magazines.

While certain forms of the system have been legislated out of existence in some states, friends of the plan claim that it is a true profit-sharing method which "blesses both him that gives and him that takes"; and that it is an advanced and legitimate means of promoting business, when properly conducted. They assert that it is a system of sales promotion whereby the advertising expense, plus a large percentage of the profits of the business stimulated thereby, is automatically returned to the dealer buyer, without increasing cost or lowering the quality of the product so advertised; that it eliminates advertising waste by producing a given volume of sales for a given expenditure of money; that it reduces the cost of advertising by prompting a continuous series of purchases at one advertising expense; that it promotes cash payments and discourages credit business. Premium users claim that the force of a printed advertisement is often spent in stimulating the first purchase; while to secure a premium, the purchaser must continue to buy the commodity carrying the premium, or trade with the giver of the premium until merchandise of a stipulated value or quantity has been purchased.

In general practise, the premium-giving coffee packer or wholesaler may either offer the retailer an inducement in the form of a desirable store fixture, household article, or item for his personal use; or he may offer it to the consumer through the retailer.

The methods of giving the premium are numerous. To the retailer he may give the article outright with each purchase of a stipulated quantity of his coffee; or he may offer it as a prize to the retail distributer selling the most coffee in a certain period in a specified territory. Frequently the premium is of such value that the wholesaler can not give it with any quantity of coffee a distributer can dispose of in a short time; so he issues coupons or certificates with each purchase, permitting the retailer to redeem the premium when he has saved the required number. Or, the retailer may get the premium with the first purchase by paying the difference in cash.

In giving premiums to consumers, the wholesaler follows the same general plan used with retailers, except that in most cases the coupons are packed with the coffee and are redeemable at the retailer's store. Sometimes, however, the consumer sends the coupons or certificates to the wholesaler, getting the premium direct from him. In another phase of the premium system, the retailer works independently of the wholesaler, buying and giving away his own premiums to promote or to hold trade for his store. This phase is explained in the chapter on retail coffee merchandising.

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Chapter XXVII

RETAIL MERCHANDISING OF ROASTED COFFEE

Coffee is sold at retail in the United States through seven distinct channels of trade; the independent retail grocers (about 350,000) handling about forty percent of the 1,300,000,000 pounds sold annually; and the other sixty percent being sold by chain stores, mail-order houses, house-to-house wagon-route distributers, specialty tea and coffee stores, department stores, and drug stores. Since the beginning of the twentieth century, the independent grocers' monopoly in retail coffee-merchandising has been dwindling at a rate that has seriously alarmed those interests and their friends.

B.C. Casanas of New Orleans, addressing a convention of the National Association of Retail Grocers in the United States, in 1916, said that the wholesale coffee roasters of the country had invested in their business $60,000,000; and that $135,000,000 worth of roasted coffee was sold by them every year.

Considering the methods of merchandising, the seven retail distributing agencies may be grouped into three distinct classes. The first class would comprise the independent grocer, the chain store, the department store, the drug store, and the specialty store, all of which maintain stores where the consumer comes to buy. The second class takes in the mail-order house, which solicits orders and delivers its coffee by mail, and sometimes by freight or express. The third class covers the wagon-route dealer, who goes from house to house seeking trade, and delivers his coffee on order at regular periods direct to the consumer in the home. As an inducement to contracting for large quantities to be delivered in weekly or bi-weekly periods, the house-to-house dealer generally gives some household article, or the like, as a premium to establish good-will and to retain the trade of his customers.

New impetus was given to the method of selling coffee by mail when the parcel post system was adopted by the federal government in 1912; and since then this plan has become an important factor in retail coffee-merchandising. Generally, the mail-order houses confine their sales efforts to agricultural districts and small towns, soliciting trade by catalogs, by circular letters, and by advertisements in local newspapers, and in magazines which circulate chiefly among dwellers in rural districts.

The majority of wagon-route distributers depend upon the lure of their premiums, and on personal calls, to develop and to hold their coffee trade. The leading wagon-route companies, sometimes called "premium houses", maintain offices and plants in large cities adjacent to the territories to which they confine their sales efforts. At strategic points, they have district agents who engage the wagon men that do the actual soliciting of orders and that deliver the coffee. All wagon-route companies handle other products besides coffee, specializing in tea, spices, extracts, and such household goods as soap, perfumes, and other toilet requisites that promise a quick sale and frequent re-orders. Some of their competitors complain that they handle only the more profitable lines, leaving the independent local grocer to supply the housekeeper with the items on which the margin of profit is comparatively small.

Wagon-route coffee-retailing began to make itself felt seriously about the year 1900. At first, the premiums usually consisted of a cup and saucer with the first order, the customer being led to continue buying until at least a full set of dishes had been acquired. Later, the range of premiums was expanded; until today the wagon man offers several hundred different articles that can be used in the home or for personal wear or adornment. Practically all the leading wagon-route concerns favor the advance premium method; that is, a special canvasser induces a consumer to contract for a large quantity of coffee and other products in return for receiving the premium at once, though the coffee is delivered only as the customer wants it, generally two pounds every two weeks. The wagon man delivers the coffee, and is usually held responsible for the customer fulfilling the agreement, and is expected to secure repeat orders with other premiums.

The importance of the wagon-route plan of coffee-retailing is shown by the fact that in 1921 there were six hundred houses of this kind in the United States; and it was estimated that they distributed eight percent of the total amount of the coffee consumed in the country. The biggest company was capitalized at $16,000,000, and operated eleven hundred wagons. Most of the wagon-route concerns were operating in the central states, practically one-third of them covering the states of Illinois, Wisconsin, Indiana, and Iowa. Pennsylvania is also a wagon-route-dealer center.