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Issue Date: Vol. 45, No. 2, February 2005, Posted On: 2/16/2005


Breaking Out


Tim Sanford
Editor@vendingtimes.net

The swift growth of single-cup coffee brewers over the past few years may have implications for operators of full-sized vending equipment too.

Vendors and coffee service operators long have known that they address two sets of customers, decision-makers and end-users. In the blue-collar industrial workplaces that engendered full-line vending, the decision-makers seldom used the service. And studies by the old National Coffee Service Association and others found that the majority of decision-makers in offices were not coffee drinkers.

Those two clienteles had different value systems. Factory workers prized good coffee, but their price expectations were based on buying in bulk in the supermarket. The price of coffee often was written into union contracts. Managers inclined to choose the operator who promised the highest commission. This did not favor promoting vending machines as a better way to make coffee.

When office coffee service came along in the mid-1960s,  the coffee usually was provided free to employees. Decision-makers often saw their job as finding the operator who would supply an acceptable product at the lowest cost. And many end-users did not have high expectations of quality. Observers at the time contended that the widespread use of percolators at home was reducing per-capita consumption.

But the vending and coffee service industries laid the groundwork for the resurgence in quality demand. Whole-bean vending equipment was introduced in the early 1980s. At about the same time, OCS leaders began exploring ways to brew into insulated servers so the beverage would not degrade over heat. They also worked with the International Coffee Organization to establish the Coffee Development Group. The CDG campus coffee house program exposed young consumers to premium coffees in college, and those youngsters entered the away-from-home market just when Starbucks began rolling out its stores.

Fresh-brew coffee venders share with espresso machines the distinction of being the only systems that prepare coffee fresh, one cup at a time. They  inspired the bulk loading and "pod" single-cup countertop designs that are receiving so much attention. Today's consumers, unlike many in the '60s, like machines that give them good service. The coffee vender should be positioned to start collecting the dividend on decades of time, effort and creativity invested in it.

Unfortunately, many veteran vending operators have learned the lesson of the 1960s too well, and don't think consumers will pay a fair price for "vended coffee," however good it may be. They reason that, since the price has to be kept low, high traffic is needed to support the machine.

A few cents more in product cost, not only for the best coffee but also for a sturdy, comfortable cup and an excellent soluble dairy-based creamer, should warrant a price commensurate with the quality of the product. And, if people like it, they'll buy it more often. Thus, a smaller customer base could be served profitably, and it need not be in a factory.

What's needed is market testing supported by effective consumer promotion. There's no reason for vendors not to share in the current quality-coffee boom.

Topic: Editorial: Vending

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