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here are at least 10,295 Starbucks

stores in the United States,

according to the company’s most

recent “fact sheet.” Named for the first

mate in Herman Melville’s book “Moby

Dick,” Starbucks has become a whale of

a company, just one piece of evidence

that we have become a coffee nation.

For further proof, consider the fact thatcoffee has percolated into places you wouldn’texpect—high school libraries, for instance. TheAssociated Press reported in October 2007,“Coffeehouses are springing up in high schoollibraries around the country, marking a bigdeparture from the days when librarians sternlyprohibited food, drinks and talking.”

If school libraries are selling coffee, is it farfetched to think that outdoor specialty retailerscould do it? Over the past couple of years, afew outdoor shops have decided to give it a try.

“About a year ago we brought it in,” saidKirk Robinson, manager of Lewis and ClarkOutfitters in Springdale, Ark. The store sellsbags of Silver Joe’s coffee and also offerssamples for customers to drinkwhile they shop or relax in asmall lounge area. “It’s a goodfit, and our customers love it.”

The idea of offering shopperscoffee, cider and other hotdrinks is not a completely newone for outdoor retailers; many

stores have done this during

the holiday season. But selling bags of specialtycoffee is a fairly fresh concept. One reason we’reseeing it happen is a few specialty coffee compa-nies—ones that use high-quality beans andcreate unique roasts—are targeting the outdoorspecialty market. And one of these companiescreated some buzz at last year’s OutdoorRetailer trade shows.

A CUP OF JOEDuring Outdoor Retailer Winter Market in 2007,heavy traffic flowed past the Silver Joe’s booth,despite the fact that it was located in the “back40” of the Salt Palace Convention Center. That

show effectively marked the birth of the SilverJoe’s coffee brand, but the company wasalready turning heads. Its marketing

vehicle—a silver Airstream trailer—occu-pied the booth and proved to be a stylish andeye-catching feature. Show attendees crowdedaround, some seeking coffee samples for anafternoon pick-me-up, while others hung aroundjust surprised to see such a robust display forcoffee—a fringe product for outdoor retail.

Though coffee may be fringe, Cameron Clementof Silver Joe’s said he believes that it will eventu-ally become a more important part of the product

mix. “Coffee is ingrained in our culture,”said Clement. And he means not only

the American culture, but theoutdoor lifestyle as well.Backpackers, climbers, paddlers—

all sorts of outdoor enthusi-asts—consider an

eye-opening cup ofcoffee an importantpart of any adven-

c o f f e e m a r k e t

B Y M A R C U S W O O L F

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RETAIL THE

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ture. In fact, the brand was created by a groupof friends who frequently went fly-fishing inthe Rocky Mountains and before each outingasked the same question: Where are we goingto get some good coffee for the trip?

After an especially cold and wet day inthe river, Clement was sitting, sufferingfrom hypothermia, when inspirationstruck. “Why don’t we make our owncoffee brand?”Clement thought to himself.At that moment, he noticed an Airstreamtrailer in a nearby parking lot, and itsparked another idea. “All brands ownthings. Folgers owns red, Maxwell Houseowns blue,” said Clement, who has helpeddevelop food products for Procter &Gamble. He thought about the trailer andthe fact that coffee vinyl bags are silverbefore they’re colored—silver could be thesignature color for a new brand of coffee.

As he and his friends moved forward indeveloping Silver Joe’s, they also realizedthat Airstream trailers would provide aunique way to market the brand in amobile fashion. They eventuallyapproached Airstream and struck up amarketing partnership.

Though the company was up andrunning, the Silver Joe’s team knew thatthey faced a challenge in getting outdoorretailers to effectively sell coffee. But theyfocused on the notion that specialty coffeecould succeed if it was presented in thesame way retailers would sell any high-end product. Meaning, retailers couldn’tsimply toss coffee bags into bins and hopethe stuff would move. No, they would haveto highlight the product and give it thesame attention and support they wouldprovide any other new product concept.

To assist retailers, Silver Joe’s created aturnkey operation, where it supplies shopswith attractive fixtures that hold product,plus displays (such as murals) that drawattention, and appliances to create a coffee-service station. Retailers also receive freecoffee to brew and make available tocustomers. Silver Joe’s also has lines ofaccessories and apparel, so the total effectis a sort of coffee concept shop.

“Retailers are asking for systems thatenhance the shopping experience,” saidClement. The Silver Joe’s setup givesgreater weight to the product, and the freecoffee samples might encourage a personto shop longer and spend more money.

Robinson of Lewis and Clark said thatSilver Joe’s also works hard to keep the coffeearea properly stocked. “It was a benefit to usto have someone help manage our coffeeinventory,” said Robinson. “It’s great whenyou have a vendor that’s so in tune with yourstore. We’re really partnering in this.”

Because coffee companies are trying to

establish themselves in the market, theyare keenly aware that they must provideretailers good service and suggest inno-vative ways to boost sales. Kinetic Koffee,a specialty coffee company based inArcata, Calif., offers its outdoor retailersa special-label service in which stores cancreate their own coffee label to be placedon bags of Kinetic Koffee.

Andrew Schlegal, manager and co-founderof Great Miami Outfitters in Miamisburg,Ohio, said the label program has workedwell. “We started putting our logo on coffee,and we’ve flown through that,” he said. AndMark Ritz, co-owner of Kinetic Koffee, saidthe label service is now the greatest contrib-utor to the company’s sales growth.

Robinson admits that some customersstill think it’s odd to find coffee for sale ina gear shop. “A lot of people do come inand say, ‘Why do you carry coffee? This isan outdoor store.’ But it’s really funnybecause they’ve come back, and this iswhere they get their coffee now,” he said.

Robinson draws attention to the coffeeby merchandising it with food productsand coffee accessories. Ritz recommendsthat retailers also use the countertopdisplays he provides, and place them nextto the cash register, because coffee isusually an impulse sale. “Most people don’tgo into an outdoor store with the expressidea of looking for coffee, so we have toopen their eyes to that possibility,” he said.

Right now, the challenge for Ritz is toconvince more outdoor retailers to opentheir eyes to the possibility of selling coffee.Though outdoor travelers are obviously afairly caffeinated bunch, some outdoorstores are reluctant to provide their fix.

ON THE BACK BURNERThe Summit Hut in Tucson, Ariz., has tradi-tionally been one of the more successfuloutdoor specialty stores in the country, andits buyers have not brought in coffee. “It’sa back-burner thought for us,” said SharonScott, a buyer for The Summit Hut.“Kinetic Koffee has sent us samples, andthey have great packaging and a neat story,and I love the Silver Joe’s concept that yougive away the coffee, but we haven’t chosento go down that path yet.”

Scott said that there are issues with floorspace, and she’s reluctant to set up a coffeeservice station because she’s not sure thatsuch a thing would increase the amount oftime a customer shops. Plus, it could be amessy hassle. “We’re merchants and notrestaurateurs, and we would have to makesure we could execute it with the rightsanitation,” said Scott. “It’s in the back ofour minds, but we’re not sure that it’s theright concept for us now.”

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c o f f e e m a r k e t

Though The Summit Hut is not sellingcoffee beans, nor brewing it for customers,the store is selling Java Juice, a liquid coffeeextract that is added to warm water toprovide an instant cup of gourmet java. Theextract is available in soft packets that don’ttear or burst easily, so backpackers can carrythem without fear of having a nasty blowout.“Java Juice does really nice for us,” saidScott. “The packaging is compelling anddurable. People use it for backpacking, andit’s a nice thing for travel, or to keep in yourdesk drawer.”

The Summit Hut also sells a wide arrayof coffee accessories such as mugs andFrench presses, and Scott said sales ofthese items have increased in the lastcouple of years. “You can get a coffee travelmug anywhere and everywhere, but theystill sell well for us,” she said. Coffee acces-sories are hot stuff right now—have younoticed the gazillion coffee mugs displayedat the Outdoor Retailer shows? Still, thetrend is not enough to convince someretailers to sell actual coffee.

One objection is that margins on coffeesales can be low. “Margins are one of thedownsides,” said Ritz. “Because it’s sold ingrocery stores, most coffee is sold at a 30-to 35-point margin. Our coffee retails for$10.99 for a 12-ounce bag.” That may soundexpensive, but he said it’s comparable to anorganic micro-roast coffee from Peet’s Coffee& Tea or a macro-roaster like Starbucks.Ritz added that he pays 10 cents to 25 centsa pound more for his coffee beans thancompanies that sell conventional coffeebecause his product is certified organic.

But the organic nature of Kinetic Koffeeis important to Robinson at Great MiamiOutfitters. He doesn’t mind making thelow margins because Kinetic allows himto sell something that is unique and alsoenvironmentally friendly.

Still Ritz gets plenty of resistance fromoutdoor retailers, and he’s a little surprised.“It seems like a no-brainer,” he said. And it’snot like he’s a newcomer to the outdoorindustry with crazy expectations. Beforelaunching Kinetic, Ritz worked in sales forYakima, and for years he worked for retailersand manufacturers in the cycling industry.One thing Ritz finds interesting is that bicycle

» Kinetic Koffee offers POP displays for retailer countertops.

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ingrained in the culture of cycling startingin Europe,” he said. Also, coffee has beenpopular amongst cyclists due to its toutedperformance benefits. Whatever the reason,“Most shop workers and owners are coffeefanatics,” said Lawrence, so you don’t haveto twist their handlebars to convince them tosell some fine brew.

Still, the idea of selling coffee is relativelynew for bike shops, so it’s hard to predicthow successful it will be. Lawrence saidcoffee’s future might resemble whathappened with nutrition products in bikeshops. “I worked with Hammer Nutrition,and I was trying to get product into storesthat would maybe have a few Clif bars,”said Lawrence. “A lot of shops weren’t reallyreceptive at first, but I would go into thosesame shops a year later and see a full 10-by-10 area on a wall with nutrition prod-ucts.” He did say that coffee might not gainsuch prominence at specialty retail becauseit’s readily available in grocery stores, whilemany nutrition products are not. But morepeople in the United States are seekingcoffees that are higher in quality than whatyou typically find on grocery store shelves.

The percentage of the U.S. populationthat drinks specialty coffee on a regular

shops—close cousins to outdoor stores—aremore readily lining up to sell coffee.

PEDDLING COFFEE“It’s very interesting that bike shops—whichdon’t sell lots of coffee accessories—havevery much embraced the idea of havingcoffee in the store, whereas outdoor shopsthat sell French presses, hand grinders andcoffee mugs tell me that they just don’t seecoffee as being their market,” said Ritz.

Kinetic Koffee is sold at 145 places,including specialty stores, small grocerystores, restaurants and hotels. Of thestores, 70 percent to 80 percent are bicycleshops and 10 percent or less are outdoorretail stores.

So why would bike shops be much morealigned with the coffee trend? Perhaps it’sbecause cycling, more so than other activ-ities, has long been closely associated withcoffee. “Go on any bike ride, and ninetimes out of 10, it will start, finish or stopat a coffee shop,” said Ritz.

“There’s a direct connection betweencyclists and coffee,” said Evan Lawrence, co-founder of 53 X 11, a specialty coffee brandthat targets bicycle shops. “Coffee has been

c o f f e e m a r k e t

basis rose from 12 percent in 2003 to 16percent in 2006, according to the SpecialtyCoffee Association of America. During thatperiod, casual consumption of specialtycoffee rose nearly 10 percent. From 2001to 2006, total retail sales of specialty coffee(including cafes, kiosks, carts and retailers)rose from $8.3 billion to $12.27 billion.

“More consumers are starting to realizewhat good coffee is supposed to taste like,”said Lawrence. And that includes thepeople who walk into outdoor stores.

“Coffee will become a larger part of theoutdoor market,” said Clement of SilverJoe’s. “The question is, who will own thatprize?”

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» Silver Joe’s serving system in Lewis and Clark Outfitters.

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