FOR IMMEDIATE RELEASE CARIBOU COFFEE BREWS ITS WAY TO THE TOP IN ZÓCALO GROUP’S LATEST RECOMMENDATION INDEXSM While Starbucks is Most Talked-about Brand, People are More Likely to Make Recommendation When Talking About Caribou Coffee CHICAGO, Feb. 2, 2012 ― Buying coffee to drink on the go is an American tradition and a $20 billioni ii per-year industry . With more than 75 percent of U.S. adults consuming coffee and more than a million conversations about the category occurring online over a period of 30 days, Zócalo Group’s most recent Recommendation Index uncovered the country’s most recommended coffeehouse chains – and how they got that way. Not surprisingly, Starbucks is the most talked-about coffeehouse chain online. But despite being the leader in online conversation volume, the brand is only recommended in about 1 in 200 conversations – while Caribou Coffee earns a recommendation once in every 20 conversations. Dunkin’ Donuts and McDonald’s follow Caribou in the Recommendation Index rankings of the top 10 largest coffeehouse chains operating in the U.S. “Recommendations drive not only brand perception, but more importantly, purchasing decisions,” said Paul M. Rand, president and CEO of Zócalo Group. “By making the important distinction between a cursory mention and a positive recommendation, we were able to glean more revealing insights about the role that recommendations played within the coffeehouse chain industry.” The Recommendation Index found that top themes associated with positive coffeehouse chain recommendations include product quality and freshness, brand loyalty and brew consistency. Primary drivers of negative word of mouth point to poor product quality, unskilled baristas and brand detractors – all of which further illustrate the value consumers place in great taste and service when choosing where to buy their coffee. "The Recommendation Index illustrates that while a brand’s volume of conversation is important, a high volume doesn’t necessarily increase the likelihood that someone will make a recommendation,” commented Zach Mesenbourg, manager of Zócalo Group's Insights & Analytics Team. "And that scenario is exactly what we saw with Caribou Coffee and Starbucks. While people talked more about Starbucks overall, those who talked about Caribou Coffee were stronger advocates and recommenders.” Recommendation Index Results Unlike standard metrics that ask, “Would you recommend this brand?” the Recommendation Index determines why, where and how often people recommend individual brands. The Index highlights not only the overall conversation volume, but also the level of positive recommendations. 1 The top 10 coffeehouse chains (of those operating in the United States) ranked by conversation volume during a recent 30-day period include: Conversation Volume (# of mentions) 1,018,524 73,977 18,079 15,256 14,176 8,711 6,798 3,646 3,344 1,033 The Recommendation Index also evaluates the percentage of this conversation that is actually a positive recommendation. The top 10 coffeehouse chains (of those operating in the United States) ranked by level of positive recommendation include: Percentage of Conversation with a Postive Recommendation 4.6% 3.7% 2.4% 2.1% 1.9% 1.7% 1.4% 1.4% 1.1% 0.5% In addition, the Recommendation Index provides insight into the positive and negative keywords and/or phrases used to trigger recommendations as well as the drivers of word of mouth. Top drivers of positive recommendations in the coffeehouse chain conversation include: Product Quality & Freshness – good taste, always fresh, and delicious flavor Brand Loyalty – an unconditional affinity for a particular brand Brew Consistency – getting the same good cup of coffee time after time 2 Skilled Baristas – friendly staff that create delicious specialty drinks Physical Location – the best place to hang out, relax, and meet with friends Top drivers of negative recommendations include: Poor Product Quality – bad taste, poor flavor, and old or burnt coffee Unskilled Baristas – staff that often “messes up” drinks Brand Detractors – overall dislike, contempt, or hatred for a particular brand Exaggerated Comparisons – tastes like dirt, tanning oil, and other substances Physical Side Effects – complaints of discomfort associated with the coffee Methodology The Recommendation Index was created by Zócalo Group to understand not only which are the most talkedabout brands across social channels, but also to better understand each brand’s percentage of positive recommendations. For the current Recommendation Index, the study identified the 10 largest national and regional coffeehouse chains (based on sales figures and number of locations in the United States) and then examined online conversations occurring across blogs, forums, Twitter and other discussion venues over a 30-day time period. Online analysis focused on the naturally occurring, organic conversations about those brands and the words consumers used to make explicit recommendations. Key triggers and themes pertaining to both positive and negative recommendations were also examined. To learn more about the Recommendation Index, please visit www.zocalogroup.com. CONTACT: Leah Bassett lbassett@zocalogroup.com 312.596.6304 i The Coffee Marvel Blog, How Big is the Coffee Industry? http://www.coffeemarvel.com/blog/post/2010/05/17/How-Big-is-the-CoffeeIndustry.aspx (May. 17, 2010). ii National Coffee Association, 2011 National Coffee Drinking Trends, http://www.ncausa.org/custom/headlines/headlinedetails.cfm?id=762&returnto=778 (June 28, 2011). 3