MELITTA JAVA CHAIN SETS AMBITIOUS GROWTH PLANS: SUPERMARKET BRAND TO GET NEW ADS AS COFFEE WORLD EYES STARBUCKS

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Melitta North America's European Coffee Classics division is brewing up a new image campaign for its ground coffee brand.

At the same time, the company -- best known for its cone-shape coffee filters -- is seeking to expand its 13-unit Coffee World cafe chain. The aim is eventually to become to Starbucks Coffee Co. what Burger King Corp. is to McDonald's Corp., a strong No. 2 player.

That's an ambitious goal, say industry analysts.

RUNNING BEHIND

"They're behind Caribou Coffee, Seattle's Best Coffee and God knows who else," said Dennis Lombardi, exec VP of restaurant consultancy Technomic. "They better find a unique positioning for themselves."

"There are a lot of people who want to be the No. 2 player," said Allan Hickok, a restaurant analyst who tracks Starbucks Coffee Co. for Piper Jaffray, adding that "there definitely is room for more coffee players."

Melitta opened its first Coffee World cafe in Philadelphia in '95, and has expanded to Tampa and Orlando. The units are owned and operated by the company, which now wants to expand via licensing. The cafes are supported by spot radio and newspaper ads.

Melitta's coffee is milder than that served at Starbucks, the cafe chain leader with more than 1,400 outlets and net revenue of $967 million for the fiscal year ended Sept. 28. Annual sales for Coffee World total about $3.5 million, said Michael Modzelewski, senior VP-corporate development.

The campaign for Melitta coffee, via FKQ Advertising, Clearwater, Fla., will include TV for the first time in several years, with a new tagline, "Yes! It's that good."

The effort is slated to be launched as a test in Philadelphia early next year, and may be rolled out to other East and West Coast markets, where Melitta sales are strongest.

Melitta is spending about $1.5 million on spot radio, outdoor and newspaper ads this year, for coffee, filters and coffee makers, Mr. Modzelewski said. Spending could more than double in 1998 as the TV campaign expands.

FOR UPPER-INCOME ADULTS

The ads will be targeted to Melitta's core customer -- upper-income, college-educated adults.

"We think there's an opportunity here, with the trends that are going on in the marketplace toward specialty coffee. We need a very strong focus for that," Mr. Modzelewski said. "We are very well-known for the systems and the prep part of this thing. We have a great coffee, and we want to be able to have people know about that."

Melitta ground coffee posted sales of $12.5 million in supermarkets for the 52 weeks ended Sept. 14, up 0.6% from the same period a year ago, according to

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