Nick Lazaris, president of Keurig Premium Coffee Systems, said he isn't sure that the pod system's customer will be the same as the portion pack customer. He pointed to a disparity in the results of surveys done of the two groups.
A survey of consumer pod system users found that most are looking for something that is "hot, black and fast." The Keurig customer, on the other hand, is looking for more.
Pod technology continues to evolve, however.
W.P. Coffee Co., the Seattle, Wash.-based franchisor of Wolfgang Puck OCS coffee, has been studying pod systems for years, and is going to be introducing a proprietary pod brewer, noted Don Stoulil, a principal in the company. The company initially offered a pod system made by Italy-based W. P. Rossi S.p.A., but currency exchange issues created some problems.
W.P. Coffee Co. is as concerned as anyone with the quality of the product, Stoulil noted, and the pod system can deliver. "Ultimately, it's what you put in there," which includes the quality of the roast, the brew, and how well the pod is packaged.
Does perception favor portion pack?
Scott Aalbers, sales manager for OCS at Texas Refreshments in Houston, Texas, said whether or not pods deliver the same quality as portion pack systems, the latter will enjoy a perception of superior cleanliness since the brew chamber is disposed. Nonetheless, he realizes the pod systems will allow him to get new accounts. He also thinks the homeowner systems will build consumer demand.
"The reality is that there is a market," said Brent Garson, president of Vendors Exchange International Inc., one of the few companies offering both pod and hopper-based systems. "We came to the conclusion that pods have an advantage in that they allow the consumer to choose the particular variety that they prefer, albeit they don't make the milk-based drinks that have proven popular with consumers, and as with anything packed per serving, the cost is dramatically higher (per serving)," he said.
Not all pod systems have the same features or the same price points. The AquaBrew Caf?jo, for instance, costs more than the Bunn, Grindmaster and Newco units, but also offers a pod ejector. "We designed our products to compete head-on with Keurig and Flavia," said Patrick Rolfes, president. He maintains his machine is not targeted to the same accounts as the other units. "Our customers want the 'A' account. That's what my accounts have come to us asking for."
More options for operators
"There's going to be an opportunity to reach more customers than ever before," said Dan Cignarella, senior marketing manager at Green Mountain Coffee Roasters Inc. Green Mountain produces many of the Keurig K-Cups, and is also offering several varieties of fair trade and shade grown pods for commercial pod brewers. He said the pods will work in all the commercial units on the market to date.
Like many of the other pod manufacturers, Green Mountain plans to sell pods to the homeowner market as well. Cignarella said that unlike the commercial pod market, there is no uniform standard pod size for homeowner units, which is one factor preventing his company's entry into that market at present.
Most operators were not concerned about losing pod sales to retail outlets. While many of the retail pods will fit in commercial machines, the roasters are pricing pods in such a way that retail will not undersell the OCS operator.
Most OCS operators were not concerned about pilferage for home use, either. OCS operators already faced this hurdle -- successfully -- with fraction packs.
Will retail pods affect OCS?
One concern that several operators raised was the fact that retail pricing could affect the price point they will be able to charge for pods. The consumer pods are similar in size to commercial pods. However, it is more likely that competition among OCS operators will determine OCS pod prices.
Meanwhile, the hopper systems continue to provide certain advantages.