"Our mistake in the office (as opposed to the coffee shop) is we served regular and decaf (and no specialty coffee.)"
Operators note pod systems's benefits
Community Coffee Co., a Baton Rouge, La. roaster/retailer/OCS operation serving the Southeast and Southwest, sees the pod as a major OCS innovation. Matt Saurage, executive vice president, said his company has never used a single-cup system before, but believes the pod can guarantee product quality and, unlike the portion pack systems, does not tie the operator to any one provider. Community Coffee will roast its own pods.
"We recognize the pod system as ideal for our company and the industry," he said. "I'm very confident in the technology." To date, the Bunn systems he has used have been reliable. Saurage likes the fact that the units are simple and don't have a lot of moving parts.
He said the units will bring incremental sales to existing OCS accounts.
These sentiments aren't shared by everyone, however.
"We haven't seen any equipment that just knocks our eyes out," said Howard Chapman, vice president and office beverage division manager at Royal Cup Inc., an Atlanta, Ga.-based roaster/OCS operation. "Equipment development has a way to go." He suspects the pod equipment manufacturers were influenced by the homeowner models, which have not proven successful to date, even among homeowners.
Pods versus portion packs
Chapman is one of many operators who feels the portion pack systems have already set the standard for quality and reliability, and the pod systems have yet to make the grade.
Randy Pickus, general manager at Medallion Coffee Service, Warrensville Heights, Ohio, said the pod brewer makers have been responsive to his concerns.
The pod systems mark Medallion Coffee Service's first major foray into single-cup. The older hopper-based systems are too expensive for the available locations in the northeastern Ohio market that Pickus serves.
Another factor encouraging operators to consider pods is the marketing that the homeowner system manufacturers are doing, which they think will rub off on the commercial users.
Impact of homeowner models
Dan Ragan, president of Joe Ragan's Coffee Ltd., Springfield, Va., thinks the homeowner pod system manufacturers have done more to educate the market than all of the earlier single-cup systems. Hence, he believes the pod offerings are an option that OCS cannot ignore.
"It's in every circular that any retailer has out," Ragan said. "It's getting more known throughout the U.S. every day." He believes pod systems are an easier sell than any other type of single-cup, even though his company offers all types of systems.
For Ragan, the pod system is one more option to offer customers. Because he roasts his own coffee, he can provide the costlier hopper units more economically than other operators. The hopper units do require more service, but Ragan likes the fact that the electronics allow him to make sure there is no unauthorized coffee being placed in the machine. This is an advantage that the portion control systems and the new pod systems don't offer.
Entr?e into smaller accounts?
Chris Nachtrieb, owner of Chris Coffee Service, Albany, N.Y., believes the pod systems will allow OCS operators to serve more small accounts, but warns operators that the potential profit in smaller accounts is not the same as larger ones. While the pod system lowers the investment in the account, the account that cannot justify a Keurig brewer is not big enough to produce the same returns as the account that can justify the Keurig.
Thomas Miller, owner of Thomas Miller & Co., Calmar, Pa., has already witnessed this with the B-100 Keurig unit, which is smaller than the original Keurig machine. "You've got an extra sale, but they're only going to buy one or two cases of Keurig coffee a month," Miller noted.
Who is the pod customer?