UK Coffee - This Is Your Kodak Momentby Michael Cleland
Things to think about if you plan to open a coffee business in LondonNothing endures but change
Whether you’re a barista, cafe owner, roaster or trader, the UK coffee industry is not what it used to be. It’s more competitive and there is nothing you can do about it. In competition, only the wise survive and this is why your coffee business needs you to understand what killed Kodak.
This January will mark 6 years since Kodak officially filed for bankruptcy in one of the most infamous business failures of our lifetimes. 60,000 people, the economy of Rochester, New York and the rest of the brand’s global supply chain were - pun intended - hung out to dry. If there is an upside to the demise of Kodak it’s that it proved a universal truth that applies to all young industries - even specialty coffee.
Kodak went from being a household name to a classroom case study when they became one of the highest profile casualties of a condition which affects growing industries big or small. It’s diagnosed as Marketing Myopia but just means being short-sighted, an affliction which kills the super brand cash cows and emerging independent coffee companies equally. The shame is, it’s self inflicted.
Growing industries can be pretty enchanting. The growth tends to be rapid, the industries are noncompetitive and are rather lucrative too. Life in a growing industry is a dream and life is rewarding. Rewards are reinforcement and reinforcement is great if you want to condition behaviours. But reinforcement can be a b*tch too. This is what Kodak realised in retrospect when they missed the boat on the digital age of photography - ironic since they were the ones who invented it.
A Kodak engineer, Steven Sasson, invented the world’s first digital camera in 1975 and Kodak didn’t care. Apple released the world’s first mass consumer market digital camera in 1994 and Kodak didn’t care - but they designed and made it for them anyway. Kodak cared when they realised their inward-looking preoccupation with film meant that they had committed the cardinal sin of marketing by looking through their own lens instead of the consumer’s. By this time, however, it was too late. They had created their very own, unforgettable, Kodak moment.
Likes For Likes
‘You can’t compare anything to coffee’ is a phrase that’s over used and uninformed. It’s true, of course, if all you see is the product and its functions. But from that perspective, you can’t really compare any two products. You definitely can’t compare Kodak to MSN Messenger or even to the Sony Walkman, which is a shame because you’d be missing the bigger picture. Every industry was a growing industry once upon a time. They then became competitive so someone had to lose, and you can compare the causes of death. In a coffee industry which is suddenly seeming uncomfortably crowded, this is the important stuff.
This Is The Turning Point
As growing businesses in young industries, it appears everyone shares this natural bias to develop a myopic affliction. It’s relatively easy to grow so we must be doing everything right, right? It’s possible that we are, but not necessarily so - and either way, there’s probably someone right now planning how they’ll do it better. Our condition typically has the following symptoms:
Over-assurance that growth is guaranteed
Underestimating the threat of competitors
Preoccupation with the product
The problem with this is that it’s an inward-looking perspective, and while we’re busy asking ourselves ‘How we can make coffee more efficiently?’ (which is usually and inaccurately interpreted as ‘cheaper’), or complaining how ‘Cafes used to be a destination where delicious coffee was the USP’ - someone new is snapping up your loyal customers.
As soon as you have a competitor your customer has an alternative, and as soon as your customer has an alternative they have the power. For every Kodak worrying about making better film, there’s an Apple discovering that the customer really wants a digital interface that captures and shares their memories instantly. If you’re busy looking inwardly at your own needs it’s more than likely someone is already looking outwardly at your customers to understand and ultimately serve them better.
It boils down to this:Eventually industries become competitive and those who ‘sell products’ fail while those who ‘fulfil needs’ prosper. Fulfil the customers’ needs or someone else will.
Nothing Endures But Change
Getting outside of our own heads and understanding the consumer’s perspective is the fundamental challenge for a growing industry and the only way to gain market share away from the status quo. It’s also the best defence in the face of competitors who care less about your coffee and more about your customers.
Whether you’re a cafe owner, roaster or barista working in the UK coffee industry, your environment is now competitive and you can’t change it but you can change.
Ernest Hemingway wrote ‘The world breaks everyone and afterward many are strong at the broken places. But those that will not break it kills.’
You will lose business to competitors, you will gain it from them and you will encounter them in all shapes and sizes. But if you don’t break and change in line with the customer, the competition will kill you.