Short Answer: Private label coffee is coffee that is produced by one company but packaged and sold under the name of a client’s brand.
As time goes by, business people realized that private labeling can offer the attention to detail that makes coffee a favorite among its consumers.
Consumers are clearly turning away from commercial food, and the demand for local, craft food is increasing. Coffee is not exempt from this fundamental shift in our consumption pattern. Coffee is often perceived as great, you can read here to see why.
Come along with me as we explore what private label coffee is, why it is so popular with consumers right now, and tips on how to start your own private coffee label.
What is a private label coffee?
Private label coffee entails collaborating with an established manufacturer to produce high-quality coffee for a retailer to sell under its own brand name.
It enables retailers to concentrate on developing and growing their brand, while the manufacturing company can focus on producing high-quality coffee without having to worry about market competition or brand building.
Who makes private label coffee?
Private-label products are available in a lot of businesses, and this includes the coffee industry.
I researched and there are a lot of private coffee label brands and they’re really doing well in the private label sector.
The following table shows the top private label coffee vendors, ranked by their annual estimated revenue.
|Company||Headquarters||Annual Est. Revenue|
|1.||TreeHouse Foods, Inc.||Oak Brook, IL||$4.29 Billion|
|2.||Westrock Coffee Company, LLC||North Little Rock, AR||$351 Million|
|3.||Heartland Food Products Group||Carmel, IN||$3.36 Million|
|4.||Gillies Coffee Corporation||Brooklyn, NY||$3.12 Million|
|5.||C&S Coffee Roasters||Forest Park, IL||$1 Million|
Popular private label brands
Here are some examples of well-known private label brands that are also expanding globally:
- IKEA (assemble-your-own furniture)
- Tesco Everyday Value (pre-packed grocery)
- Original Use (men’s clothing)
- Prologue (women’s clothing)
- Universal Thread (denim for women)
- Heyday (consumer electronics)
- Smartly (everyday consumer products)
How to start your own private label coffee brand
Regardless of the size of your company, launching a private label coffee brand can help you set yourself apart in your market. Customers like private labels because of the value they provide.
Private label coffee brands are less expensive, and if you focus on providing a superior quality product, you will undoubtedly earn loyal customers.
The following are 5 tips that will help you start your private label coffee brand.
1. Select the coffee products you want to offer
Your brand should be able to offer your customers a one-of-a-kind experience that they won’t be able to get anywhere else. This raises the value of your private label coffee brand and makes it more appealing to customers.
Aside from that, what you decide to add to your product line will help you stand out from the crowd.
Choosing the right coffee products to sell in the market takes time and research. You’ll need to keep a watch not only on your competitors’ product range but also on popular online blends and brews.
It may take some time to choose the right coffee products, but it is always better to spend time researching ahead than to lose money by making poor decisions. Just make sure to choose products that represent your brand clearly to potential customers.
2. Identify your ideal customer
When it comes to promoting your private label coffee products, the most important factor to consider is the customer.
Knowing your target market will help you a lot in developing your brand and deciding which coffee products to offer to your customers.
When considering your target market, consider the following questions:
- Who is your ideal customer?
- Who are the people who will most likely buy your products?
- Where should your product be advertised?
3. Find a coffee manufacturer
Finding and collaborating with an experienced and dependable coffee manufacturer is one of the most crucial components of building your private label coffee business.
Choose a manufacturer who has worked with private labels before and can help you generate a profit.
4. Develop your brand
Creating your brand is one of the most exciting aspects of launching your own private label coffee company. Though there are no hard and fast rules, various considerations should be made, such as:
- Brainstorming a catchy product name
- Creating a logo design that customers will remember
- Packaging features which include colors, font, images and texture
- Types of products you’ll be offering such as pods for Nespresso, cups for Keurig, bags of roasted coffee, water-soluble drinks, and more
5. Start making your sample
After you’ve decided what you want to sell and found a dependable manufacturer, it’s time to prepare coffee samples.
Collaborate with your coffee manufacturer in creating superior coffee products that you will be proud to associate with your brand.
It’s always a good idea to start this process with some ideas about your product’s specifics. This could include bean origins, flavor profiles, certifications, and other information.
You can watch this video to better understand the basics of creating your custom coffee brand.
Advantages and disadvantages of private label coffee
Although there are many benefits of private label coffee, there are some disadvantages as well that can’t be overlooked.
Let’s have a look at its advantages first:
Advantages of private label coffee
• Retailers can have labels and packaging custom-made to their requirements, and they have several incentives to promote private label products. It also gives them control over their inventory.
• The private-label business owners can control many aspects of their business, such as their marketing, sales, and even pricing.
• Private label works wonders for the manufacturing company too when it comes to differentiating the company from its competitors. This is because no other brand carries the same label and quality of coffee that the manufacturer offers.
• By transitioning to private label, the manufacturing company gains the opportunity to maximize its sales because the retailer has undoubtedly had much broader coverage than the manufacturer. As a result, it saves money on marketing and distribution.
• Private label coffees have loyal customers because the product is tailor-made for a specific market.
• Private labels can also be very useful in fundraising because of their supportive customers.
• Coffee manufacturers can be confident in their sales because the brand operator or retailer knows their customers based and are focused on marketing the product.
Disadvantages of private label coffee
As discussed previously, there are some drawbacks to private label coffee, both for the manufacturer and the retailer:
•If a retailer limits its purchases from the manufacturer, this does not imply that the retailer saves money. The difficult part is that there is no defined quantity required to maintain adequate profit margins.
• If the packaging has a complicated design, then the profit margins may reduce for both the retailer as well as the operator.
In short, while the advantages of private label coffee outweigh the disadvantages, it is prudent to conduct adequate market research prior to embarking on the project.
To sum it all up
Private label products are becoming more popular in the market as a result of the benefits they provide and the coffee industry has also delved in into this business venture.
The key benefit of offering a private label service is that you can use your existing infrastructure, workforce, and equipment to generate more products, increasing earnings without requiring huge capital expenditure.
Private label retailers do well in the coffee industry because they know their customers intimately and therefore know what coffee products to offer that are tailored to their specific market.
As a result, they gain their customers’ unswerving loyalty.
But of course, private labeling isn’t always a walk in the park.
Retailers must conduct extensive research to understand their customers and fine-tune their product with the manufacturer’s know-how and equipment to truly achieve what the customer desires. As I mentioned earlier, the customer is the front and foremost focus in the private label business.
Private labeling is also a close-knit relationship between the retailer and manufacturer and both need to work hand in hand to achieve mutual long-term success to bring out the best product with the customer in mind and that also goes with the cup of coffee we purchase from them.