McCullagh Coffee Roasters
Revenue Growth Through New Product Development
Warren Emblidge, III, President
It was very helpful to have someone on our team with experience in the many, many details of a major new product introduction. It kept us moving forward, and avoided wasted efforts.
Founded in 1867, McCullagh Coffee is a family-owned roaster, grinder, blender and packager of coffee and provider of hot beverage products to institutional, restaurant, commercial and retail accounts. They are also a regional coffee service provider. Located in Buffalo, NY, McCullagh sells its products and services locally and nationally.
The patent for the K-Cup, a small single-serve fresh coffee-making product, had recently expired. Keurig Green Mountain, the patent holder, had over $4 billion in annual sales based on the K-Cup, and dominated the market and distribution channels. The question at McCullagh was whether it should make a substantial financial and manpower investment in manufacturing and selling K-Cups. Could they generate enough revenue and profit to justify the investment? What was the appropriate equipment? What should the initial offering look like? Who were the best customers? How should the product be distributed?
When there is a significant shift in the market, there are many unknowns making decision-making less certain. McCullagh tapped Insyte’s new product marketing expertise for an outside perspective and a framework for making those decisions.
Each of the major questions were identified and systematically explored. Market size and trends were analyzed. Channels, products, and services were defined and prioritized. A detailed product rollout plan was outlined. Conservative sales scenarios and return on investment analyses were developed from the plan. McCullagh ultimately introduced a number of K-Cup products, including hot cocoa and several coffee products, with names such as Dark and Stormy, Breakfast Blend, and Donut Shop which quickly reached 10% of McCullagh’s sales.
Seven new products have been introduced, with more planned as sales grow.
K-Cup sales have increased to 10% of sales, and still growing.
The K-Cup product is attracting new customers & business opportunities each month.