Kraft's simple solution for building a coffee brand

Early this month, the day after Halloween, North America’s most famous coffee chain announced the return of its iconic red cups for Christmas as well as its first new holiday beverage in five years. The Chestnut Praline Latte includes flavours of caramelized chestnuts, topped with whipped cream and spiced praline crumbs — it was created by a former pastry chef. Just over a week later, Kraft Canada hit publish on the latest YouTube video in its “Respect the Bean” campaign for the Nabob brand. Called “Decoraciones,” the spot shows the now familiar host offering a red cup of coffee, topped with whipped cream and a candy cane to an earnest Columbian coffee farmer. The farmer isn’t interested: “It’s like they’re more interested in the decoration than the coffee in the cup,” he said. For seven months now Kraft has been promoting the Nabob brand across Canada by boldly mocking modern coffee culture — in an earlier video, at the height of the pumpkin spice latte craze across North America, the same host suggested adding pumpkin to coffee to the confounded coffee farmers. This “substance over style” strategy seems to be paying off. Since launching in April, the campaign has enjoyed strong engagement levels, said Dana Somerville, director of coffee for Kraft Canada. The initial launch video — which includes a farmer spitting out a fancy coffee in disgust while another said it smells like s*** — has almost 900,000 views on YouTube. http://youtu.be/L_TdtXVOy3I More importantly, the campaign seems to be having an impact on the business. “From a business results standpoint, total Nabob household penetration is up almost a full point versus prior year,” she said. “And as a result of that we’re continuing with the campaign into next year.” The campaign represents the increasingly popular marketing theory that for brands to break through on a cluttered playing field, they have to stand for something that resonates with people as people, not just consumers. In this case, Kraft is taking a stand against the extremes of modern coffee culture for coffee simplicity, celebrating the essence of the humble cup of joe — the beans and farmers who harvest them. “Our point of view is really that Nabob stands for great quality coffee without pretense,” said Somerville. “We believe that coffee should be about coffee.” It is an important topic for Canadians who love their coffee. Like, a lot. Total sales approached $2 billion this year, up 21%, and are expected to reach $3 billion by 2018, according to Euromonitor International. But look a little closer and you see that volumes were only up slightly, about 4%. In other words, even in fragile economic times, Canadians are consuming a little bit more coffee, but spending a lot more on it. The surging shift toward pod-based single serve coffee is a large factor here. And in any category where demand is high, competition is invariably high too, with new players, products and brands constantly entering the game. According to Euromonitor, Kraft has about 32% of the total retail market (aside from Nabob, Kraft has Maxwell House and Gevalia). But Kraft’s Tassimo pod-based single serve system already faces stiff competition from Keurig and now Nestle, which has dominated in Europe for years and is working to carve out new share in North America, most importantly, through a single-serve at-home coffee maker that pours a full cup of coffee rather than the espresso shot preferred in Europe. Last fall, Kraft started working on a new national campaign for Nabob, including Quebec for the first time in 10 years. The starting point was the belief that brands need to have deep meaning with consumers. “It is all about big magnetic ideas that can pull, not just push… tapping into a cultural point of view,” said Somerville. It’s a mantra CMO Tony Matta has been instilling in the company since joining last summer. http://youtu.be/f7rRIvhD0-0 “More and more consumers are choosing brands that reflect who they are,” said Somerville. “When a brand has meaning outside the brand, it can help create the deeper personal connection… the challenge is how do you develop that connection in a credible and authentic way.” Kraft zeroed in on the rising consumer trend toward simplicity. “There is this group of people who value substance over style,” she said. The next step was determining how a brand can tap into that larger social trend. “For Nabob, it’s about simple pure coffee. What we are not is about pretentious coffee.” Once they knew they wanted to stand for coffee simplicity and against coffee pretension, working with creative agency Ogilvy & Mather, they quickly arrived at “Respect the Bean.” To bring that mantra to life they went to Columbia to shoot real coffee farmers documentary style. “That was a conscious choice… it’s getting closer to the farmers that brings the authenticity and credibility to our message.” Aside from the videos, Kraft is relying on out-of-home, social and other digital efforts including its first-ever sponsored stories on Buzzfeed: in August it was “18 Sugary-Sweet Coffee Trends That Must Be Stopped” and in September, “14 Reasons People Who Drink Black Coffee Are Happier.” Obviously, some people won’t like the campaign. The Pumpkin Spice Latte crowd is, after all, no small beans — Starbucks enjoyed a 10%-sales increase in sales last quarter at least in part because it started selling the popular PSL earlier than in the past. “We’ve seen a lot of consumers who agree with our point of view and we know that there are people who don’t, but that’s okay,” said Somerville. The goal of selling more coffee becomes more attainable when you become part of the cultural zeitgeist and resonate with people who are passionate about their coffee. That’s not always easy, but for Nabob it’s simple. This article first appeared in Marketing Magazine.