7/31/2019 Eight O Clock Coffee

1/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

New Things Are Brewing

at

Eight OClock Coffee

7/31/2019 Eight O Clock Coffee

2/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

The Eight OClock Story Eight OClock whole bean coffee sold in A&P stores since 1859 1920s - 1950s: #1 Retail Coffee brand in America

1970s: Eight OClock begins selling to third party retailersEstablished large C-store Retailer partnership 1980s: Pagkaging innovation - freshness valve 1990s: Product innovation - blends and flavors

Rated #1 retail coffee brand by Consumer Report

2003: Became a stand-alone organizationRated #1 By Good Morning America

2004: Introduced ground coffee line extensionRated #1 Buest Buy by Consumer Report

2009: Rated #1 Coffee by Consumer ReportMarch 2009 Issue

7/31/2019 Eight O Clock Coffee

3/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

Brand:

Positioning:

Benefit:

Reasons why:

High quality coffee at a reasonable price(Value Gourmet)

Best tasting cup of coffee

Better beans make a better cup-High quality 100% Arabica beans

Over 150 years of coffee expertise

Eight OClock Coffee Owns a Unique and Valued Positionin the Coffee Marketplace!

7/31/2019 Eight O Clock Coffee

4/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

Clear Leader in the Value Gourmet SegmentHigher Quality at a Value Price

PREMIUMGOURMET

VALUEGOURMET

REGULARGOURMET

PremiumQuality

-100% premium Arabica

PremiumPrice Starbucks=63%ofsegment

HighQuality

-100%Arabica

ValuePrice

EOC=54%ofsegment

GoodQuality

-Robusta blend

LowPrice

MaxwellHouse&

Folgers=82%of

segment

7/31/2019 Eight O Clock Coffee

5/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

EOC Meets the Needsof All Coffee ConsumersOverall Acceptance

7.0

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

Eight OClock

MaxwellHouse

ChockFullONutsFolgers Classic

DunkinDonuts

Starbucks

MaxwellHouse

Eight OClock

Folgers ClassicChockFullONuts

DunkinDonuts

Starbucks

Starbucks

Eight OClockDunkinDonutsChockFullONuts

Folgers Classic

MaxwellHouse

Total Ground Users(n=159)

Taragon Corporation, October 2004

Weak(er)CoffeeSegment(n=119)

Strong(er)CoffeeSegment(n=40)

7/31/2019 Eight O Clock Coffee

6/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

Eight OClock Coffee Leads Competitorson Key Taste Attributes

Blind Taste Test Results

Overall Taste Freshness Richness Smoothness

Eight OClock Maxwell House Folgers Starbucks

37%

27%

22% 23%

36%

24%27%

24%

41%

25%26%

33%

41%

28% 29% 29%

7/31/2019 Eight O Clock Coffee

7/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

Coffee RatingsConsumer Reports.org

CAFFEINATED100percentColombianbrews. VERY GOODFragrant with floral and earthy notes. Good choices even when black.1 Eight OClock Coffee100%Columbian $6.28 .15 1402 Caribou CoffeeColombiaTimana 11.76 .36 1953 Kickapoo CoffeeOrganicColombia 14.33 .40 155 GOODFewerorweakerfavorableflavors,moreorstrongerflaws;milkandsugarmayhelp.4 Starbucks CoffeeColombiaMedium 11.53 .25 1155 Bucks County Coffee Co.Colombia 8.85 .34 1956 Archer Farms(Target)ColombiaSupremo 9.05 .27 180

7 Gloria Jeans CoffeesColombianSupremo 12.99 .32 1108 Chock ful l oNuts100%Colombian 5.19 .10 1109 Peets CoffeeColombia 14.12 .31 13010 Maxwell HouseColombianSupreme100% 4.80 .05 55 ColombianMed-Dark11 FolgersGourmetSelectionsLivelyColombian 8.67 .09 60

Medium Roast12 Millstone100%ColombianMediumRoast 11.55 .13 6013 FolgersCoffeehouseSeries100%Colombian 5.11 .05 50 Med-Dark

Product Costs Caffeine Attributeslevel

(mg/cup)

Withintypes,inorderofoverallquality.

KeyN

umber

Perpo

und

Percu

p

Earthy

Fruity

Nutty

Wood

y

Paper

y

Burnt

BESTBUY

7/31/2019 Eight O Clock Coffee

8/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

Eight OClock Consumersare Extremely LoyalWhole Bean Loyalty77%

54%

Eight OClock

Totallbs./

buyer

NielsonHouseholdPanel2/21/04

Starbucks Folgers Millstone

47%44%

7/31/2019 Eight O Clock Coffee

9/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

A record 2.4 Billion lbs of roasted coffee

was consumed in the US last year

More than 60% of the population

drinks coffee; the highest rate ever Out of home consumption

is increasing 6% last year; in-home

consumption declined 6%

57% of people who drink coffee at

work purchased it outside of the office

Young people are rejecting robusta

based coffees such as Folgers and

Maxwell House

Private Label is on the wane; too much

confusion for customers; brands more

prevalent in turbulent times

With gas and cigarette marginsdeclining in C-stores, coffee is often

the #2 profit generator for the store;

and retains loyal customers

C-stores continue to improve coffee

offerings; increase profits in category;

increase customer loyalty and

frequency through coffee

POS and branding

within the store is

extremely important

Current Industry Situation

7/31/2019 Eight O Clock Coffee

10/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

Filter Packs vs Ground Coffee

There is a reason

filter packs are not

used at Starbucks,

Dunkin Donuts,

McDonalds, 7-Eleven,

gourmet restaurants

and coffee cafes...

They make lousy

coffee!

FilterPacksdonotlieflayinthebrewbasket

Thisproducesaveryinconsistentcupofcoffee

Somearestrong,someareweak

Customerendsuppayingforcoffeethatmaynotgetbrewed

Oncefoilpackageisopened,coffeestartsgoingstale

Groundcoffeesitsevenlyinthebrewbasket

Maximum,consistentflavorisextractedduringbrewcycle

Ittakes5additionalsecondstobrewagreattastingcoffee

24pots/day-thatsonly2minutesextra

Grindingwholebeanswillincreasesalesanadditional15%!

10morecupssoldperday=$2500inadditionalprofits!

7/31/2019 Eight O Clock Coffee

11/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

Potential ProfitsSelling10morecupsadayperstoreequalsanadditional

$2500 in profits per location!

2 5 10 20

$1.15 $0.90 78% -$72 $913 $2,554 $5,836

PROFIT CALCULATOR 16 OUNCE CUP

How an increase in coffee quality affects per store profit

IncreasedCoffeeCostPerCup $0.01

CurrentCupsSoldPerWeek 700

WastedCupsPerWeek 35

IncreasedAnnualCoffeeCost $728ADDITIONAL CUPS SOLD PER DAY

SELLINGPRICE

PERCUP

PROFIT

PERCUP

MARGIN

7/31/2019 Eight O Clock Coffee

12/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

POS and Branding Eight OClock Coffee has developed and great POS

package for restaurants, c-stores, and cafes

POS is readily available POS is expensive. Selection of materials should begeared for the anticipated volume of the location

Small venues 10-14 lbs wk (40 cups day)

7/31/2019 Eight O Clock Coffee

13/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

POS and Branding Large venues 15 lbs wk (65+ cups day)

7/31/2019 Eight O Clock Coffee

14/14

Q u a l i t y T a s t e V a l u e T r a d i t i o n E V E R Y D A Y.

Competition is getting fierce

Coffee is a 70% Margin business for a retailer

Increasing Throw Weight is Most SignificantImprovement You can make

Provide Dark, Robust Options

Brands are coming back strong

Condiment choices are increasing

Operational control at store level is critical

Excellent time to raise retail prices to keep up

With wholesale increases

Summary