And America’s Most Popular Coffee Brands are…
Bigger is not always better when it comes to statistical sampling. Statisticians set a sample size that produces reliable data, and making it larger often provides an increase in expense with no improvement in validity.
Consequently, a sample of 40,000 American coffee drinkers represented more than 100 million in a poll conducted in the 2014 Harris Poll EquiTrend Study. The purpose of the consumer-based poll was to measure preferences for coffee brands based on purchasing decisions as a guide for investors.
Defining the Goal
Perceptions that are held by consumers about brands are related to their purchasing preferences, and one purpose of the study was to identify them. Other key touchstones included brand familiarity and emotional connections that influence consumers as well as the development of marketing strategies.
The survey placed Dunkin’ Donuts Ground Coffee at the top of America’s seven most popular coffee brands, followed by Green Mountain and Folgers Ground. Included in the group of seven of the favorite coffee brands for 2014 were Seattle’s Best Ground, Maxwell House Ground, and Caribou Ground. The last company to make the list was McDonald’s McCafe Ground.
Other brands that achieved a rank below category average included Eight O’Clock Ground, Chock Full o’Nuts Ground, Nescafe Ground, Millstone Ground, and Starbucks Ground.
Identifying the Producers
According to The Motley Fool, only one of the top brands carries the name of the company that actually produces it. Keurig produces Keurig Green Mountain, but Starbucks produces Seattle’s Best. Mondelez markets Maxwell House, and J.M. Smucker produces Dunkin’ Donuts and Folgers. The Caribou brand belongs to Joh. A. Benckiser and McCafe to McDonald’s.
The brand names attract customers, but the producing companies receive the benefits. Keurig retained its second position on the list as it did last year, fending off efforts by competitors to lower it. Its single cup brewing system is an innovative approach that is resisting advances by tag teams composed of popular brand names and producers.
Finding Surprising Results
The Starbucks name brand did not appear on the list of the top seven although its Seattle’s Best did. Analysts noted that the Starbucks brand is popular world wide, but its ground coffee fell below the category average this year as well as last. Investors may need to observe that a solid position in one niche market does not necessarily indicate success in another.
What is probably less surprising is that Americans like low-end coffees like Maxwell House and Folgers. Parent company J.M. Smucker succeeded in placing brands in the first and third spots, an enviable position that reflects the popularity of its established and lower priced coffees.
Building a portfolio that includes brand names is recommended by Georgetown University researchers. They tested a hypothesis that linked brand recognition to success in financial investments. Using data that resulted from the financial crisis, they found that brand equity equates to better performance and lower volatility in stock selection.
While not as glamorous or dramatic as high visibility growth stocks, dividend stocks are not as likely to flame out. Their regular compounding and growth let them contribute significantly overtime to portfolios.
Sticking with the Familiar
Customer loyalty to a favorite product is based on many factors that include familiarity and quality as well as a brand’s ability to gain attention online, on social media and offline.
The Harris poll measures all of them, and some critics refer to it as nothing more than a popularity contest. But popularity is important to investors, as the Georgetown researchers confirmed. It indicates brand equity more accurately than rankings that are financially derived.
American consumers seem to prefer to buy familiar brands that have shown them a consistent level of quality and are priced at the low end of the spectrum.
Do you still think that getting best coffee bean gives you guarantee of the perfect brew? If you do, it’s probably time to rethink. High quality bean is only one half of the picture. Don’t forget that ultimately, you need the best brewer and meticulous preparation to come close to perfection.