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Theta Ridge Coffee

Swiss Water’s
Constant Evolution

STAFF REPORT

It’s barely been two years since the Swiss Water trademark finally got a home of its own under a fully independent company. Since that time its management has been dedicated to the enhancement of the patented and chemical free Swiss Water decaffeination process and of its corresponding trademark.

The new company, Swiss Water Decaffeinated Coffee Company, Inc., based in Burnaby, B.C. just outside of Vancouver, B.C., has accomplished much in the past 18 months. Symbolic of the massive changes has been the recent redesign of the Swiss Water logo itself and a top to bottom redevelopment of their point-of-purchase materials, web site, and licensed vendor and trademark enforcement program. In addition, a new product offering, the warmly received Swiss Water Premium Espresso Blend, was launched last year and other new products are envisioned for the second or third quarter of this year. What’s more, in the first of a planned series of intensive consumer advertising efforts, the company has embarked on an intensely focused print advertising campaign in the Pacific Northwest directing particular decaf drinkers to specialty coffee retailers who carry Swiss Water decaffeinated coffees.

If those were all the changes underway at Swiss Water they would represent a substantial undertaking. But the process itself is being both enlarged and refined as well. Enlarged because sales were up substantially in 2001 and orders for 2002 will reflect another, similar double digit increase. The refinements are starting with the drying of the beans after decaffeination, a bottleneck for most decaffeinators, but this initiative represents only the first step of a top to bottom review of the patented Swiss Water process. Recently hired to help Swiss Water’s plant manager, Jeff MacVicar, with process refinement, is Kurt Dyck, one of the engineers responsible for design of the original plant during the late 1980’s. MacVicar is enthusiastic about having his old colleague back, “It’s been great to have Kurt back with us - and to be able to give him the opportunity to review his work and look for ways to improve on it.” Dyck, for his part, is happy to be back as well, “Engineers don’t often have a chance to come back to their work almost 15 years later to review and improve their work. I feel very fortunate to be working with a team so committed to producing a quality product.”

Not all the work at Swiss Water has had to do with either its look and feel, or the nuts and bolts of the processing facility, however. A major effort was made last year to understand who the specialty decaf drinker is and how best to speak to that consumer. “We’re very proud of what we’ve accomplished over the past several months but one of the aspects of which we’re most proud is the exhaustive research we’ve conducted,” said Frank Dennis, Swiss Water’s c.e.o. “We’ve gotten to know the specialty decaf coffee drinker a lot better and by sharing this information with our customers, we’re able to increase the profitability of this sector. The problem is, though, it isn’t cheap. The decaffeination business is expensive, not just in terms of processing but in almost every aspect of its operation in order for it to be profitable. When I originally took on this assignment with Jeff Belford, our c.f.o. and Jeff MacVicar, our plant manager, we basically had a brand and a patent. Since then, with the help of our other long time team members including Kathy Berardo, Diana Chan, Charlie Lewis and a very dedicated plant crew, we’ve been able to accomplish a great deal. But we couldn’t have done it without the very deep pockets of our capital partners, as well.”

This investment of resources has been based on a guarded optimism regarding the specialty coffee market and the role of decaffeinated coffee in it but also on an even more enthusiastic view of the Swiss Water brand’s chances within it. Frank Dennis draws a distinction between the vitality of the market and the potential demand for the Swiss Water brand, “We believe that we have a strong combination of benefits to offer the consumer and that if a coffee drinker is looking for a great cup of coffee without caffeine they are very likely to prefer a cup decaf decaffeinated with the Swiss Water process. What we can’t predict, however, is where the specialty coffee trend is going and where, more specifically, the demand for decaffeinated coffee will be five years from now, particularly if decaffeinators as a group don’t get together and do more for their category. In general, there are an increasing number of beverage choices available to the consumer and you really can’t be sure if the coffee consumer today will be drinking coffee tomorrow. We certainly hope they will be, we participate in the activities of the Specialty Coffee Association of America to help ensure they will, but the fight for a share of the consumer’s beverage drinking is only going to get tougher in the years ahead.”

“We know which consumers are most receptive to the combination of benefits that Swiss Water offers to the consumer and we try very hard to speak as directly as possible to these folks as we can.” Dennis observed, “We also believe,” He continued, “that this is the same group that can most dramatically effect the volume and profitability of a specialty coffee retailer’s decaf sales.”

The emphasis at Swiss Water is on a team approach but not an amorphous team; rather a specific group of people that care about each other’s success and the health of the company. Many have been with Swiss Water since the processing facility first opened, over 13 years ago. Kathy Berardo, Jeff MacVicar and Diana Chan have been working with for the Swiss Water cause though several iterations of ownership and are still with the newly independent company. Each team member sees their role differently, as well as seeing the company as a whole in a different light as well.

Jeff Belford, c.f.o. of Swiss Water Decaffeinated Coffee Company, Inc. related that his job has been even more complicated than one might assume. “People assume, correctly, that being in the coffee business requires that we have a very active risk management program when it comes to coffee futures, and we do. But what many people don’t realize is that the decaffeination process is also energy intensive and that makes it necessary to continually assess and account for our exposure in that regard.” Belford’s challenges have been especially numerous lately due to the planned plant upgrade and expansion, in addition to overseeing an active risk management in three areas he mentioned.

Diana Chan has been working with David Twentyman of Twentyman Coffee & Tea, Inc. in order to refine her skills in both cupping and buying as she will be primarily responsible for these functions beginning in June of this year, when Twentyman’s tenure will end. “It has been an honor to work with David. He helped establish the original standards for Swiss Water when the plant first opened and agreed to return on a temporary basis when we became an independent entity almost two years ago. In that time he’s been able to share a lot of his experience with me and also assisted me in upgrading our selection of in-house decaffeinated coffees. I will certainly miss working with him but I also believe I’m well prepared to work within our cost structures while at the same time maximizing the quality of our ‘off-the-rack’ decaf lineup.”

Jennifer Brash, new to the Swiss Water team in 2001, has been serving as director of trade marketing for almost a year. She has been chiefly responsible for the development of an entirely new line of point-of-purchase materials which are being well received by retailers in the Pacific Northwest, the area of the materials’ first introduction. “We needed a fresh approach to our merchandising materials to accompany our new logo, obviously, but also to work along side our consumer advertising campaign which is currently running in the Seattle and Portland markets. The next step has been to make sure that our trade partners were totally up to speed with what we’ve been doing. It’s not enough to tell them, ‘Hey, here’s our new airpot sticker,’ we share the whole story with them so that they understand who our target customer is and how best to approach them. It’s a much more disciplined approach, but one that focuses the impact of our limited budget as much as possible.”

Extolling the virtues of a company is easy, indeed, required on the part of team members. Customers and prospective customers, however, are a different matter. They feel no particular pressure to enthuse for too long if the facts, or their own experience, won’t back them up.

Martin Diedrich, chief coffee officer of Diedrich Coffee Company, Gloria Jean’s Coffee and the Coffee People chain in Oregon believes that Swiss Water decaffeinated coffees have been the right choice for his stores. “We’ve found that Swiss Water offers an unbeatable consumer proposition in that it is both chemical free and great tasting. While some decaf consumers don’t care how their decaf is processed, others, and they’re key to a vibrant decaf business, care very much. By investing more with Swiss Water we’ve assured ourselves that we’re not going to miss out a key segment of the coffee drinking public.”

Jay Isais, coffee buyer for The Coffee Bean & Tea Leaf, with over 90 stores operating domestically and over 180 worldwide, had this to say about the ongoing refinements at Swiss Water, “I’ve always been impressed with their commitment to process improvement and their responsiveness to concerns regarding quality on the part of the specialty roaster. I’m confident that they will continue to evolve their process to a point beyond that of all other decaffeination methods. My primary concern is the quality of the product and the integrity of the coffee’s original flavor. But it’s highly relevant that their process is also chemical free, that can make decaf a much easier sell to the consumer as well as eliminating any possibility of environmental or health concerns.”

Swiss Water’s convivial yet extremely competitive approach serves to build relationships with their customers while at the same time not drawing too much ire from their competitors. Especially in a market where the pie for everyone in the decaf sector, at least, seems to be shrinking.



Tea & Coffee - March/April 2002
Tecpacking

ASIC 2014


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