- 91% of consumers prefer authentic brands, but misuse of the term “specialty” is eroding trust
- Rising year-on-year growth is fuelling subpar cafes prioritising profits over quality
- Clear standards are crucial to protect quality cafes and preserve value chains
THERE is no shortage of coffee shops that label themselves as “specialty” – but the number of coffee shops that serve a cup of coffee that would meet James Hoffmann’s expectations are few and far between.
Not all establishments live up to the promise of quality that the label implies. Many cafés invest in high-end equipment, for example. La Marzocco espresso machines and Mahlkönig premium electric burr coffee grinders have become increasingly common in coffee shops in recent years – but have the baristas been trained in proper brewing techniques? More often than not, the answer is no.
Others charge premium prices for coffee made from lower-grade coffees that fall short of specialty-grade standards, or serve otherwise excellent coffee using poorly maintained equipment.
The lack of regulation or a more restrictive definition around the term exacerbates the problem. Unlike terms like “organic,” which require certification, “specialty” remains loosely defined.
“Nobody can clearly define what ‘specialty’ coffee is and there is no consistency to the application of most of the definitions that currently do exist,” says Spencer Ross, associate professor of marketing at the Manning School of Business, University of Massachusetts Lowell.
Since the founding of the SCA(A), the definition of specialty coffee most are familiar with is a cup score of 80 points or above. Now the definition of specialty coffee is in limbo, shifting from a 100 point scale to one based on its attributes or “specialness.”
This new working definition recognises that a coffee’s cup score alone is insufficient to justify its premium status. However, it also raises a critical question: Why label coffee as “specialty” when the value it delivers can vary so significantly?
Brands are eager to capitalise on the premium value that specialty coffee commands. The global retail sector value was projected to increase to 12.5 billion, with premiumisation accounting for 52% of this expansion.
The growth of specialty coffee markets globally is still surging. In an essay he wrote on the topic, Spencer finds that “year-over-year growth in the U.S. alone is nearly 20%, YOY growth in the Asia-Pacific region is 15.3%, and YOY growth in Europe is 9%.”
This permissiveness of specialty’s definition risks diluting its value and shaking consumers’ confidence, much like the overuse of the word “artisanal” in food markets. Both these words imply that the products they define were made with specialised craftsmanship and high-quality ingredients.
Brands that do not have either the skills or quality ingredients yet market their products as “specialty” potentially threaten the reputation of the sector, undermining the trust of discerning consumers who seek an authentic, high-quality experience.
The dilution of the third wave movement
The third wave coffee movement, which emerged in the early 2000s, sought to elevate coffee to an artisanal craft, emphasising transparency, skill, and exceptional quality. Initially, it was a response to coffee’s commodification, prioritising micro-lots, ethical sourcing, and precision brewing.
The third wave of coffee aligns with what sociologist Alessandro Gerosa describes as the neo-craft movement, a group of retailers known as “taste dealers” who demonstrate both expertise and passion in their craft.
In his article “Will Neo-Craft Retailing Save the High Street?” he notes that “neo-artisans frame the products they sell and the atmosphere of the place as authentic and distinctive from every other competitor, positioning themselves in open opposition to industrial and standardised production.”
But as the movement gained popularity, its principles became harder to uphold at scale. Specialty coffee chains proliferated, and the line between truly specialty shops and those merely riding the trend blurred. This mainstreaming diluted the movement’s core values.
As a growing number of small novice players saturate the market, competing with existing large commercial coffee brands that loosely try to copy specialty coffee brands, its definition is becoming muddier than ever.
Brands falsely marketing artisan-made products at scale may fail to meet consumer expectations, or worse, anger them. In 2015, Mcdonald’s launched the McMór in Ireland, receiving considerable backlash from Irish consumers.
Folgers, long associated with affordable, no-frills coffee, introduced its 1850 line in an effort to appeal to specialty-curious consumers. However, the brand has struggled to resonate with this audience, failing to gain traction or achieve success with these uncharacteristic offerings, according to the Senior VP of Smucker – Folgers’ parent brand – himself.
“Specialty coffee’s shift from single-origin to single-estate – and further into microlots and nanolots – has fuelled a romanticised demand-side narrative about the ‘perfect’ way to prepare coffee. This, in turn, has birthed a cottage industry of brewing equipment and techniques, channeling the focus toward objectifying and quantifying quality,” says Spencer.
Nespresso, in collaboration with Blue Bottle, recently introduced Blend No. 1, claiming to “bring you the best of both brewing worlds.” Designed for versatility, it offers the blend in both whole bean and capsule formats, claiming premium quality for both brew options.
Meanwhile, case studies have shown that key factors contributing to the success of specialty coffee shops are product quality, barista expertise, and taste and flavour. Similarly, barista knowledge and expertise play a significant role in shaping customers’ perceived value in coffee shops.
Implications for consumers and the industry
The proliferation of coffee shops that carry the name specialty poses significant risks to both consumers and the value chain. For consumers, disappointment at a supposedly specialty café can erode trust in the segment as a whole.
Mass market brands like McDonald’s are building marketing campaigns built on highlighting consumer disappointment of the specialty coffee sector when it fails to meet expectations.
Over time, this could diminish demand as patrons grow skeptical of its promise – much as they did in the 70’s, when coffee quality worsened and consumers moved to competing beverage sectors like soda.
For the industry, the dilution of the specialty label threatens not just the viability of genuinely quality-driven coffee shops, but of quality-driven value chains.
“This is the fundamental problem with trying to differentiate a commodity in a global value chain that relies on voluntary enforcement,” says Spencer.
“It creates a paradox wherein all stakeholders need standard terms and conditions – be they ISO standards, SCA standards, or other – so that the terms by which transactions occur are consistent. Yet it is extremely difficult to create standards that are consistently equitable and enforceable without placing undue burden on producers – just look at the EUDR, for example.”
If there is a dip in the demand for quality coffees because of poor customer experience, it will impact the ability of importers, exporters, and farmers to capture higher premiums leaving their coffees unsold.
Small to medium-sized specialty businesses, now operating on tighter margins than ever, may struggle to compete with mass market brands offering similar cup quality that are buying the same lot for pennies on the dollar, exploiting specialty’s integrity for profit.
As with many commercial challenges, this also comes with potential opportunities.
The erosion of trust could pave the way for a new desire from consumers – a renewed emphasis on authentic experiences. By setting standards that are clear and consistent, the industry can differentiate authentic specialty coffee once again. In the case of Mcdonald’s McMór, for example, the Food Safety Authority of Ireland (FSAI) officially stated that it did not comply with its regulatory standards.
Research reveals that 91% of consumers are inclined to support brands they perceive as authentic. Furthermore, 62% indicate that they would either buy from an authentic brand or switch to it from a competitor.
This resurgence could cater to consumers increasingly seeking authenticity in their purchases, creating a niche for truly exceptional coffee.
As substandard coffee shops co-opt the specialty label, the coffee industry faces a critical juncture. To preserve its integrity, stakeholders must address this reputational crisis through clearer definitions, better consumer education, and stricter quality benchmarks.
Coffee Intelligence
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