Mug Shots
Sizing Up Thermal Containers
By Nick Obourn
Illustration by Amanda Wilson


One of the most important aspects of building a house is making sure it insulates well. This involves an understanding of thermodynamics: the study of energy change. Heat travels from areas of high temperature to areas of low temperature, and therefore, preventing household heat loss or intrusion often involves padding the interstices of the house's walls with one of a variety of substances, blankets of fiberglass, blown-in insulation, reflective insulation, rigid insulation, or foamed-in-place insulation. Now imagine lifting the roof from your house and pouring in a massive pot of hot coffee, soaking the couches, lifting the paintings from the walls, tipping plants, and filling it to the brim. Then put the roof back on. How long can your house keep that coffee hot? By pouring that analogous pot of coffee, you have unwittingly entered the world of thermal mugs and tumblers.

Mug Shots
The thermal mug and tumbler industry has a thermodynamic advantage that the construction industry will never be able to duplicate. The vacuum seal, which has become the standard for insulation in the thermal mug industry, is not replicated on your everyday house (unless one constructed an airtight house). And it provides, perhaps, the most effective means to keep hot liquids hot and cool liquids cool for sustained periods of time. "When you're looking at insulation on anything, there's pretty much three techniques: one: single wall, that doesn't really do much; two: double wall, that's just like a house. You put one wall on the inside and one wall on the outside and insulation in between," says Matt Fildes, product development manager for Wilsonville, Ore.-based Pacific Cornetta. "And the third technique is vacuum insulation. Vacuum insulation means there's nothing in between the two walls. There's no way for heat to move between the inside and the outside." The first vacuum-sealed container (also called a vacuum flask or a dewar) arrived on the market about one hundred years ago. When it comes to insulation, the design hasn't yet been topped, only refined.
   The vacuum seal can be created in different ways, but for a coffeehouse retailer, the underlying theme should be the quality of the mug. "What you should look for in a high-quality product is high-quality workmanship," says Fildes. "For example, with our product, we run our thermoses through a high-temperature furnace to create a solid weld all around the vacuum seal. The high temperature furnace burns the air out of the chamber. At that instant, it melts the solder and seals the plate." Another method utilized by companies is inserting a brass tube between the two walls of the thermal mug, pumping the air out of the tube, twisting the brass pipe to close off the air hole, and then sealing it with glue.    As companies add their own design touches and attempt to expand on the methods to vacuum-seal the mug or tumbler, it represents a strong resale item for every coffeehouse retailer, an item that can only benefit coffeehouse owners interested in expanding their options, customer base and customer loyalty. "Coffeehouses get into the coffee mug business [to] generate incremental profit," says Jacqui Cintron, vice president of marketing at Newport Beach, Calif.-based DrinkWorks!.

Measure Twice, Cut Once
Before hastily picking up the phone to order an aircraft carrier full of profit-boosting thermal mugs, there is some initial planning that needs to occur.
   Many mug companies manufacture their mugs differently. Almost all mugs are put together in China or neighboring Asian countries, but the steps taken from the manufacturer to the customers' hands can vary greatly. Some companies customize their mugs; they design them in-house and have them made overseas. These companies often offer the widest range of styles and colors, but can be more expensive for a coffeehouse owner to purchase. On the other side of the coin are companies that order blank mugs that have been manufactured for a mass market rather than customized for a thermal mug company. These companies then place their company name or logo on the mug or do custom screen printing for customers who are looking to complete a brand identity. "Some companies specialize in screen printing mugs. So they are purchasing [blank mugs] from a manufacturer," says Fildes. The type of mug you would like to adorn your coffeehouse depends in some ways upon your taste as a retailer and your customers' tastes. The size of your establishment, market demographic and amount of sales should all be taken into consideration when deciding on a thermal mug company from which to purchase. Some companies make it easier and offer both types of mugs, custom and blank mugs. "We do both," says Dustin Rgnonti, coffee sales director for Rosemount, Minn.-based Webb Company. "We order what I call 'stock' mugs, but we also have our own patented designs, where we actually design the product and have it made overseas." Some retailers like the idea of offering one type of mug in several colors to convey a sense of uniformity. Others might like to offer their customers a motley crew of mugs, with differing shapes, sizes, materials and colors, allowing their customers to choose what fits them best.
   Not only is catering to your customers' tastes important, fitting a line of thermal mugs and tumblers into your own coffeehouse is paramount. No retailer wants any accessory to be the square peg in an otherwise round coffeehouse hole. "There's a concept called mass customization," says Fildes. "It's about finding the color and the style that fits your store." Examine the overall effect of your coffeehouse, the ambiance, the impression one gets when entering. You might even want to ask a customer or a non-partisan party about the atmosphere. After all, at times it can be difficult to see the forest for the trees. When a customer walks into a coffeehouse that has been thought-out and well planned, from the layout down to the thermal mug, it reflects well on the owner. This follows along the same line as choosing quality products to carry. There is a plethora of options from which to choose when it comes to the outside of a thermal mug or tumbler, and luckily for the overwhelmed coffeehouse owner, they tend to align with the current trends in the industry. Stainless steel, acrylic and even porcelain outer shells are all viable options for profit gain.
   Taking stock of available space in your coffeehouse is also important for ordering thermal mugs. "Be very aware of your storage capacity when ordering," says Jennifer Loring, sales and marketing director for Circle Pines, Minn.-based Concepts Plus. Thermal mug and tumbler companies often have minimum orders that they ask coffeehouse retailers to meet. "We have to have a minimum just to set it up and run it," says Rgnonti. "It is really kind of a break-even point." These minimum orders can vary greatly depending on the company. "In our company [Concepts Plus], we have [a] very low 36-piece minimum order," says Loring. Pacific Cornetta sets its minimum order, with branding, at 48 pieces. "We like to give people the opportunity, if they are small, to do the branding," says Kerrie Allen, marketing manager for Pacific Cornetta. "I know a lot of coffee shops as well as other small retailers we deal with, their stock rooms just aren't that big or their shelf space isn't that big." Webb Company prides itself on having the lowest minimum order requirements in the industry: 25, including one-color screen printing. "Usually customers will go with five mugs of five different colors," says Rgnonti. Other companies, such as DrinkWorks!, set the minimum order at 2000 to 2500 pieces. Clearly, 2500 thermal mugs are not ideal for a small coffeehouse, but this quantity works well for larger chains. So as a coffeehouse owner, cognizance of your storage space and any plans to expand all fit into thermal mug ordering.

Connecting the Dots
   The thermal mug is an opportunity for many to accessorize or amend their look. For many, it is an extension of one's personality. This means in order to sell thermal mugs and tumblers successfully, coffeehouse owners must have their fingers on the pulse of trends in the industry, be aware of their coffeehouse's ambiance and understand the intricacies of their customers' personal styles and needs. Luckily, it is not solely on the coffeehouse owners' shoulders to decide who their thermal mug demographic is. Coffeehouse owners should be aware of their clientele: who their customers are, where their tastes lie, and how their personalities and lifestyles influence what they like, in thermal mugs or anything else. But in the thermal mug industry as a whole, the distributing companies are also keeping tabs on customers, asking them what they want in a thermal mug or tumbler, and tracking trends. "What we are really seeing as a trend is a shift from acrylic or even plastic double-walled mugs to acrylic/stainless combinations and even stainless/stainless across the board," says Cintron. "Starbucks has done a tremendous [job] helping people understand the value of high-quality looking mugs," says Cintron. DrinkWorks! also completed a market research study in which it surveyed customers who purchased coffee outside of their homes. "[We had] them come in and tell us about what they liked or disliked about the current mugs that were available," says Cintron. "Then we actually brought in designers and had them sketch what their perfect mug would look like." The result of this focus group was two new mugs, Steele (which won a Best New Product Award at the Specialty Coffee Association of America's Annual Conference & Exhibition in Atlanta, Ga. this year) and Eclipse, one male-oriented, the latter female-oriented. Trends also emerged from the study. "There were two very distinct personalities that came out from the drawing. There was this group, I call them the 'aspirationals.' It could be said that the mug is reflective of your image. So they were this whole image-driven group," says Cintron. "And then there was what I called the 'traditionalists,' who represented a good cup of coffee, a solid day's work." Such studies can help the thermal mug industry and the coffeehouse retailer business alike. When a coffeehouse supplied by a thermal mug company does well, so does the thermal mug company supplying it.
   No matter what kind of customers walk in your door, whether they are 'aspirationals' or 'traditionalists,' mugs are a perfect conduit through which to carry out loyalty programs. A thermal mug is a permanent item that travels with your customers throughout the day. It commutes to work with them in the car, waits on their desk all day, gets packed for camping trips, sits lookout on road trips. The thermal mug is the perfect way to remind your customers exactly where their coffee came from and why they got it at your coffeehouse. This is why creating incentives based around thermal mugs and branding can create a steady customer base. Many coffeehouses will offer their customers a certain discount on a cup of coffee if they bring their thermal mug in with them. This discount is often calculated by a coffeehouse owner by figuring the cost lost on the coffee sold against the profit gained from returning customers and thermal mug sales. Coffeehouses will also offer their customers a free cup of coffee with the purchase of a thermal mug or tumbler. When it comes to thermal mug promotions, being inventive will always win you more customers. "Loyalty programs pretty much run full-spectrum, from your basic punch card that allows customers to buy 10 and get a free mug or refill, to a rechargeable coffee card that gives discounts on purchases and enrolls the customer in special promotional mailings," says Loring. So be imaginative and custom tailor your loyalty programs for thermal mugs.
   As these customers walk the streets with your coffeehouse's thermal mug, branding becomes essential. "With a mug, [coffeehouses] can put their name on it; they build brand equity; they build awareness of their name, their store location," says Allen. Putting your coffeehouse's name and logo on your mugs is free, 'round-the-clock advertising for your business. And it is a constant reminder where your customers fill their cups. When it comes to branding, there are several options for retailers. Screen printing is the most common and usually the most economical (most companies include screen printing and logo or name with the cost of a minimum order), but the options can be as varied as the combinations of materials onto which they are applied. "Our main process is a rotary screen print," says Rgnonti. "We also have some other options. We do some laser engraving if they want them personalized. We also sandblast if they want an upscale look, a tone-on-tone look. We are also getting into four-color-process heat transfers." Intuitively, the more complicated the procedure, the more expensive it gets. Therefore, brand identity does come at a cost to the retailer, but it is up to the retailer what that cost should be.
   After the deliberation and planning, you finally found a mug company that best suits your needs; you ordered the appropriate number for your space, and one question remains: How much to charge? "Most of them keystone it, and they just double the price from what I've seen. That varies of course from coffee shop to coffee shop," says Rgnonti. Doubling the wholesale purchasing price is common practice among coffeehouse retailers. Of course, location, the size of your company, the amount you sell, and many other factors all play into the mark-up. But doubling the cost is a strong starting point for incremental sales.
   Coffeehouse ownership is full of experiments and adventures, but certain supplemental items like thermal mugs and tumblers can smooth the road, and help you sidestep the potholes on the way to the golden period, where customers enter consistently, feel comfortable and order quality specialty drinks. And when they do exit the warm embrace of your coffeehouse and wade their way into the world at large, the trusty thermal mug they clasp, labeled with your name, will remind them to return soon.

Nick Obourn is the associate editor of Fresh Cup. He can be reached at nick@freshcup.com.