Thick in the throes of researching the state of the coffee service industry, it’s safe to say the refreshment service industry overall has weathered the challenging economic environment in good condition. The State of the Coffee Service Industry will give specific numbers on the performance of the various product segments in our September issue.
Without divulging data, it’s safe to say that quality – in both product and service – is what “rules the roost” today, not price. The manufacturers of all types of refreshment products – coffee, water, flavored water, juice, sports drinks, iced tea, iced coffee, etc. – and of the delivery systems that provide these products have continuously improved quality.
Refreshment service operators have been fortunate to have a variety of good products to market, and enough operators have “taken the bull by the horns” and become experts on these offerings and have done a good job of communicating. The Internet and social media have been invaluable to refreshment service operators.
One of the most refreshing findings (no pun intended) in my research is operators’ success keeping market share away from other channels of trade that cannot offer service. I’m speaking of office supply retailers, membership warehouse clubs and to some extent, supermarkets and mass merchants. These competitors tirelessly seek to offer competitive pricing on office refreshment products.
The consensus among operators is these price-driven competitors have become less of a competitive threat in recent years as the expertise needed to provide these products has grown exponentially.
What a long way we’ve come from the mid 1990s, when Folgers created a stir in the OCS industry by announcing plans to sell OCS "frac" packs in warehouse clubs!
Operators have largely learned in recent years that keeping up with the new products requires an ongoing education. As long as operators continue to “stay in the loop,” they have little to fear from price-based competitors.
Single-cup coffee brewers, which lead the charge in today’s refreshment services industry, continue to evolve. There are more systems available than ever; operators have more systems to choose from, and product quality is better than ever.
Water filtration – which affects coffee quality in addition to water quality – has made big strides in recent years. There is a whole science in water filtration that operators are paying attention to as new products enter the market.
Ice dispensers, especially popular in the summer, are more versatile than ever. Countertop ice dispensers, besides offering ice on demand in the office, support iced tea and iced coffee that are gaining popularity with consumers.
More and more products are available that offer sustainability and energy efficiency.
These are all very exciting topics. Industry-specific education is needed to understand them, and it requires a commitment that only dedicated experts can provide. The National Automatic Merchandising Association’s CoffeeTea&Water event has provided a great education resource to operators.
Some operators even welcome the competition from retail channels that can’t provide service or understand the intricacies of today’s products and delivery systems.
Refreshment services is a specialty, and operators should not hesitate to differentiate themselves from anyone offering the products and services as “loss leaders.”
The services operators provide help people be productive, and the pursuit of excellence in this area demands a high level of professionalism. Any attempts to “commoditize” the delivery of these products should be condemned to the ash heap of history.