Single-cup beverages continue to grow with estimated brewer sales increasing 200 percent by 2020. Many have questioned whether this is a short trend, or a long-term solution in the industry. Convenience drives many markets, and the beverage industry is no different. The only resource we cannot replace is personal time, so we focus on convenience items to improve productivity. Now is the time to capture a share of this evolving market.
Finding the ideal solution
Office coffee service (OCS), and vending operators continue to find the right fit in the single-cup market. The market demands change as consumers learn more about product, and quality. Opportunities exist in all markets of single-cup from low-cost to premium specialty options. However, the product must be easy to use, and equipment must perform consistently. The key for operators is to require profitable options to maintain service, and remain competitive.
1. Have a strategy
Having a clear strategy strengthens the operators’ opportunity for success. Whether the strategy includes more than one product line depends on the resources of each operator. Keurig, Flavia, Nespresso, Tassimo and other lesser known proprietary systems provide a solid single-cup platform. But, the proprietary systems have limitations for operators. Paper pods, and bean-to-cup brewers continue to grow quickly, and meet the needs of a changing market.
2. Use quality to close
Many times, quality helps close an account, though many decision makers are only concerned about price. As the labor market tightens the Human Resource managers look for premium products to keep employees in the office. This is paralleled by the need for micro-markets in the workplace, and the tremendous growth in this segment. Single-cup, and micro markets offer an opportunity to address the individual needs of many employees, and provide high quality solutions. So, an opportunity exists to create a quality custom solution, and improve profits.
3. Market the benefits
Marketing is essential to create an understanding of the solutions an organization provides. Single-cup providers may focus marketing on selection, brands, ease-of-use, environmentally-friendly or low pilferage items. The operators finding success on single-cup focus primarily on convenience, and quality. Not only the convenience of the product, but the intuitive process of the equipment strengthens the single cup platform. Additionally, the capabilities of the brewers provide opportunities to create decadent drinks. Brewer manufacturers such as Newco, VE Global, Franke, Cafection, and many others continue to provide relevant upgrades to provide the best end user experience.
4. Offer a great selection
Selection is also extremely important in single-cup. Having variety satisfies many employees, but options for each variety improves the experience. The CX-series from Newco, and the Trophy plus from VE Global provide options for pods, and cups respectively. These innovative brewers provide excellent drinks in many sizes, and strengths. The CX brewers have strengthened the paper pod industry, which is having significant growth.
5. Consider sustainability
Sustainability continues to be important as consumers are concerned about the waste of single-cup products. However, single-cup continues to grow in most products regardless of the sustainability. Fortunately, packaging companies remain focused on finding solutions, and more options exist today for an environmentally friendly product. Many K-cup style products are made with recyclable or compostable material, and some recycling centers are allowing products which have not been separated to enter the recycle stream. Packaging companies continue to improve compostable overwrap for paper pods, although the incremental cost per pouch is high.
Single-cup products continue to grow, and a well-positioned strategy provides revenue, and profit growth. The NAMA Show, and CTW afford operators a chance to see the many changes in the industry. These trade shows also offer education sessions, which add value to any operator’s business. Consumers demand high-quality, and low-cost solutions. Single-cup products continue to improve, and growth will be strong.
Dan Ragan
Daniel Ragan is a national sales manager at PodPack International. Prior to that he was president of Joe Ragan's Coffee Ltd, a top regional office coffee supplier with more than 26,000 office supplies/business products, three manufacturing plants and 6,600 clients. He has been in the industry for more than 30 years. Reach him at [email protected].
