Bean-To-Cup Gains On Portion-Packs In Offices

by Kevin Daw
Posted On: 5/15/2019

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Many years ago, during an industry trade show a pleasant woman stopped at our booth and told us she had a gentleman with her who had invented a new brewing concept, and someone had suggested they show it to us, and would we mind taking a minute to evaluate it?

Always open to new ideas, we engaged the gentleman. He showed us a silver tube, appearing very much like a miniature tube of toothpaste. He went on to explain how a needle would penetrate one end, inject water into the chamber which held coffee grounds, and the other end would open via contact with the water and, thanks to a small filter, allow brewed coffee to be dispensed.

We found it a brilliant and very novel idea, and eagerly asked where he saw the price-point ending up. His estimate of a wholesale unit cost in the mid-20¢'s took us aback and we queried further, all the while pointing out that at the time, open-brewed coffee, whether batch brewed or single cup, ran 5¢ a cup wholesale. He was looking for investors, and we couldn't get past such a large premium just to offer people one cup at a time when there were already several options to do so.

His device allowed for unlimited variety and, with flavored coffees at their peak (we also offered many origin varietals, but their ascension to mainstream had yet to occur), this held great appeal – but the prospect of convincing operators that the public would be happy to pay five times as much for more personal choice was daunting at best.

We declined, and what was to become Flavia was taken on by a great non-coffee company. An epic battle ensued when a different inventor implemented  the same concept through a different delivery mechanism, a little plastic cup.

These two ideas came to market at relatively the same time, although Flavia had the lead, timewise, as I recall. Two revolutionary ideas in the same industry set the stage for a VHS/Betamax-style struggle for market dominance that lasted years. (For those too young to recall the VHS/Betamax war just Google it: fascinating stuff.) The K-Cup won out, for all intents and purposes, and its gain in market share has been incredible to see.  Though I don't know it as a certainty, it seems that peak sales of K-Cups, at least in our industry, may well have been reached. And there has been a resurgence in recent years of bean-to-cup brewers.

Today's bean-to-cup machines bear very little resemblance to the brewer originally designed by Alan King, who un-ironically called it the Vend King machine. This unit only brewed ground coffee, one selection. It was essentially a miniature coffee vending machine, allowing it to fit into company kitchens, and was very revolutionary. Based out of Montreal, Canada, its greatest penetration was within the local marketplace, making Montreal North America's epicenter of single cup/bean-to-cup brewers. This explains why several great bean-to-cup brewers come from this area.

There are also brewers on the market from elsewhere, all with far greater abilities than ever before,  giving consumers an experience that includes the unprecedented interaction and personal choice so many find appealing.

That advancements in these brewers has been exceptional is not the only reason they have re-emerged as relevant and are leading a renewed one-cup-at-a-time revolution. Bean-to-cup machines owe a huge debt of gratitude to firms like Starbucks and Dunkin Donuts, who through promotion of heavier (read: proper) brew weights have changed the tastes of today's consumer back to where they were before the black frost era weight declines that were forced by all-time highs in the coffee futures market. Bean-to-cup brewers allow greater flexibility in strength of cup, and as cup strength preference changes regionally, this becomes a great advantage over a prepackaged, set-weight cartridge.

The other debt of gratitude goes to the strengthening public mindset of environmental awareness. I was speaking to someone yesterday who conveyed a story that illustrates this very well. They had some young clients come in for a day-long project. They offered the clients coffee in the form prepared by the Keurig brewer that they had on hand. The clients – all four of them – declined, based on their feeling that it was unreasonable to waste that much material just to have one cup of coffee each. It is not an overstatement to say that in the minds of many consumers, single-cartridge coffees, other than properly labeled biodegradable coffee pods, create too much waste, and this is a huge selling-point for bean-to-cup brewers.

There will certainly be room for all players going forward, as bean-to-cup brewers are priced out of smaller offices, and certainly the home market, but their use by larger OCS and foodservice outlets would appear solid and growing, at least until the next invention, as yet unperceivable, comes along!

As always, may your cup runneth over, and the brew be exquisite.

» KEVIN DAW is Head Coffee Buyer for Heritage Coffee Co. (London, ON, Canada), a private-label roaster serving the OCS/Vend, Foodservice, Specialty and Retail industries. A 39-year veteran of OCS, water delivery and vending operations, he has concentrated on coffee roasting for the past three decades.