Saturday, November 18, 2017 | Today's Vending Industry News
To Err Is Human; To Miss The Ball Is Unbearable

by Kevin Daw
Posted On: 4/7/2014

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TAGS: Vending Times columnist, vending, office coffee service, OCS editorial, coffee industry, coffee market, coffee roasting, Heritage Coffee, Kevin Daw, NAMA OneShow, OCS ideas, Sherway Gardens

I write these articles well in advance of publishing and dispatch to the mailboxes of subscribers, hence my last article on the market may have been read after the recent wild runup in prices, making it not as timely as one might hope for. In it, I cited frost as an example of an agent for bullish market behavior. In light of recent events, I could and should have mentioned that drought is the culprit for the most recent uptrend.

What has the industry in a froth is that there has never been a drought during the coffee "flowering" period in Brazil -- the flowers preceding the actual coffee cherry development. For this reason, no one can look to history as a guide for what damage to expect, or not, to the coming crop.

This has been enough to spark speculation on the part of big fund money that has bought on heavily-driven market gains recently. We can hope cooler heads prevail, and will be keeping a watchful eye on this as it develops.

This issue should arrive in time for the OneShow, NAMA's annual fête with Chicago as this year's host. I feel it is my duty to recommend Lou Mitchell's for breakfast during your visit. With a prominent original Gold Cup award on one wall, and signs of Colombian coffee abundant, you'll feel right at home.

Trade shows are where ideas and the future lie as bedfellows. If you are diligent, there is much to be garnered by attending.

Over the course of my life, my dad Stuart Daw and I found ourselves contemplating many of these opportunities and their potential efficacies. Sometimes we were too far ahead, others times we just simply knew too much to be smart about what was presented. I offer a few examples here.

Specialty coffee. Stuart Daw opened a gourmet bean and nut shop in the center of what was then Canada's first shopping mall, Sherway Gardens in Toronto. This was, as I recall, around 1969 or so. After running it for a few years, he did not believe there was a big future in it, as it distracted from the core roasting business. So he sold it to a man named Tim Snelgrove who would put his moniker on it -- and hence, Timothy's was born.

Water. In the mid 1980s, an acquaintance with an engineering background came to us with the idea of opening a bottled water plant with the intent of selling five-gallon jugs as well as the newly developed three-gallon bottles. Single-serve bottled water was not yet widely available, and after a few years we felt that the filtered business was winning the office wars and there did not appear to be enough volume and margin in the single-serve retail market, so we sold the plant to a local investor. Within five years single-serve bottled water was everywhere.

Packaging. During a mid-1990s trade show a young woman and an elderly gentleman showed up at our booth and exclaimed that they had heard from several sources that we were the ones to talk to regarding their new invention. They proceeded to show us what looked to be a small toothpaste tube, but upon further inspection and explanation it turned out to contain coffee atop a small filter. When the tube was pierced to admit a dose of hot water, the water would open the bottom seal and brewed coffee would flow past it into a waiting cup. We found the device intriguing but when we inquired as to the unit cost we had to suppress our laughter that they expected this to sell for five to six times the cost of an open-brewed cup of coffee. We told them we would get back with them, but after a short consult, we could not get past the price proposition. That device was picked up by Mars, Inc. and became Flavia.

Going global. Lastly, in the early 1990s when I was looking for ideas to set our U.S. plant, Southern Heritage Coffee, apart from the competition, I decided to go beyond green-coffee brokers to meet up and work with coffee farmers from different origins, buying the best of their crops and marketing the beans to operators as "Coffees of the World." The higher price-point, and likely our limited marketing funds, made this a tough go and I decided to drop the idea in favor of a broader spectrum of specialty coffees. Today, this idea of direct-farm relationships has been embraced by specialty coffee elitists and is labelled "Third Wave Coffee."

The point of this painful exercise is, hopefully, to shine light on the fact that our industry -- office coffee service, vending and water (bottled and filtered) -- have been at the epicenters of some of the biggest market trends the beverage world has ever known, though we are rarely recognized for it. Just ask anyone outside the business how Green Mountain found its success and see how many mention the OCS industry. So while you walk the aisles, all aglow and quite possibly overwhelmed at the opportunities that are presented, know that the next great idea resides there. If you find it, try to hang on to it long enough to let it blossom before deciding it is not worthy of your efforts.

May your cup run deep, and the brew exquisite.

Kevin Daw KEVIN DAW is president of Heritage Coffee Co. (London, ON, Canada), a private-label roaster serving the breaktime management industries. A 30-year veteran of OCS, water delivery and vending operations, he has concentrated on coffee roasting for the past two decades.