Peet's Coffee Offers Merchandising Tips For Independents

It's the perfect time for independent retailers to welcome our newest Red Oval partner, Peet's Coffee, to the IGA Red Oval family, as coffee consumption is rising across all age groups thanks to its health benefits. In fact, the global roasted coffee market is valued at $42.7 billion and expected to have a 5.7% compound annual growth rate (CAGR) between 2023 and 2030, according to Grand View Research.

We spoke with Nicholas Weisse, account manager at Peet's Coffee, about what sets the coffee brand apart from competitors and how they can help independent retailers optimize their assortments to cater to shopper trends.

What differentiates Peet's from your competitors?

The pursuit of better coffee starts with freshness. To ensure the highest standards of quality, Peet’s route to market leverages a dedicated direct store delivery (DSD) system that guarantees product integrity from roast to order.

But that DSD system still requires great coffee beans to be effective. We source coffee from the top 1% of the commodity market. It's all selected by taste and through third party verified sustainability measures (sourcing with impact). 

What shopper trends are you seeing in the category, and do you expect those to change in the next year?

Pack Sizes

During challenging economic times, consumers have historically switched to bulk buying in commodities (trading up to larger pack sizes). We recommend merchandising a variety of pack sizes to attract & retain the "all needs consumer."

Optimal Offerings

Many shoppers seeking better value are switching from the coffee bar to the grocery store. We recommend leveraging premium brands, like Peet's, to capture those shoppers. 

Our data shows that premium bag coffee is strong on the coasts, and our medium roast continues to drive segment growth with 44% of coffee-buying households purchasing. This trend also holds true in decaf segment as 77% of households purchase medium roasted decaf coffee. To capture these trends, Peet’s is expanding SKU selection and sizes in medium roast and decaf packages.

Flavor coffees are contributing to 50% of segment growth while only being 16% of the premium bag coffee share. Peet’s Coffee Is launching three core bag flavors and two limited time offers (LTOs) in Q2-Q3 2023.

How are you addressing supply chain and inflation issues right now?

Although inflation is a challenge for the CPG segment, Peet’s Coffee continues to be in line — if not below — average pricing increases in comparison to other national coffee brands. And due to our long-standing relationships with coffee farm partners and our nationwide DSD route to market, we have continued to keep retailer shelves full when warehouse coffee brands struggle.

Peet’s takes a numbers approach to SKU/roast optimization, ensuring capacity matches forecasted demand from field sales team: roast to order.

What is Peet's doing to ensure independents get their fair share of your products compared to large chains?

Over the last few years, Peet’s has utilized a data driven approach to SKU optimization, ensuring inventory stability at roastery, while expanding our warehouse and DSD network nationally. Because of that DSD network, we have dedicated route sales reps to manage, order, merchandise, rotate, and provide selling solutions.

How can our independent retailers engage with Peets and best let shoppers know they carry your products? 

1. Brand blocking in coffee set.
2. Carrying recommended SKUs (see list below).
3. Utilizing DSD sales rep support to feature displays and Peet’s Coffee branded shippers.

Merchandising Tips

Weisse shared this schematic with best merchandising practices for independent retailers.

For example, he recommends defining segmentation by value tier:

• Super-premium on top shelves
• Dedicated space to espresso capsules (a growing premium segment)
• Premium/mainstream in middle shelves (at eye level)
• Value segments near the bottom (canisters, private label, and instant coffee)
• Filters on bottom shelf

Then, vertically brand block:

• Organize by light roast to dark roast
• Ground bean followed by whole bean
• Include a horizontal power block for bags and K-cups when possible

Top SKUs to Stock

Ready to add Peet’s Coffee to your store’s assortment via their dedicated direct store delivery team? Email Peet's Nicholas Weisse to get started.