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Making A Difference: How OCS And Vending Played A Key Role In U.S. Coffee Consumption Rebound

Posted On: 12/26/2012

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TAGS: coffee brewing trends, coffee consumption history office coffee service, OCS, U.S. per-capita coffee consumption, National Automatic Merchandising Association, vending, vending machine, Tim Sanford, Vending Times editorial, Coffee, Tea and Water conference, Ric Rhinehart, coffee, coffee consumption, Coffee Brewing Center, International Coffee Organization, National Coffee Service Association, Royal Cup Coffee, Coffee Development Group

The National Automatic Merchandising Association's 2012 Coffee, Tea and Water conference featured a keynote address by Ric Rhinehart, executive director of the Specialty Coffee Association of America (see our report in this issue). Rhinehart related the rebound in U.S. coffee consumption to consumers' renewed awareness of the pleasures of quality coffee, which he attributed to the emergence of the specialty coffee business in the early 1990s.

As I took notes on his historical summary, I vividly recalled being assigned to do a story on the Coffee Brewing Center, some 45 years ago. CBC had been established by the now-defunct Pan-American Coffee Bureau as part of PACB's ongoing campaign to promote the consumption of Central and South American coffees in the United States.

During our visit, the CBC staff told us that per-capita coffee consumption in the United States had been declining since 1962. They attributed this to the introduction, and growing acceptance, of percolators (instead of the classic drip brewers of our childhood) and of instant coffee. Both were marketed as time-savers, but neither produced a truly good-tasting cup of coffee. People who drank coffee regularly might tolerate that shortcoming as an acceptable tradeoff for easier preparation, the CBC experts told us, but the danger was that younger consumers who did not drink coffee would be less likely to start if they didn't like the taste.

Rhinehart's narrative commenced with 1975, the year in which Brazil's coffee production was crippled by a devastating frost. The resulting scarcity caused green coffee prices to rise. The U.S. coffee industry, fearful of losing sales if it passed the increased cost along to consumers, responded with blends containing more and more low-quality beans, coupled with a variety of ingenious technical measures to permit brewing the same volume of beverage with less ground coffee. But that beverage did not taste as good, and the percentage of the American public that drank coffee declined from about 60% in the early 1970s to 47% in 1995. That percentage began to increase again in the late 1990s, and by 2011, was approaching 60%. "Why?" the speaker asked. "Because coffee had begun to taste good again."

The specialty coffee business certainly was in the vanguard of the recovery, not least because it persuaded a new generation that better quality could be had only at a higher price. Quite a few coffee service and vending operators, whose patrons finally understood that all coffee is not the same and that "hot and black" is not a description of quality, paid fervent tribute to Starbucks for its success in persuading people of this.

I reflected, too, that one of the catalysts of the specialty coffee revolution was launched by the coffee service industry. The Coffee Development Group grew out of discussions initiated with the International Coffee Organization (London, England) by leaders of the National Coffee Service Association. In 1981, NCSA president Hatton C.V. Smith, Royal Cup Coffee (Birmingham, AL), announced that the ICO's Promotion Fund had agreed to underwrite a trial marketing program to be conducted by NCSA through four regional committees (see VT, May 1981).

That trial was successful. The program grew into the Coffee Development Group, which performed many valuable services during the decade or so of its existence. CDG ended when the ICO wound down the Promotion Fund under a modified International Coffee Agreement in the early 1990s. We think it deserves to be remembered.

The mature Coffee Development Group set up taskforces to work with coffee service and vending operators, to introduce a quality coffee curriculum into culinary education and to establish coffee houses on the campuses of colleges and universities whose graduates would become the next generation of managers and executives. All of these programs continued for years and delivered results that demonstrated the relationship among promotion, education, quality and perception of value.

The launch of the Coffee Development Group coincided with the introduction of fresh-brew coffee vending machines that ground whole beans for each cup they brewed, and with a tilt in the coffee service segment away from low pack weights and toward more advanced coffee brewing, holding and dispensing systems. It also coincided with the National Coffee Association's "Coffee Achievers" advertising campaign, which was criticized by some industry members for being too generic and ending too soon. But it certainly contributed to the discussion. We don't think that the flowering of specialty coffee and the transformation of workplace refreshment services in the 1990s can be understood without remembering the heroic efforts made by these industries in the previous decade.

Coffee service, like vending, sometimes is seen as unsophisticated and unimaginative by commentators oriented toward mass-market and upmarket audiences. But longtime observers know better, and believe that the best is yet to come.