Cafe Bustello's Hipster Gamble

In the New York Times this Sunday is an article on Cafe Bustello coffee. This brand’s approach to growth is interesting in that they are approaching a non-traditional market base. Cafe Bustello is experiencing a growth spurt, with many good reasons for this growth. Cafe Bustello is quickly becoming a "Hipster Brand”--meaning that it is being marketed to the affluent and style leaders of the Millennial Generation. We have seen this before from a number of brands: Carthart Clothing, Pabst Blue Ribbon Beer and Hush Puppies to name a few.

Hush Puppies went through a short period of similar growth. This is just enough to bamboozle your marketing and sales projections before the next idea (or fad) is claimed by another company!

The biggest problem for brand growth due to a “hip factor” is that it usually does not match nor extend the core customer base. It begs questions: Do I chase the new audience and hope it stays with the brand long enough to add to the current core customers?...Do I spend money for ads intended to enhance the brand for these new customers, knowing that the current customer base will probably not see these ads or be influenced by them? These are tough decisions, but in Cafe Bustello's case they can't really do either…because a large part of the new target is really the children of the current core customer base!

Advantages for Cafe Bustello's brand are:

• A loved Cuban/American Brand
  
• Available in stores in the urban centers of the Cuban community
  
• Reasonably priced
  
• Unique taste
  
• At the moment, Cuban coffee is a fresher story than Columbian coffee)
  
• Notoriously under-marketed to the mainstream.

Disadvantages of the brand include:

• Approaching a new audience that is notoriously fickle
  
• If marketed as a premium product at a new price point, this will quickly alienate the current core
  
• A lack of funds and market share to compete against the global players in the international and U.S. market
  
• As a result, Cafe Bustello may be left with an alienated core customer base.

Cafe Bustello is taking a smart approach to this particular dilemma by segmenting their audience into two groups. They are introducing new products that come prepackaged (not unlike the Starbucks "Mocha" and "Doubleshot" products") and are only marketing these towards the youth market. The original coffee is being marketed in the traditional way but with a bit of a youthful twist. This keeps the current customer base and also reaches deeper in the Cuban community with a focus on community music and artists. Hopefully this grow their brand awareness and lead to enhanced sales.

The hipsters don’t always drink what grandma drank! Thus, this approach strikes a strong mix with the senior customer base, yet potentially may gain a massive, new, affluent young base. This will be a brand worth watching.