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Last Updated: 04/02/2026
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720 Northern Blvd, Brookville, NY, USA
11-50
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ABSTRACT Postum is a trademark and trade secret of Eliza's Quest Food, a North Carolina, U.S., LLC. First launched in 1895 as a non-caffeinated coffee alternative by Postum Cereal Company, the formulation was created by C.W. Post and later sold to General Foods in 1929. In 2007, the brand was discontinued when Kraft acquired Postum from General Foods. Postum lovers responded with a "passionate campaign to bring back our Postum using online petitions, blogs, and websites to gain support. Their voices were heard" (Postum.com). In 2012, the coffee substitute, Postum, was purchased by Eliza's Quest Foods, owned by two long-time Postum users. Postum's modest suite of products includes an instant, powdered grain format in three flavors: original (roasted wheat bran, wheat, and molasses), coffee-flavored, and cocoa-flavored. The brand is marketed using the following claims: organic, fairly traded, vegan, kosher, all-natural, and fair traded. The product is offered in seven- and eight-ounce jars and can be consumed warm or chilled. Postum may have benefited early from first-mover status. However, it has declined in revenue from the latest available Nielsen measure, $6.6 million in 1995, to $900 thousand in 2016 (Buzzfile). Postum has since been flanked by a phalanx of large and small natural beverage competitors, non-caffeinated herbal teas, and the high-growth ready to drink (RTD) coffee market, promoting a myriad of better-for-you beverage options. Postum must make a strategic decision. Should the company invest in Research and Development and launch new products and brands into a larger, growing, and more lucrative market or stay positioned in the coffee substitute market by taking the costs out of their value chain to become the low-cost provider? Keywords: coffee substitute, all-natural, ready-to-drink, better-for-you, strategic options. Copyright statement: Authors retain the copyright to the manuscripts published in AABRI journals. Please see the AABRI Copyright Policy at http://www.aabri.com/copyright.html.INTRODUCTION Eliza's Quest Food is a privately-held company with six employees. It is owned and managed by June Rust, President, and Dayle Rust, two long-time Postum users who grew up with the brand and appreciate the emotional connection Postum has with its loyal base. June Rust has a Master of Arts in Education from East Carolina University. A VP with a vast retail and food service sales background was recently hired. A 2,530-square-foot facility modernization has been completed in anticipation of growth due to approved applicant distribution of the points for new distribution points and favorable shelf placement. Since 2012, the management team at Eliza's Quest Foods has worked to develop packaging, warehousing, and shipping, as well as directly selling/distributing Postum to distribution companies, individual grocery stores, and health food stores, managing online sales to individual consumers. In 2017, Postum leadership worked with Long Island University Post and LIU IQ Consulting's student consulting team to develop a marketing plan. LIU IQ promotes advancing business knowledge and judgment among preeminent students, companies, and universities. The students benefit from exposure to professional business cases. Companies benefit from divergent thinking, dynamic problem solving, and an opportunity for new talent hiring. The final presentation from the team of students was well received by Postum leadership; it included recommendations for further distribution, a new product, packaging and labeling, marketing, advertising, and social media. THE COFFEE SUBSTITUTE MARKET The coffee substitute market was $7.5 million in 1995 (Elliot, 1995). Nielsen further reported that Postum had a significant 87.7% share of the coffee substitute market 52 weeks ending 12/10/1995. The advertising agency, Foote Cone Belding/Leber Katz Partners, General Foods/Kraft agency of record, was charged with creating the Postum comeback campaign delivering print, radio, recipes, and coupons to targeted consumers 55+ using the "truly soothing hot beverage" campaign. The year-long campaign reportedly represented $984 thousand (Elliott, 1995). The competitive set in the coffee substitute market consists of Postum, Capomo, Ayurvedic Roast, Roma, Cafix, Pero, Beyond Coffee, Inka, and Teeccino, as ranked on AAmazon.com's"The 10 Best Coffee Substitutes" (Dvoretz, 2017). THE INSTANT COFFEE MARKET A growth market to examine is instant coffee. Postum fits into the instant coffee arena because it can be served instantly and is agglomerated. |
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Learning Objectives
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This case focuses on evaluating strategic growth options for a legacy brand operating in a declining niche market. Students will develop skills in market analysis, competitive strategy, and brand repositioning while determining whether Postum should pursue cost leadership or differentiation to drive future growth.
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