Coffee Service

COVID-19: Just another one of the ‘ups and downs’ for veteran OCS operator

Now in his 51st year in business, Charlie Ray has learned that a beverage service operator needs to be a consummate student of dispensing technology. COVID-19 has been a challenge, but recovery, he says, is on the horizon.

Charlie Ray and route manager Christine Carson have high hopes for a Jofemar countertop brewer for larger accounts.

March 17, 2021 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

Charlie Ray, who entered his 51st year in coffee service this year, doesn't let setbacks get him down. Not even COVID-19, which sent his pre-COVID $40,000 monthly sales to $8,400 this past January.

As the owner of Ray Coffee Service in Savannah, Georgia, setbacks are part of the business. And every time a setback presents itself, Ray finds a way to overcome it.

From the beginning, Ray has been a consummate student of refreshment services equipment. New innovations have allowed him to meet every challenge that comes his way.

Remember Breakmate?

The 1990s saw the demise of the once popular Coca-Cola Breakmate machine, a tabletop self-service soda vending machine. The Coca-Cola bottlers became more interested in supporting 20-ounce bottle machines than the 7-fluid-ounce countertop machines that were highly profitable for Breakmate operators like Ray.

Single-cup cold beverage vending never recovered, but for coffee service operators the single-cup coffee revolution, led by Keurig in the late 1990s, more than made up for it.

That glory, however, was short lived for many. When Green Mountain Coffee Roasters Inc., the nation's leading provider of coffee cartridges for single-cup systems, made a push into the consumer market, many OCS operators like Ray found the Green Mountain Keurig K-Cup, the industry leading single-cup product, less profitable.

"It just killed it," Ray said. "They (customers) can get K-Cups at Sam's for the same price we pay for them."

Ray Coffee Service associate Janet Hess checks on a Massimo portion pack brewer.

Single-cup profitability challenge

In 2010, the Tassimo Professional, a portion pack system that only used proprietary portion packs, offered the OCS operator more control over the portion pack pricing. For Ray, the Tassimo Professional offered a profitable alternative to Keurig.

While the Tassimo Professional delivered a good cup of coffee and met customer expectations, the machines were complicated and had a lot of parts. Over time, the cost of the repairs became a concern for Ray.

Fortunately, Massimo Zanetti Beverage introduced a cartridge-based, portion pack system that was economical, has fewer parts than the Tassimo and provided a good quality product.

"It's a much simpler machine" compared to both the Tassimo and the Keurig, Ray said.

Customers liked the Massimo machine. Ray sold seven in one day to one of his largest customers.

Ray was back in the saddle. There were days when he did $10,000 in sales. "We were buying 400 to 600 cases a month," he said.

COVID-19 strikes

Then came COVID-19. His largest account, an industrial customer that comprised most of his business, closed its doors.

"It's really tough times," said Ray. "We've got a lot of coffee in the warehouse that we can't do anything with."

His hopes rose in December when his big industrial customer began calling people back to work, only to re-send them home again shortly thereafter.

Progress has since been slow, but Ray hasn't given up hope.

He's managed to keep his route manager, Christine Carson, busy five hours a day servicing a handful of locations consisting of car dealerships, law firms and warehouses.

While his big industrial account has not yet reopened, several of his smaller accounts are becoming more active. He did $10,000 in sales in February, which marked an improvement over January.

"We're hoping that in March things are going to start to pick up," he said.

He's also used the downtime to bone up on refreshment service technology, which gives reason for optimism.

Equipment keeps progressing

Ray has high hopes for the Jofemar G23 countertop brewer with bean grinder for larger locations as an alternative to the Massimo brewer. He currently has two G23s at car dealerships that are doing about $500 per month in sales. The G23s are easy for the customer to use, unlike some of the other single-cup systems Ray has tried.

"People would come up and look at the machine and walk away because they didn't know how to operate it," he said. "With the G23, you just push one button. That's all you have to do." There are no cup size and coffee strength selections.

Even the Massimo Professional, with its portion pack, is too complicated for some car dealership customers, according to Ray. In addition, they are not coin operated.

"That's going to be our machine of choice now," he said, for locations that can justify the higher priced G23. "The machine is a really, really nice machine. It makes great coffee, and the folks are so nice to deal with."

The G23 costs $3,700 compared to the Massimo at $500.

He also plans to equip the G23s with Nayax cashless readers due to customer preference for mobile payment.

Ray had used cashless readers on brewers in the past for his larger coffee brewers, but the G23 is the first countertop with a cashless reader. Many of his older brewers were not compatible with cashless readers.

"If you don't have the ability on your machines to accept phones, you're running behind the times," he said. "You're running behind times if you don't have a credit card reader that will accept all these different systems."

"I like their reporting system and the way that they operate," he said for Nayax. "There will never be a new machine in here without one."

Meanwhile, he hasn't given up hope trying to find a self-serve, single-cup post-mix cold drink machine. He is exploring the recently introduced SodaStream Professional from PepsiCo Inc.

With the SodaStream Professional, customers can choose from carbonation levels and temperatures to create the perfect drink. They can also record their favorite drink combinations and set hydration goals and track how many plastic bottles they've saved to date, all through a mobile app.

"I've looked at all kinds of alternatives," Ray said, reflecting on the Coca-Cola Breakmate that is no longer readily available. "Post-mix (single-cup beverage machines) is the most fabulous business you could ever think of. It's a license to steal."

One thing he has learned is that a beverage service operator needs to be a consummate student of dispensing technology.

For an update on how the coronavirus pandemic has affected convenience services, click here.

Photos courtesy of Ray Coffee Service.

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