Yesterday at Austin’s grand technology orgy known as South by Southwest (SXSW), TOMS founder Blake Mycoskie announced the next step for his pioneering “one for one” shoe company—specialty coffee. The plan includes more than just a pop-up cafe in a shoe store, the new category of the TOMS brand will include wholesale roasting, a chain of retail outlets and a subscription club. The coffee, just like the company’s shoes and eyewear, will continue following the company’s model of giving to someone in need for every product sold, in this case water. Fortune has the scoop.
Generally, a celebrity’s foray into coffee isn’t really worth noting. However, Mycoskie specifically mentions specialty coffee pioneers like Intelligentsia, Stumptown and Blue Bottle as their competition and has tapped Angel Orozco, founder of LA’s Cafecito Organico as their new master roaster:
TOMS says it’s not targeting Starbucks so much as “third wave” artisanal roasters like Blue Bottle, Intelligentsia and Stumptown, cult coffee brands that keep cropping up in places like San Francisco and Portland. But TOMS Roasting Co. will have one major distribution channel most of those niche brands don’t: outside of its own cafes and website, the beans will only be available in Whole Foods. -Fortune
It pays to know people, and TOMS brand awareness combined with their existing distribution channels may give them a running start. With over 2 million social media followers and a loyal fan base, those who support the TOMS model of one for one giving may find the coffee attractive, even more so if the product tastes good.
In an interview with Fortune, Mycoskie talks about wanting their new cafés to feel more like someone’s home that can become community centers where people can bring their dogs, have a coffee (and buy shoes and glasses). Although they see the “third wave” coffee shops as their target market, they admit they will fall somewhere between Starbucks and Stumptown, offering a less intimidating atmosphere.
The TOMS Roasting Co sweet spot is high quality beans (single-origin, free-trade) at a lower price ($12.99 per 12-oz. bag compared with $16 to $18 for cult coffee brands). Rachel Halliburton, the TOMS marketer who led “project burlap,” says the hope is to play somewhere between Starbucks and Stumptown. “I’m intimidated to walk into Intelligentsia,” she says. “We want you to feel okay about walking in and saying, ‘I just want a cup of coffee, and yes, I’m going to put sugar in it.’” –Fortune
I find it curious that TOMS will sell its “high quality” coffee at up to 25% less than other specialty companies. Does this mean they will pay the farmers less only to offset those lower prices by giving water? On a certain level I truly admire TOMS and how they’ve changed the conversation of corporate responsibility, however my primary critique of business models like theirs is that they rely on the “westerner as savior” mentality instead of paying someone the true value of their product, allowing communities to build their own infrastructure. Instead of empowering a community, TOMS comes across more like a foreign hero giving things to those deemed in need.
I believe this new venture from TOMS has all the potential to be quite successful. With over a year of planning, it seems like the company has done its research and remains humble about entering a market they have no experience in. If they can provide a quality product that creates a stepping stone between the likes of Starbucks and other specialty coffee companies, I see this as a benefit to the entire industry, further validating the widespread appeal of better coffee. If however, simply adopts the marketing language and design cues of specialty coffee to market a mediocre product, it won’t be much of a surprise. Keep it real Mycoskie.