8 O'CLOCK'S BIRTHDAY SALE STIRS UP CATEGORY AT A&P

RICHARD TURCSIK

MONTVALE, N.J. -- A&P here used a 135th anniversary sale on its Eight O'Clock coffee to help turn the tide on sluggish category volume.

"The sale was extremely successful, and [Eight O'Clock] is so much the benchmark of A&P," Paul Gallant, president of Eight O'Clock Coffee/Compass Foods, a division of A&P, told SN.

Gallant declined to release actual sales figures, but said A&P used the coffee sale as a promotional draw in the stores because of its strong consumer franchise, and received a "very good" reaction.

The promotion included special advertising and in-store displays. In New Jersey, A&P used a full-page pullout of its weekly circular to advertise the sale.

"We had endcap displays in the stores with most of the varieties there -- French Roast, Decaf, the New Balanced Blend, which is half gourmet and half regular. It was a real focal point," he said.

Gallant noted that A&P's sales of coffee overall had been soft since earlier this year, when damage from major frosts in the bean-growing regions of Brazil caused prices to double almost overnight.

"Coffee sales have slowed down tremendously. It is like sticker shock for the consumers. So, we thought it a very opportune time to use this very famous private label, which has now become a national brand, to stir interest in coffee sales," he said.

"Once you break a certain price point, you lose customers. We've found that our customers who were buying the 39-ounce size at the prefrost price of $4.99 are now buying the smaller packages, now that the 39-ounce size is $9.99. We are probably selling the same amount of packages, but the consumers are sizing down. If you are on a fixed budget, $10 is a lot for coffee," he said.

Gallant added that Eight O'Clock's sales haven't been affected as much as some national brands', because Eight O'Clock is "a blue-collar gourmet that allows people that don't have a big budget to buy 100% arabica bean coffee, and grind it at home and enjoy all the taste of a more expensive coffee at a supermarket price."

He also said part of the responsibility for consumers' sticker shock following the freeze rests with the coffee roasters' previous pricing.

"It is not healthy to have the coffee too high, and it is not healthy to have the coffee too cheap," he said. "Coffee has always stayed at 1960s pricing. Prefrost, you could still buy coffee at under $1 on feature. It is unfortunate that the coffee industry didn't follow the rest of the food industry. I think a higher median price would help the industry."

The Eight O'Clock coffee items featured in the sale were 100% Colombian, priced at $3.49 for a 13-ounce bag; ground, $2.49, 7-8-ounce bag; whole bean, $1.99, 12-13-ounce bag; Roaster's Choice Plus, $1.69; Royale coffee $3.99, 12-ounce bag, and instant coffee, $2.49, 4-ounce jar. Bokar coffee was $2.99 a bag.

The sale ran first in Metro New York/New Jersey, Michigan and Baltimore in late September. In Michigan they sell a lot of 39-ounce, and the emphasis was on the large size. In New York they sell a lot of 13-ounce, so the emphasis was on that size. All of our divisions will run it and do some type of feature, but not necessarily in the same week," Gallant said.

Coincidentally, the sale broke just as the October issue of Consumer Reports hit the newsstands, and rated Eight O'Clock 100% Colombian coffee as the best coffee in the U.S., which helped increase sales even more, Gallant said.

The executive said Eight O'Clock coffee is a powerful brand for the chain. "Over the years we have done exit interviews and found that one of the primary reasons people shop A&P is because of the coffee. It is a very valued brand and truly a drawing card. We even offer it to other retailers in markets where we don't have a strong store base," Gallant said.