The Evolution Of OCS Equipment

Office coffee service equipment trends tend to change about every 10 years or so. When I got my first job as an OCS sales representative back in 1989, I didn’t even know what office coffee service was. I had no idea that there was a service to provide coffee brewers to companies that give free coffee to their employees as a fringe benefit. Little did I know that it would become my career.

From pourovers to thermos

Back in the ‘80s, most office accounts had pourovers. I literally carried a pourover brewer in my vehicle as I went on cold calls because when I sold an account, I was able to unplug the competitor’s pourover and install mine. It was that simple. Then came the automatics, or machines capable of connecting to the water source so the customer would no longer need to pour the water into the reservoir to make a pot of coffee. Automatics generally had two to four burners, or hot plates, to keep the coffee hot. I will never forget the smell of coffee that has been sitting on the burner for hours, only to eventually burn up and ruin the glass pot. This issue was resolved with the release of smart coffee machines that would automatically turn off the burner after a set amount of time.

Next came air pots, which most of the independent operators hated because they kept coffee fresh for hours. You have to remember, we were in the business of selling coffee, not preserving coffee and lowering sales. Since the nationwide OCS companies started providing air pots to customers, the independents had to as well. Similar thermos machines came later, and brewing coffee into a thermos of some sort became the trend in the latter ‘90s.

Single-cup was born

As coffee equipment trends changed, innovations started to happen. People started to ask, “Why should we make a whole pot of coffee when we only need one cup?” The idea of single-cup was born in the late ‘90s with the introduction of a plastic pod (with a filter inside and a sealed lid) known as the K-Cup®. The Keurig® machine started to gain traction even though operators were told they had to sign a contract to buy Keurig machines and use the licensed K-Cups to brew in the proprietary equipment. Naturally, most operators resisted signing these contracts.

But once the national operators started closing deals and taking away accounts, operators had a change of heart. In order to stay competitive, they also signed contracts to get the machines, even though other forms of single-cup existed. One competitor was Flavia® and the other was the original pod. The pod was — and still is — a round filter pack of coffee built to brew one cup at a time. The problem with pods at the time was that there were no good machines to brew them in. Today, however, there are several manufacturers that build reliable pod brewing machines.

The consumer variety is what built the K-Cup business because the customers didn’t have to have a “one size fits all” in coffee. Consumers could have as many different varieties as the client would allow, making everyone happy. The K-Cup cost more than the traditional coffee pot coffee per cup, but the end consumers didn’t care. Nobody had to “make” coffee anymore.

As the K-Cup became very popular, the margins came down for OCS operators due to market saturation. While operators couldn’t buy from a different provider because of contracts and the patented K-Cup, OCS customers could buy K-Cups from other retail outlets while using the machines operators provided. This resulted in lower revenues for operators. They were ready for a new product.    

From single-cup to bean-to-cup

Using operator feedback, coffee equipment manufacturers started offering better commercial coffee machines capable of using ground and wholebean coffees to brew one cup at a time. Operators didn’t have to sign a contract to use these single-cup machines, and they could increase their profit margins to the levels they had before K-Cups saturated the market.

Today, operators can choose from a variety of single-cup capsule options such as the one offered by Massimo Zanetti Beverage Group. Massimo does not sell directly to the public, protecting the sales margins for OCS operators since their customers cannot purchase the capsules or brewers.

“Massimo Zanetti Beverage is highly committed to the single-cup capsule space,” said John Fitzgerald, vice president, away from home division at Massimo Zanetti Beverage Group. “Our sister coffee equipment technology company La San Marco® created The OC System™, a proprietary single-cup solution that replicates a professional brewing environment to produce the highest quality coffee and teas in a recyclable capsule that is exclusively available through OCS operators.”

OCS suppliers and providers both noted the increasing trend of bean-to-cup. “In addition to single-cup brewers, we are seeing bean-to-cup machines as a popular upgrade to coffee offerings in offices,” Fitzgerald said. “Bean-to-cup machines allow for the freshest, best bean extractions and a richer coffee experience.”     

“At National Coffee, we strive to stay ahead of OCS trends,” said Tracy Clark, Southwest regional sales manager at National Coffee. “Bean-to-cup and ready-to-drink coffees are making the biggest waves in OCS at the moment. Our bean-to-cup solution has proven its dependability across Europe for the past 50 years and provides little or no downtime.”

With the birth of bean-to cup, operators could choose their preferred single-cup machines and coffee. Bean-to-cup machines allowed clients to make coffee and other specialty drinks like lattes, cappuccinos, espresso and hot cocoas. Instead of having one equipment provider company to choose from, OCS operators now have a large variety of bean-to-cup brewer manufacturers to buy the equipment from, elevating the experience for the end user in the office.

“Our clients realize bean-to-cup solutions and the high quality of beverages it can bring to the table really brings the coffee shop experience into the office,” said Arjan de Groot, vice president of Bravilor Bonamat North America. “It’s a value and service only operators can bring to an office environment compared to Costco or Amazon selling cups, pods or other premium name coffee brands at low prices.”

There are many advantages to providing a bean-to-cup brewer to clients. Operators — and their customers — have the freedom to choose their favorite coffee products. Many OCS customers are asking operators to use local roasters’ coffee brands, as they value supporting the independent coffee roasters of the region.

“Over the past two years or so, we have seen a big increase in interest in our locally roasted coffees,” said Ragan Bond of Independence Coffee Co. in Brenham, TX. “The original interest was coming from the smaller mom-and-pop OCS operators. They have the inherent logistical and marketing flexibility to incorporate locally roasted offerings easily and quickly. This is a win-win situation for both Independence Coffee Co. and operators. Operators of all sizes can easily link up with our fresh roasting program. Our costs are very close to national roasters and we check every box when it comes to our production and distribution capabilities.”

Some OCS operators add a lease or rental fee to offset the costs of the bean-to-cup machines, which can range from under $1,000 to more than $25,000. Equipment manufacturers recognize that offices have different needs — and different budgets — and are responding accordingly.

“Bravilor’s focus with its current line-up and future product releases is all about widening the opportunities for bean-to-cup from a 20-person office up to 200+ by providing targeted bean-to-cup solutions that make financial sense for smaller to bigger offices,” de Groot said.

Some of the smaller OCS firms have been hesitant to invest in the bean-to-cup machines.

“I hear reasons like they are too expensive, or they are a service nightmare,” explained Melissa Brown, founder of Well-Bean Coffee Company. “I have found the opposite to be true. Well-Bean’s growth has exploded over the past four years since bringing on our first De Jong Duke, Virtu 90. Our clients who used to average $300 per month with air pot brewers now spend $750! Bean-to-cup allows us to sell our clients three types of coffee beans and three solubles. Even with 65 percent margins on these products, our clients spend less per cup than on K-cups. It’s a win-win for us and our accounts.”     

Brown said OCS operators should choose a roaster that has experience with matching their coffee profiles to the bean-to-cup recipe file to ensure that the coffee is extracted correctly.

“Grind-size, coffee-to-water ratio, and the bean’s roast profile all matter,” she added. “Since we are the roaster, we understand why this is so important.”

Brown said it’s also important to demo the machine for a week and teach the client the importance of the daily rinse, which cuts down on service calls and frustrated clients. Lastly, she said OCS operators need to ensure technicians are properly and frequently cleaning the equipment.

“The profit margin will more than make up for the increase in labor costs,” she said. “If a gunked-up machine goes down, everyone loses.”     

Cold brew, nitro brew make waves in OCS  

Cold brew, which is brewed in room temperature or cold water over 12 to 24 hours, is growing increasingly popular in the ready-to drink category and among younger generations.

“Rise Nitro Coffee cans offer clients premium and on-trend beverages like their signature Oat Milk Latte, while giving our operators shelf stability and one-year shelf life, which is unheard of in RTD,” explained Clark.

No matter if it’s fresh brewed, prebottled or brewed on site, cold brew is on fire right now.

“Clients are asking operators to help them bring cold brew into their office,” said Karalynn McDermott, senior vice president of market development with BUNN. “The younger office worker has spoken, and the new coffee is cold.”

Some coffee roasters, including Independence Coffee Company, manufacture cold brew packs, or two-ounce pouches that the consumer can use to easily make cold brew coffee. The end user simply adds the pouch to 16 ounces of water, refrigerates the mixture for 12 to 16 hours, and then mixes one part of the brewed concentrate with two parts of water or milk over ice. Each pouch makes three servings of concentrate.

You may have seen the coffee “kegerator” at industry trade shows. It’s similar to beer on tap, but it utilizes nitrogen instead of carbon dioxide to pump coffee through the keg tap and into a glass, creating nitro coffee. Nitro cold brew has a rich, silky taste with a creamy head like a stout beer and is popular with younger coffee drinkers. McDermott pointed out that offering nitro coffee through OCS helps encourage employees to stay in the office — where they’re more likely to be productive — instead of venturing outside the building to get a morning or afternoon pick-me-up.

“It is especially effective at keeping office workers from leaving their offices in the mid-morning snack and afternoon snack times,” she explained.

For OCS companies that don’t want to use a kegerator, equipment manufacturers make cold brew machines, like BUNN’s Nitron.

“Our Nitron uses a cold brew concentrate,” McDermott explained. “The ability to have multiple types of cold brew in one machine is important for operators. The new trend to use a Nitron Gas Module instead of a Nitrogen Gas Tank means it is now even easier to bring this fast-growing product to the office.    

Staying ahead of the curve  

So, what will the next trend be?

Staying attuned to the ever-changing trends affecting OCS, which you can do by connecting with local roasters and other providers and learning as much as you can, will help you keep your accounts happy with your service instead of leaving you for OCS providers that are better-informed. After all, you have to assume this is what your competitors are doing.

“The OCS industry is changing,” Brown said. “Be a part of that change and watch your client satisfaction and profit margin climb.”