MILLSTONE COFFEE, CUB FOODS UNITS STIR UP SALES WITH GRINDER OFFER

RICHARD TURCSIK

LITHIA SPRINGS, Ga. -- Cub Foods Georgia division here is perking up its coffee sales by teaming with Millstone Coffee in a promotion offering shoppers a free home grinder with the purchase of Millstone whole bean coffees.

Shoppers who purchase five 12-ounce bags of Millstone during June and July are eligible to receive the grinder, valued at $19.99. Consumers send their receipts, along with a form available in the store and a check or money order for $3.50 shipping and handling, to an Atlanta address. Shoppers who already own a grinder could elect to order two 12-ounce bags of coffee. Cub Foods retails the bags for $6.98.

Tim Henning, director of sales and marketing at Cub Foods, told SN the promotion developed after Cub officials discussed ways to build sales of popular branded products.

"Whole bean coffees are more profitable for the manufacturers as well as for the retailers. It was one of those joint promotions that we talked about doing," he said.

Henning said Cub Foods

heavily promoted the giveaway in its weekly circular, and in-store through displays, which helped to build interest and sales.

"When we kicked it off we repeated the offer in our weekly newspaper insert that has around one million circulation. We also had fliers and the coffee mills on display in-store, right next to the bulk coffee. The free grinders could not be picked up in the store, but we had grinders located next to the coffee display in the store with a sign saying, 'This grinder can be free with the purchase of five 12-ounce packages,' " Henning said. Cub Foods also sells the grinders.

Henning said Cub has carried the Millstone line for several years, and business has been increasing annually. The chain's 13 stores merchandise Millstone at eye level in the coffee aisle, while the canned coffees are placed below.

C.J. Nielsen, director of marketing at Everett, Wash.-based Millstone, said Millstone finds the coffee grinder promotions to be effective sales building tools.

Aside from its current promotion with Cub Foods, Millstone has done two similar promotions with Harris Teeter, Charlotte, N.C. In March 1994 Harris Teeter featured a home grinder and in February 1995 a storage canister was the premium.

"In our initial promotion, 80% of the redemption was by consumers who went in and bought all five of the required products at once. This is outstanding. Normally in our business, with a freshness-based product, people tend to buy what they need. This looks like people were pooling their resources and going in on it [as a group]," she said, adding that results from this year's Harris Teeter promotion are still being tabulated.

Nielsen said the use of premiums instead of price reductions is key to helping whole bean gourmet coffee maintain its rather upscale status.

"You don't want to see the coffee category get into pricing wars. You want to see it sold on the merits of its quality. I think offering incentives to the consumer is just very smart marketing," she said, adding that Millstone hopes to create similar promotions with other retailers across the country.