A Cup for Joe

by Leung Man

I drink several cups of coffee daily， some of which I brew myself and some from coffee shops. This habit has continued for more than two decades. Over the years， Ive witnessed the development of the coffee culture， as well as its parallels to the evolution of the free market in China.

Early in the 1990s， a dozen years after Chinas implementation of reform and opening-up policy， I paid a visit to an elderly professor in Beijing. At the time， professor wasnt a highly-paid job， and coffee was an extravagant luxury. So， we brought coffee as gift. He was so delighted that he couldnt wait to open it and share it with us. The coffee we brought was just instant coffee that was already available in foreign supermarkets. At the time， drinking coffee had become trendy throughout China – from Hong Kong to Beijing， but no one would ask what kind of coffee you drank or where you bought it.

During the same period I visited New York， where a “specialty coffee” revolution was brewing. Coffee shops were popping up on every street corner， and they sold not only regular drip coffee， but also espresso. Some even offered whole beans for customers to grind themselves at home.

Later， the global coffee chain Starbucks entered the Chinese market， and high-end supermarkets began to offer options other than instant freeze-dried coffee. Coffeehouses have since spread throughout the country. Two decades after coffee erupted in the United States during the 1980s， the “specialty coffee” revolution finally swept across China. Today， Chinese people drink less mass-produced standard coffee， opting for one of hundreds of special blends， brands， and flavors.

After the economic recession of the 1970s， many products such as shoes and clothes shifted from mass production to more individuality. Coffee was included. During the decade， coffee sales dropped in the United States. In 1981， a coffee industry association invited Kenneth Roman， then CEO of the advertising agency Ogilvy& Mather Worldwide， to speak on how to revive the coffee industry.

A marketing expert， Roman advised coffee dealers to avoid falling into a price war. “Quality， value， and brands sell coffee，” he concluded. In the speech， he illustrated the various types of customers using several imaginary groups of people：“Mr. and Mrs. Grey are in their 30s. Both are employed and drinking coffee is a way of life for them. Mr. and Mrs. Pritchett， in their 50s， are approaching retirement. For them， money is a big concern， so they will choose the cheapest available coffee. Karen is a single woman who is busy with her job， so she doesnt spend a lot of time in the kitchen. For her， instant coffee is the best choice. Due to health concerns， decaf is suitable for Mr. and Mrs. Taylor in their 60s. College student Joe prefers cola， and for him coffee is outdated and uncool.”

Different products must be designed for each group of target customers. Perhaps“Mr. and Mrs. Grey” and “Joe” are the two demographics with the greatest market potential. Mr. and Mrs. Grey represent typical “yuppies” of the 1980s， who prefer designer clothing and similarly high-end choices for coffee consumption.

Attracting younger customers like Joe presents the greatest challenge for marketers. However， after successful people such as Mr. and Mrs. Grey make coffee a status symbol， college students who find Armani out of their price range will be happy to cough up three dollars for a cup of coffee. Romans speech marked a turning point for the coffee industry and ignited hope among merchants who were suffering during the industrys recession. They turned to specialty coffees that emphasize distinct flavors， origins， and brand images. In fact， the shift wasnt difficult because beans which were previously all mixed together could easily be separated according to origins and processing methods. The trend culminated with the emergence of countless smaller coffeehouses， some of which have gradually grown into global chains such as Starbucks.