Micro markets are the fastest growing industry segment and OCS operators don’t want to be left behind. When OCS providers launch new services, many look to micro markets for added revenue. OCS providers report adding micro markets to diversify offerings, and many are finding that consumers are more willing to pay a higher price for a cup of coffee in a micro market than in vending or traditional office coffee.
OCS expansion
The 2014 State of the Coffee Industry report found that 33.88 percent of operators expanded into new lines of service. Of those 33.88 percent, more than half of operators expanded into micro markets. OCS only operators accounted for 25 percent of those.
Types of coffee service system
For those coffee service operators who expanded into micro markets in 2013/2014, 14.93 percent placed a bean-to-cup brewer in a micro market location. 10.45 percent of coffee service operators reported placing a Keurig single-cup brewer in a micro market location while 23.88 percent of operators reported placing other single-cup brewers. Pour-over, automatic and thermal brewers trailed in their micro market placement at 2.99 percent while 7.46 percent placed Flavia drink stations in micro markets.
Willingness to pay
Coffee service operators expanding into micro markets are finding new challenges such as what types of coffee sells best in micro markets. The overwhelming majority sees the new business as way to offer more, higher quality choices to the consumer. Some operators are witnessing unexpectedly low OCS sales in micro markets, however, most operators are reporting an increase in coffee service sales in micro markets due to their ability to offer more premium options and the consumer’s willingness to pay more for a better-quality cup of coffee.
How is coffee doing in micro markets?
“People like many different types of offerings and larger size cups. And they are willing to pay higher prices for a cup of quality coffee versus vending.” Wisconsin-based operator
“Single cup systems break and counter-top brewers do not have the necessary capacity and are difficult to service. There is currently not a good, cost effective solution for coffee in the micro markets” Roger Sweeney, Ace Coffee Bar
“In some cases they (micro markets) have not increased sales from traditional vending.” Dennis P. Dionne BE'S Coffee & Vending Service, Inc
“Premium coffee sold even in locations where we provided free, loose grind brew systems”Texas-based operator
“Coffee service in general has been a challenge in the markets. Having the proper system for the control of cups continues to be an issue. The cups do not have a bar code for scanning and are frequently picked up for other use.” North Carolina-based operator
