Consumers Choice Coffee, a roaster and OCS operator based in Louisville, Ky., has experienced strong growth in both offices and foodservice in the last 10 years, according to Bob Patterson, president. “People are drinking more coffee; it’s pretty amazing,” he said.
PACK WEIGHTS KEEP RISING
Patterson was among several to note that OCS pack weights have increased in recent years as consumers prefer darker roasts and more full bodied blends.
Patterson said the demand for Fair Trade and sustainably grown coffee has been much stronger in foodservice accounts than in offices, but this could change.
“People are drinking more because they find what they want,” agreed Steve Wall, executive vice president at Baronet Coffee, which makes OCS fractional packs and pods. “With one cup, people are coming back to the break room.” Wall, whose company also sells to foodservice accounts, said the foodservice offerings are not as diverse as those in the office.
John Conti, the Louisville, Ky.-based roaster, retailer and OCS operator, said his business is up in all channels and he does not believe his OCS sales are being cannibalized by convenience stores or other retailers.
Conti was one of several roasters who noted that OCS accounts typically buy lighter coffee than foodservice accounts because more of the office consumption is in the morning.
Other observers pointed to the ability of single-cup systems to provide more variety as a key factor in their success.
Tony Scarpino, western regional manager for Diedrich Coffee Inc., which produces Diedrich, Gloria Jeans and Coffee People branded K-cups for the Keurig brewer, said the availability of so many high quality products has resulted in a much stronger office market.
“The snowball effect is taking over,” he said. “Convenience is a big factor with Americans.” Scarpino said the more recent K-cup offerings for the homeowner market are not cannibalizing office sales at all. In fact, he thinks the consumer K-cup market further develops the office market.
COFFEE PODS: MIXED VIEWS
Procter & Gamble’s Tim Wayne noted that the recently introduced coffee pods have not done as well in the commercial (OCS) market as at retail (the consumer market). He said no manual pod brewer has gained market leadership in either the homeowner or OCS side. “Pods in general for all manufacturers have really struggled to gain traction,” Wayne said.
Stuart Daw, president of Heritage Coffee Co. in Winchester, Ky., said pod brewers have improved after a shaky start.
Robin White, vice president of marketing at Reunion Island Coffee, thinks pods have a future because they can be manufactured more efficiently than cartridges. In addition, they are biodegradable, which is something that will continue to become increasingly important to customers. “There is huge growth ahead in single cup,” White said.
White also sees growth in Fair Trade and organic products. He said the certifications for these products make strong selling tools, and he pointed out that McDonald’s offers Newman’s Own Fair Trade coffee.
Brian Bradley of S&D Coffee claimed that pods are increasing in all geographic regions his company ships to, particularly in urban markets.
Green Mountain Coffee Roasters, which makes cartridges and pods, sees the cartridges leading the growth, noted Will Billings.
Howard Fischer, president of US Roasterie, which produces fractional packs and pods, said OCS operators are using more point-of-sale materials to communicate their products. He said it is important to educate the customers about higher quality coffee available to the office.
Fischer said retail competitors have done a better job of marketing their products historically, but OCS operators can apply this marketing strategy in an OCS environment.
One supplier and former OCS operator, Don Stoulil, a principal at Wolfgang Puck Coffees, believes the OCS industry still has a long way to go in upgrading its offerings to compete with the retail competition. “Foodservice (coffee) quality is definitely increasing,” he said. “There is a high percentage of (office) customers that are interested in having something better.”
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