Galle notes that when Melitta rolls out its new gourmet brands, Melitta finally will give consumers a choice between ground and whole bean coffee. Until now, Melitta has sold only ground coffee – a tradition that might undercut the company’s efforts to project a gourmet image. “The fact that Melitta has historically sold only canned coffee may actually be a liability,” says Galle.
Whether Melitta can succeed in recasting its image in the U.S. may hinge on its fledgling Coffee World chain. “We’ve always sold our product through supermarkets and other retailers,” says Radtke. “But we finally realized we have to be in coffee shops because that’s where people experiment a bit. We’re opening coffee shops to build our core business.”
Most of the 13 existing Coffee World shops are in shopping malls and hotels; one of them is located at the student center of the University of South Florida in Tampa. This month, Melitta is planning to open its 14th Coffee World shop, in an Orlando shopping center. “For the chain to be a success, we have to have a critical mass of at least 50 stores,” Radtke says. “Our target is 100 to 200 within the next 15 to 18 months.”
In addition to opening company-owned Coffee World outlets, Melitta would like to form partnerships with existing coffee shops, then stock them exclusively with Melitta coffee and related products.
Given the large number of independently owned coffee shops in the U.S., Radtke sees plenty of opportunities to build a large chain to compete with Starbucks at the retail level.
“You’ve got Starbucks, with nearly 1,000 stores, then there’s nothing,” he says. “We can consolidate the small shops through partnerships and offer the credibility of our brand name.”
Coffee filters are the primary paper products of Melitta North America, but it plans to add a side business. Following the example of its parent company, which manufactures and markets the best-selling vacuum cleaner bags in Europe, Melitta will begin making bags for the U.S. market by mid-1997.
The bags, to be sold under the Swirl label used in Europe, will be produced at Melitta’s plant in Clearwater, where it makes filters. The company is expanding the plant and buying new equipment for a business expected to post $8 million to $9 million in annual revenues.
“It’s just another strategic business field for us,” says H.-Helmut Radtke, president and CEO of Melitta North America. “In Europe, Melitta has built this into a considerable business, making virtually all of the coasters and most of the napkins used on the Continent.”
Melitta moved its coffee filter plant from Cherry Hill, N.J., to Clearwater in 1994, along with its headquarters. “We wanted a low-cost production area,” Radtke says. “Florida was perfect because it’s a right-to-work state and taxes are considerably lower here.”
But the move took its toll. “Some people, especially the women, didn’t like Florida and they returned north,” Radtke says. “We lost a lot of know-how when we relocated; it was more difficult than we expected to find skilled workers.”
Now, however, the company seems to be settled in Clearwater. Melitta built a 42,000-square-foot complex for its headquarters and the filter manufacturing operation, which employ 100. In January, a 59,000-square-foot addition will house facilities for the production of vacuum cleaner bags, creating 50 more jobs.