Wednesday, May 24, 2017
Toronto Star brews up new revenue with Headline Coffee

Headline Coffee, the new subscription-based, coffee-delivery service offered by the Toronto Star, is built like a good newspaper: 

 

• We deliver a different coffee every month as a part of a curated and exploratory global journey, just as stories and photos are brought into the homes of our readers, providing them with interesting and relevant local and global news.

 

• We tell the story behind the coffee, investigating its source, growing and processing methods, and the people behind it all.

 

• Our product is ethically sourced because we not only want to ship the best product, we want it to be done fairly for the producers and safely for the environment.

 

• We reach our audience through both print and digital because research tells us our readers are serious coffee drinkers.

 

• We have a trusted relationship with readers and ready-made marketing channels to reach them.
 

 
At the Toronto Star, Headline Coffee is one of many initiatives in the search for new revenue. Each opportunity is assessed on its own merits, but those worthy of further exploration:

 

1. Solve a problem for customers.

2. Effectively leverage our core competencies: Brand power and trust; large audience, strong media; delivery expertise; and subscription management.

3. Are not advertising or content-based revenue.

4. Represent opportunity of significant size.

5. Complement the core business, rather than disrupting or cannibalizing.


A coffee-subscription service was identified while investigating reader behaviour, habits, and trends. We were looking for activities and preferences that distinguished our readers from the general population. At the highest level, we found 70% of 7. Toronto Star readers consumed coffee in the morning while they read their newspaper.

 

Percolating interest: Reader awareness of the newspaper’s coffee-delivery sideline, Headline Coffee, has grown an average of 32% during the first three month since its launch.

 

We then used our reader panels and subscriber surveys to determine more specific coffee-consuming preferences and habits: consumption volume; whole bean vs. ground; roasting preferences, price tolerance, etc. This research led to the conclusion that a significant business opportunity existed.

 

Alternative business models for the creation of the subscription service were then evaluated:
 

1. Third-party partnership: revenue share as a media partner promoting and endorsing another service.

 

2. White label: present the offering as one from the Toronto Star, but have it managed by a vendor.

 

3. Build and manage internally: select vendors to provide products and service, but manage the execution to maintain control.

 

Ultimately we decided to build and manage internally, creating a brand that would resonate with readers and to achieve target profit margins.

 

Implementation was a matter of vendor searching, vetting, negotiating, and selecting. Our volume projections from earlier in the process assisted in bringing initial quotes down to target cost levels.

 

Once the operational requirements were established, we focused on creating an impactful launch plan and engaged an external marketing agency to help spearhead the effort. We leveraged our full range of media properties to maximize message dissemination. We relied heavily on print promotion, knowing these readers had the strongest connection to the Toronto Star brand.

 

During the first few months, messaging focused on: introducing the brand, explaining the benefits and features, exploring the lifestyle of Headline Coffee, and holiday gift giving.

 

One month after its launch, Headline Coffee attained reader awareness of 20%, and during the first three months, an average growth rate of 32%.

 

Moving forward, Headline Coffee is experimenting with new print ad campaigns, creative, and social messaging that will propel it to the next level of growth.

 

 

 

Eric Fleming

Eric Fleming is senior innovation strategist for the Toronto Star, based in Toronto, Ontario. He can be reached at efleming@thestar.ca.

 
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Industry Guest Blogger
 
This guest blog is for an exchange of stories from members of the publishing industry be it a magazine, newsapaper or digital only publisher to help foster change and innovation in the digital age. These stories will inspire the industry with ideas to help the industry prosper and keep it relevant with readers and advertisers. If you will like to contribute your story contact Martin Seto 416-907-6562 or masthead@reflexmediasales.com.
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