Once considered a commodity product, many small boutique coffee companies are luring customers with promises of high quality and unique flavors. How do the processes used by the small companies compare with those of the major coffee processors? Coffee producers purchase green coffee beans, which have been processed through several steps. At the manufacturer, green coffee beans are screened to remove debris, and then roasted. A roaster is typically a rotating drum in which the beans are heated. The length of time spent in the roaster impacts coffee flavor. The longer the time spent in the roaster, the richer the coffee flavor. Following roasting, beans are sprayed with water, cooled, and screened to remove any remaining debris. Once roasted, coffee is ground to the size required for the brewing process and packaged. Ohori’s Coffee is an example of a boutique coffee company. Established in 1984, Ohori’s Coffee is located in Santa Fe, New Mexico. This privately owned business microroasts 32 types of coffee from Africa, the Saudi peninsula, Indonesia, the Pacific Rim, and North and South America. In batch sizes of 30 pounds or less, coffee beans are roasted in natural gas-fired rotating drum roasters carefully monitored by highly skilled “master roasters.” To maintain quality, Ohori’s depends on humans, not computer controls in the roasting process. Online and in its Santa Fe location, Ohori’s sells whole beans and 10 different grinds ranging from Percolator to Turkish style. (Source: http://ohoriscoffee.com.) Founded in 1850, Folgers coffee, produced by the J.M. Smucker Company, has 55% of the U.S. market share in the mainstream retail coffee market. In 2017, Folgers had over $2.1 billion in sales. According the 2017 annual report, innovation is essential to Folgers’ success. Coffee is roasted and packaged in the highly automated J.M. Smucker New Orleans plant which is over 200,000 sq. ft. in size. Green coffee is stored in a large silo at the Port of New Orleans and its only distribution center is in nearby Lacombe, LA. Folgers coffee is produced in four roasts from mild to dark, five types, and seven different packaging forms including the regular canister, instant, and single serve. It also offers multiple flavors. For more information about Folgers products see its Web site (https://www.folgerscoffee.com/).
1. Using the product-process matrix, which processes are likely to be used by Ohori’s and Folgers? Why?
2. Explain how the choice of process supports each organization’s competitive priorities.
3. Is the operations layout likely to be the same or different at Ohori’s and Folgers? Why?
4. What changes would Folgers need to make to compete directly with Ohori’s? Why?
5. What are the benefits and drawback from the lack of automation in Ohori’s coffee roasting process?