Retail

Personalized Coffee-As-A-Service, Subscription-Style

Trade Coffee

Coffee has come a long way — from mass-produced varieties in the supermarket to specialty coffee beans. The evolution began with brands like Folgers and Maxwell House, which made ground coffee available to the masses. Starbucks iterated on the model with a dark roast and flavor profile, bringing consumers a new shopping experience and price point. But the third wave of everyone’s favorite brew was exemplified by independent coffee shops with a lean toward lighter-roasted profiles — and a sense of transparency in the supply chain.

Among the companies seeking to bring that experience to consumers at home is Trade Coffee, which — Chief Executive, Mike Lackman, told PYMNTS — has a mission of “turning coffee drinkers into coffee lovers.” The world consumes coffee in large volumes, but Lackman believes consumers are not currently able to make the best coffee they’ve ever had in their homes. “The best way that we can help them get there is by having access to coffee that is personalized, that is fresh,” Lackman said — coffee that is roasted by people skilled in the business.

To help customers access coffee that meets their needs, Trade Coffee has procured an onboarding questionnaire. The process asks customers questions such as “What roast level do you typically enjoy?” and “Do you add anything to your coffee?” The latter question is important, according to Lackman, because one of the biggest dimensions of what flavor a consumer looks for is whether they put milk or sugar in their coffee. The combination of how light or dark a coffee each consumer prefers — plus what they put in it — allows the company to recommend coffee they’ll love. (Startup Driftaway Coffeealso has a similar service, matchingconsumers with different varieties.)

The Subscription Options

Trade Coffee sells beans (or ground beans) by the bag or through a subscription offering. Lackman said the company “really [sees] subscription as something that is a way to make sure customers just don’t run out of coffee.”

To help the needs of customers, the company has two different subscription options. For example, the Classic offering is designed to serve customers who are new to specialty coffee. Lackman said new customers are often unfamiliar with coffee jargon. They also might not ask the right questions or be overwhelmed by different brands as well as value propositions. Trade Coffee aims to provide an alternative with The Classic: “We saw this amazing way to connect roasters who are trying to grow their brands with consumers who are trying to make better coffee,” Lackman said.

For the more experienced palette, the company offers another subscription option. The Hookup serves customers who know what they like in a cup of coffee. “They’ve been making a pour over for a couple of years now,” Lackman said, describing a methodwhere coffee is manually brewed by pouring hot water over a filter with coffee grounds. They know about different flavor profiles by region or by roast level, Lackman said, and they seek variety. They also usually grind coffee on their own. Plan options are a feature of some of the top subscription services: According to the latest PYMNTS Subscription Commerce Conversion Index, 95 percent of the top performers in Q4 2018 offered plan options.

The Roasts

Trade Coffee sources its beans from a variety of sources, like Ritual, which is located in the mission district of San Francisco. Lackman said the company was one of the first third-wave roasters, making “just unbelievable coffee.” Beyond Ritual, roasters on the platform include both small and large operations — from husband-and-wife teams who make coffee once a week as well as national brands.

Trade Coffee finds its origins from roasters who wanted to expand their brand and their reach. Customers were looking for specificity, quality and freshness in coffee. Lackman said if his company is not bringing new people into the specialty movement, then the company is not doing its job. The mission, he said, is “not to be a cool store for people who already love coffee.” It’s to “turn people who drink a lot of coffee into people who really love the product.”

Companies like Trade Coffee show that the third-wave of coffee can also include direct-to-consumer (D2C) coffee brands looking to use technology to match consumers with specialty blends — and offer them the option of subscriptions for coffee convenience.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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