All about coffee by William H. Ukers
CHAPTER XXVI
4433 words | Chapter 123
WHOLESALE MERCHANDISING OF COFFEE
_How coffees are sold at wholesale--The wholesale salesman's place
in merchandising--Some coffee costs analyzed--Handy coffee-selling
chart--Terms and credits--About package coffees--Various types of
coffee containers--Coffee package labels--Coffee package
economies--Practical grocer helps--Coffee sampling--Premium method
of sales promotion_
Coffee is sold at wholesale in the United States chiefly by about 4,000
wholesale grocers, who handle also many other items of food; and by
roasters, who make a specialty of preparing the green coffee for
consumption, and who feature either bulk or trade-marked package goods.
Much the largest proportion of the wholesale coffee trade today is made
up of roasted coffees, though some wholesalers still sell the green bean
to retail distributers who do their own roasting. Most of the roasted
coffee sold is ground; although in some parts of the United States there
is at present a growing consumer demand for coffee in the bean. Of the
coffee sold in trade-marked packages in 1919 in the United States, about
seventy-five percent was ground ready for brewing.
The larger wholesale houses generally confine their operations to the
section of the country in which they are located, but some of the
biggest coffee-packing firms seek national distribution. In both cases,
branch houses are usually established at strategic points to facilitate
the serving of retail customers with freshly roasted coffee at all
times.
In recent years, too, it has become a general practise for the home
offices, or main headquarters, to advertise their product in magazines,
newspapers, street cars, and by mail and on billboards; while the
branches solicit trade in their territories by means of traveling
salesmen, local newspaper advertisements, booklets, circulars, and
demonstrations at food shows.
_The Wholesale Salesman_
The traveling salesman is probably the most effective agency in securing
the retailer's orders for coffee. A good coffee salesman not only sells
coffee, but he teaches his customer how he can best build up and hold
his coffee trade. He acquaints the retailer with all the talking points
about the coffee he handles, how to feature it in store displays and
advertisements, how to stage demonstrations and to work up special
sales.
If he is a _good_ salesman, he does not permit the merchant to buy more
coffee than he can dispose of while it is still fresh. And he shows the
dealer the folly of handling too many brands of package coffees. If he
sells coffee in bulk, the efficient salesman has also a sound working
knowledge of blending principles, and is able to suggest the kinds of
coffee to blend to suit the particular requirements of each grocer's
trade. In short, he takes an intelligent interest in his customer's
business, and co-operates with him in building up a local coffee trade.
_Some Coffee Costs Analyzed_
In estimating the price at which he must sell his coffee to make a fair
profit, the wholesale coffee merchant has many items of expense to
consider. To the cost of the green coffee he must add: the cost of
transportation to his plant; the loss in shrinkage in roasting, which
ranges from fifteen to twenty percent; packaging costs, if he is a
packer; the items of expense in doing business, such as wages and
salaries, advertising, buying and selling, freight, express, warehouse
and cartage, postage and office supplies, telephone and telegraph,
credit and collection; and the fixed overhead charges for interest,
heat, light, power, insurance, taxes, repairs, equipment, depreciation,
losses from bad debts, and miscellaneous items.[334] The average loss
for bad debts among grocers in 1916 was 0.03 percent of the total sales,
according to the director of business research, Harvard University, who
estimated also that the common figure for credit and collection expense
was 0.06 percent. The total cost of doing business has been estimated as
ranging between twelve and twenty percent of the total annual sales, so
that a bag of green coffee costing $16 in New York or New Orleans costs
the coffee packer in the Middle West from $22.33 to $24.56, according to
the expense of carrying on his business.
_Terms and Credits_
Wholesale coffee trade contract terms and credits are not dissimilar
from those in other lines of commerce. The wholesaler helps the retailer
finance his business to the extent of granting him thirty to sixty days
in which to pay his bill, offering him a cash discount if the invoice is
paid within ten days of date of sale. Until recent years, these terms
were frequently abused, the customer demanding much longer credits and
often taking a ten-day cash discount after thirty or more days had
elapsed. This abuse was particularly prevalent from 1907 to 1913, when
coffee prices were low and competition was especially keen.[335] In
addition, the retailers often demanded special deliveries of supplies,
which added to the wholesalers' costs; and some retailers refused to pay
the cost of cartage from the cars to their stores.
With the coming of high prices after the close of the World War, the
wholesalers showed a tendency to tighten up their credit and discount
terms, the National Coffee Roasters Association especially recommending
thirty days' credit, or at most sixty days, and a maximum cash discount
rate of two percent.
Another trade abuse which has been corrected almost altogether was the
practise of "selling coffee to be billed as shipped"; that is, the
wholesaler held coffee on order, and billed only when delivered, even
though several weeks or months had passed before shipment.
_About Package Coffees_
Since the beginning of the twentieth century, the sale of coffee in
packages has increased steadily until now (1922) this form of
distribution competes strongly with bulk coffee sales. While bulk coffee
is still preferred in some eastern sections of the United States, coffee
packers are making deep inroads there, to the extent that practically
all high and medium grade retailers feature package coffees, either
under their own brand name, or that of a coffee specialty house.
The prime requisite for success in any package coffee is the composition
of the blend. One of the leaders in the field, which we will call Y, is
said to be composed of Bogota, Bourbon Santos, and Mexican. In March,
1922, it was being sold at retail in New York for 42 cents. A competing
brand, which we will call Z, is said to be a blend of Bogota and Bourbon
Santos. It was being sold at retail in New York, at the same period for
the same price. Simultaneously, in the retail stores of a well known
chain system, a bulk blend composed of sixty percent Bourbon Santos and
forty percent Bogota was to be had loose for 29 cents.
The second important factor that contributes to package coffee success
is the container. It must be of such a character as will best preserve
the freshness--the flavor and the aroma of the coffee--until it reaches
the consumer.
Package coffee has not yet won universal favor. Some of the arguments
used against it are: that the price is generally higher than the same
grade in bulk; that it leads to price-cutting by stores that can afford
to sell it at about cost as a leader for other articles; that the margin
of profit is frequently too close for some retailers: that when the
market advances, some packers change their blends to keep down cost and
to maintain the advertised price; and that, when packed ground, there is
a rapid loss of flavor, aroma, and strength.
[Illustration: COAL ROASTING PLANT IN A NEW YORK FACTORY
THE ROASTED BEANS HAVE JUST BEEN DUMPED INTO THE COOLER BOX]
COFFEE-SELLING CHART
BY A.J. DANNEMILLER
Showing Prices to Be Obtained to Realize Certain Percents _on Sales_
of Roasted Coffee
_Cost Roasted_
_& Packed_ 10% 11% 12% 13% 14% 15% 16% 17%
4 4.44 4.50 4.55 4.61 4.67 4.72 4.77 4.82
4-1/2 5.00 5.06 5.12 5.18 5.24 5.30 5.36 5.43
5 5.55 5.62 5.68 5.75 5.82 5.89 5.96 6.03
5-1/2 6.11 6.18 6.25 6.33 6.41 6.49 6.57 6.65
6 6.67 6.74 6.81 6.89 6.97 7.06 7.15 7.24
6-1/2 7.23 7.31 7.38 7.47 7.55 7.84 7.74 7.84
7 7.78 7.87 7.95 8.05 8.15 8.25 8.35 8.45
7-1/2 8.34 8.43 8.52 8.62 8.72 8.83 8.93 9.04
8 8.89 8.99 9.09 9.20 9.31 9.42 9.53 9.65
8-1/2 9.45 9.55 9.66 9.77 9.87 9.99 10.12 10.25
9 10.00 10.12 10.23 10.35 10.47 10.59 10.72 10.85
9-1/2 10.56 10.68 10.80 10.92 11.04 11.17 11.31 11.45
10 11.11 11.24 11.37 11.49 11.63 11.77 11.90 12.05
10-1/2 11.66 11.81 11.93 12.07 12.21 12.36 12.49 12.65
11 12.22 12.37 12.50 12.64 12.85 12.95 13.08 13.26
11-1/2 12.77 12.93 13.07 13.21 13.37 13.54 13.68 13.86
12 13.33 13.49 13.64 13.79 13.95 14.12 14.28 14.46
12-1/2 13.89 14.05 14.21 14.37 14.53 14.71 14.88 15.06
13 14.44 14.62 14.78 14.93 15.11 15.30 15.47 15.66
13-1/2 15.00 15.18 15.33 15.51 15.69 15.88 16.07 16.27
14 15.55 15.73 15.90 16.08 16.28 16.48 16.67 16.84
14-1/2 16.11 16.29 16.48 16.65 16.86 17.05 17.26 17.47
15 16.66 16.85 17.05 17.23 17.44 17.65 17.85 18.07
15-1/2 17.23 17.43 17.61 17.80 18.03 18.22 18.45 18.67
16 17.78 17.98 18.18 18.38 18.60 18.83 19.05 19.28
16-1/2 18.33 18.54 18.75 18.97 19.18 19.41 19.64 19.88
17 18.89 19.10 19.33 19.52 19.76 20.01 20.24 20.48
17-1/2 19.44 19.66 19.89 20.10 20.35 20.59 20.83 21.08
18 20.00 20.22 20.45 20.67 20.93 21.18 21.43 21.69
18-1/2 20.55 20.79 21.02 21.24 21.51 21.77 22.02 22.29
19 21.11 21.35 21.59 21.84 22.09 22.36 22.62 22.90
19-1/2 21.66 21.91 22.16 22.41 22.68 22.95 23.21 23.50
20 22.22 22.47 22.73 22.99 23.25 23.54 23.81 24.11
20-1/2 22.77 23.03 23.30 23.55 23.83 24.14 24.40 24.70
21 23.33 23.60 23.87 24.14 24.42 24.70 25.00 25.30
21-1/2 23.88 24.16 24.43 24.71 25.00 25.29 25.59 25.90
22 24.44 24.72 25.00 25.28 25.58 25.92 26.19 26.51
22-1/2 24.99 25.29 25.57 25.85 26.16 26.47 26.78 27.12
23 25.55 25.85 26.14 26.42 26.74 27.06 27.38 27.71
23-1/2 26.11 26.41 26.70 27.00 27.32 27.66 27.97 28.32
24 26.67 26.97 27.26 27.58 27.90 28.24 28.57 28.92
24-1/2 27.22 27.54 27.84 28.15 28.49 28.83 29.16 29.52
25 27.78 28.09 28.41 28.73 29.07 29.41 29.76 30.12
_Cost Roasted_
_& Packed_ 18% 19% 20% 21% 22% 23% 24% 25%
4 4.88 4.94 5.00 5.07 5.13 5.20 5.26 5.33
4-1/2 5.49 5.57 5.63 5.70 5.77 5.84 5.91 6.00
5 6.10 6.18 6.25 6.33 6.42 6.50 6.55 6.68
5-1/2 6.72 6.80 6.88 6.97 7.06 7.15 7.24 7.33
6 7.33 7.42 7.50 7.60 7.70 7.80 7.90 8.00
6-1/2 7.94 8.03 8.13 8.24 8.33 8.45 8.56 8.67
7 8.54 8.65 8.75 8.86 8.96 9.09 9.21 9.33
7-1/2 9.15 9.26 9.30 9.50 9.63 9.75 9.87 10.00
8 9.76 9.88 10.00 10.13 10.26 10.39 10.53 10.67
8-1/2 10.37 10.40 10.63 10.76 10.90 11.04 11.19 11.33
9 10.98 11.12 11.25 11.40 11.54 11.70 11.85 12.00
9-1/2 11.59 11.73 11.88 12.03 12.18 12.34 12.51 12.67
10 12.20 12.34 12.50 12.66 12.82 12.98 13.16 13.33
10-1/2 12.81 12.95 13.12 13.29 13.46 13.63 13.81 14.00
11 13.43 13.57 13.75 13.93 14.10 14.28 14.47 14.67
11-1/2 14.03 14.19 14.38 14.56 14.74 14.93 15.13 15.33
12 14.65 14.81 15.00 15.19 15.38 15.58 15.79 16.00
12-1/2 15.24 15.43 15.63 15.83 16.02 16.23 16.45 16.67
13 15.85 16.05 16.25 16.45 16.67 16.87 17.10 17.33
13-1/2 16.46 16.67 16.88 17.08 17.31 17.53 17.76 18.00
14 17.07 17.28 17.50 17.72 17.95 18.17 18.40 18.67
14-1/2 17.68 17.90 18.13 18.35 18.59 18.83 19.07 19.33
15 18.29 18.51 18.75 18.98 19.23 19.48 19.74 20.00
15-1/2 18.90 19.13 19.38 19.61 19.87 20.12 20.39 20.67
16 19.51 19.75 20.00 20.25 20.51 20.77 21.05 21.33
16-1/2 20.12 20.38 20.63 20.88 21.16 21.42 21.70 22.00
17 20.73 21.99 21.25 21.51 21.78 22.07 22.36 22.67
17-1/2 21.34 21.60 22.88 22.15 22.43 22.72 23.03 23.33
18 21.95 22.22 22.50 22.78 23.05 23.37 23.68 24.00
18-1/2 22.56 22.84 23.13 23.42 23.70 24.02 24.34 24.67
19 23.17 23.45 23.75 24.05 24.34 24.67 25.00 25.33
19-1/2 23.78 24.07 24.38 24.68 24.99 25.32 25.66 26.00
20 24.39 24.68 25.00 25.31 25.64 25.97 26.32 26.67
20-1/2 25.00 25.30 25.63 25.94 26.28 26.61 26.97 27.33
21 25.62 25.92 26.25 26.58 26.92 27.26 27.63 28.00
21-1/2 26.22 26.54 26.88 27.22 27.56 27.91 28.28 28.67
22 26.83 27.16 27.50 27.86 28.10 28.56 28.94 29.33
22-1/2 27.44 27.78 28.13 28.48 28.85 29.22 29.61 30.00
23 28.06 28.38 28.75 29.11 29.48 29.86 30.26 30.67
23-1/2 28.66 29.00 29.38 29.76 30.12 30.51 30.92 31.33
24 29.27 29.62 30.00 30.38 30.77 31.17 31.58 32.00
24-1/2 29.88 30.24 30.63 31.02 31.41 31.81 32.24 32.67
25 30.49 30.86 31.25 31.65 32.05 32.47 32.90 33.33
NOTE, FOR EXAMPLE: Coffee costing 13.50 per 100 pounds
(see first column), to realize 17% _on sales_, must bring
16.27; which really represents 21% _on cost_
Friends of package coffees point to the saving in time in handling in
the store; to the fact that the contents of a package are not
contaminated by odors or dirt; that the blends are prepared by experts
and are always uniform; that the coffee is always properly roasted; and,
in the case of package ground coffee, properly ground; that the brand
names are widely and consistently advertised; and that the retailer has
the benefit of the packer's co-operation in building up sales campaigns,
by means of booklets and local advertising.
_Various Types of Coffee Containers_
Five types of containers are used for packing coffee, namely, cardboard
cartons, paper bags, fiber or paper cans, tin cans, and composite (tin
and fiber) cans and packages. Fiber packages include paraffin-lined as
well as those that have been chemically treated with other water-proof
and flavor-retaining substances.
The carton is popular, because it takes up less room in storage and in
shipment to the packing plant, and also because the label can be printed
directly on the package. Another economy feature is its adaptability to
the automatic packaging machine, which transforms it from a flat sheet
into a wrapped and sealed package of coffee. Moisture-proof and
flavor-retaining inner liners and outside wrappers are generally used to
prevent rapid deterioration of the coffee's strength and aroma.
Paper bags are the least expensive containers to be obtained; and when
lined with foil or prepared paper, they are considered to be
satisfactory. Like the carton, the label can be printed directly on the
bag. They also lend themselves to close packing in shipping cases.
Another popular type of container is the paper, or fiber, can which is
made of fiber board with a slip cover. Fiber cans are also made with
tin tops and bottoms, the metal parts supplying a measure of rigidity to
the package. These composite packages are made round, square, oblong, or
cylindrical.
Paraffined containers are characterized by an outer covering of glossy
paraffin, and are made in various shapes. In some makes, the paraffin is
forced into the pores of the paper base, making for added
flavor-retaining and moisture-proof properties. In this type of package
the label may also be printed direct on the package.
In recent years, vacuum packed coffee has won great favor, first in the
West and latterly in the East. Tin cans are used. Vacuum sealing
machines close the containers at the rate of forty to fifty a minute.
Private tests by responsible coffee men are said to have shown that
coffee in the bean or ground, when vacuum packed, retains its freshness
for a longer period than when packed by any other method.
_Labels_
Coffee packers must give due attention to certain well defined laws
bearing on package labels. Before the Federal Pure Food Act went into
effect on January 1, 1907, many coffee labels bore the magic names of
"Mocha" and "Java," when in fact neither of those two celebrated coffees
were used in the blend. Even mixtures containing a large percentage of
chicory, or other addition, were labeled "Pure Mocha and Java Coffee."
The enactment of the pure food law ended this practise, making it
compulsory that the label should state either the actual coffees used in
the blend, or a brand name, together with the name of either the packer
or the distributer. When chicory or other addition is used, the fact
must be stated in clear type directly following the brand name. The
reading matter on the label should contain facts only, and should not
bear extravagant claims of superior quality or of methods of preparing
or packing that have not been followed.
_Coffee Packaging Economies_
During the United States' participation in the World War, tin became
practically unobtainable, and coffee packers turned to paper and fiber
containers as substitutes in packaging nearly all grades. In this war
period, commercial economy became a fetish in the business world; and
coffee packers worked to save not only material, but shipping space,
labor, and time. Paper and fiber containers proved to be not only
practical but economical packages. Because of their war-time experience,
many packers changed permanently to square and oblong containers. They
found these containers could be packed "solid" in shipping cases,
leaving no unfilled space between packages as is the case with
cylindrical cans; also, smaller shipping cases could be used. As a
further measure of economy, several packers changed from the square
"knocked-down" paper or fiber carton to the oblong carton that is made
up, filled, and sealed by automatic machinery from a flat, printed sheet
of cardboard. This type of container is generally lined or wrapped with
a moisture-proof and flavor-retaining paper.
There has been a tendency in recent years to standardize coffee packages
as a means of working out packaging and shipping economies. One of the
leading American proponents[336] of standardization said:
One of the first arguments raised against standardization is that
it eliminates individuality, and individuality is one of the big
guns covering the front line trenches in the war of competition.
The folly of recommending that every one-pound coffee carton, for
instance, should be of exactly the same size and shape is
immediately apparent; but let us not confuse such unification with
standardization.
Assuming that a pound of coffee may be safely contained in
seventy-two cubic inches, we find that a carton three inches thick
by four inches wide by six inches high will serve our purpose; and,
as an illustration of extremes, a carton three inches thick by
three inches wide by eight inches high, or one [carton] two inches
thick by six inches wide by six inches high, will each have exactly
the same cubical contents. In fact, there is an almost infinite
variety of combinations of dimensions which will contain
substantially seventy-two cubic inches.
As an example of how coffee packages can be standardized this authority
cites the following sizes of flat-sheet containers and their respective
dimensions and capacities:
THICK AND WIDE HIGH CONTENTS
Size Inches Inches Cubic Ins.
1 lb. 2-5/8 by 4-1/2 6-1/4 73.83
1/2 lb. 2-1/4 by 3-1/8 5-1/4 36.91
1/4 lb. 1-9/16 by 2-5/8 4-1/2 18.46
[Illustration: VARIOUS TYPES OF COFFEE CONTAINERS
THIS GROUP OF LEADING TRADE-MARKED COFFEES ILLUSTRATES THE WIDE VARIANCE
IN STYLES OF CONTAINERS USED BY COFFEE-ROASTERS. THE PACKAGES SHOWN ARE
AS FOLLOWS:
1--Double carton. 2, 3--Cartons. 4--Fiber sides, tin top and bottom,
friction cover. 5--Vacuum tin can. 6--Fancy paper bag.
7--Machine-wrapped paper package. 8--Fancy paper bag. 9--Carton with
patented opening and closing device. 10--Wrapped paper package. 11--Tin
can with slip cover. 12--All-fiber can with slip cover. 13--Tin can with
slip cover. 14--Lithographed tin can with friction cover. 15, 16--Tin
cans with slip covers. 17--Squat tin can. 18--Napa-can. 19, 20,
21--Vacuum tin cans.]
The advantages claimed for these packages are that each is well
proportioned and makes a good selling appearance; each bears a direct
relation to the other two; and all may be handled with uniformly good
results on the same set of standardized packaging machinery. One size of
shipping case, instead of three, may be used to hold exactly the same
number of pounds of coffee, regardless of whether shipped in one-pound,
half-pound, or quarter-pound cartons. For smaller dealer assortments,
any two, or all three sizes also exactly fit the following standard
shipping cases:
For 36 lbs., 13-7/8" by 16-1/2" by 12-3/4" high
For 54 lbs., 13-7/8" by 16-1/2" by 19-1/8" high
This standardization of packages and shipping containers results in a
lower cost of containers and a smaller stock to carry, with attendant
reductions in details in purchasing and billing departments, in
inventories, and in many other overhead expense factors.
_Practical Grocer Helps_
Wholesale coffee merchandising does not properly end with the delivery
of a shipment of coffee to a retailer. The progressive wholesaler knows
that it is to his best interest to help that grocer sell his coffee as
quickly as possible; to make a good profit on a quick turn-over; and to
dispose of it before the coffee has deteriorated.
Practical co-operation between wholesaler and retailer is one of the
most important factors in coffee merchandising. In these days of keen
and unremitting competition, neither agency can stand alone for long.
The progressive wholesaler does not sell a retailer a poorer quality of
coffee for any particular grade than his trade calls for, and he does
not load him up with more than can be disposed of while still fresh. He
gauges the capacity and facilities of each retail customer, and then
gives him practical help to keep the stock moving.
The packer of branded coffees helps by advertising to the consumer in
magazines and newspapers, always featuring the name of his brands; and
he supplies the grocer with educational pamphlets and booklets on the
growing, preparation, and merits of coffee in general, with an added
fillip about the desirability of his particular brand. Through his
salesmen the packer shows the grocer how to display the coffee on the
counter and in the window, and often supplies him with placards and
cut-outs featuring his brand. He co-operates in staging special coffee
demonstrations in the store; instructs the retailer in the importance of
teaching his clerks how to talk and to sell coffee intelligently; and
how to prepare advertising copy for his local newspaper, so as to get
the fullest measure of profit from the wholesaler's national or
sectional advertising.
_Coffee Sampling_
The sampling method of creating a demand for merchandise has been tried
in the wholesale coffee trade, only to be abandoned by the majority of
packers. With other and more satisfactory ways of creating consumer
interest, promiscuous sampling was found to be too expensive, in view of
the comparatively small returns. One indictment against sampling is that
it does not make any more impression on the average person than does an
advertisement that appears only once, and is then abandoned. Wideawake
merchants have learned that the public's memory is exceedingly short;
and that they must keep "hammering" with advertisements to establish and
to maintain a demand for their products.
It would seem that the logical place for sampling is in the retailer's
store, especially in connection with demonstrations. Many progressive
grocers stimulate interest in their coffees by serving, on special
demonstration days, small cups of freshly brewed coffee, giving the
customer a small sample of the brand or blend used, to be taken home to
see if the same pleasing results can be obtained there also. Generally
this form of sampling, when properly conducted, has shown a larger
percentage of returns than any other method.
_Premium Method of Sales Promotion_
For many years, the premium method of sales promotion has been an
important factor in wholesale coffee merchandising, as well as in retail
distribution. The premium system has been characterized as a form of
advertising; and many coffee packers and wholesalers prefer to spend
their advertising appropriations in that way rather than in transitory
printed advertisements in newspapers and general magazines.
While certain forms of the system have been legislated out of existence
in some states, friends of the plan claim that it is a true
profit-sharing method which "blesses both him that gives and him that
takes"; and that it is an advanced and legitimate means of promoting
business, when properly conducted. They assert that it is a system of
sales promotion whereby the advertising expense, plus a large
percentage of the profits of the business stimulated thereby, is
automatically returned to the dealer buyer, without increasing cost or
lowering the quality of the product so advertised; that it eliminates
advertising waste by producing a given volume of sales for a given
expenditure of money; that it reduces the cost of advertising by
prompting a continuous series of purchases at one advertising expense;
that it promotes cash payments and discourages credit business. Premium
users claim that the force of a printed advertisement is often spent in
stimulating the first purchase; while to secure a premium, the purchaser
must continue to buy the commodity carrying the premium, or trade with
the giver of the premium until merchandise of a stipulated value or
quantity has been purchased.
In general practise, the premium-giving coffee packer or wholesaler may
either offer the retailer an inducement in the form of a desirable store
fixture, household article, or item for his personal use; or he may
offer it to the consumer through the retailer.
The methods of giving the premium are numerous. To the retailer he may
give the article outright with each purchase of a stipulated quantity of
his coffee; or he may offer it as a prize to the retail distributer
selling the most coffee in a certain period in a specified territory.
Frequently the premium is of such value that the wholesaler can not give
it with any quantity of coffee a distributer can dispose of in a short
time; so he issues coupons or certificates with each purchase,
permitting the retailer to redeem the premium when he has saved the
required number. Or, the retailer may get the premium with the first
purchase by paying the difference in cash.
In giving premiums to consumers, the wholesaler follows the same general
plan used with retailers, except that in most cases the coupons are
packed with the coffee and are redeemable at the retailer's store.
Sometimes, however, the consumer sends the coupons or certificates to
the wholesaler, getting the premium direct from him. In another phase of
the premium system, the retailer works independently of the wholesaler,
buying and giving away his own premiums to promote or to hold trade for
his store. This phase is explained in the chapter on retail coffee
merchandising.
[Illustration]
[Illustration: LUHRS, OF POUGHKEEPSIE, N.Y., FEATURES FRESHLY ROASTED
COFFEE IN HIS WINDOW
Smoke from the roasters is blown into street through the coffee pot
hanging over the door]
[Illustration: JOHNSON, OF RED OAK, IOWA, ROASTS BEFORE THE CUSTOMER
Showing a Royal roasting and grinding equipment]
[Illustration: FRESH ROASTED-COFFEE IDEA IN RETAIL MERCHANDISING]
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