SPECIAL
ANNUAL
REP ORT:
STATE
OF
THE
COFFEE
INDUSTRY
OCS REVENUES
REACH RECORD
HIGH
O
Operators who provide offce coffee service (OCS)
are enjoying increased revenues for the third
straight year due to higher-margin products,
aggressive marketing and more demand.
By Emily Refermat
18
Automatic Merchandiser
CHART 1: OCS REVENUES – 10-YEAR HISTORY
BILLIONS OF DOLLARS
CS continues to return strong sales.
Whether operators have full-line
vending with OCS or focus just on
coffee service, revenues for the segment continued to climb in 2012.
The aggregate industry revenue for
this year's Automatic Merchandiser
State of the Coffee Service Industry Report increased 5 percentage
points to $4.33 billion, a record high
in the last 10 years. Single cup is a
major factor contributing to OCS
revenue growth, now representing
more than 20 percent of the brewers in the marketplace. While profitability of single cup is squeezed
by competitor price, operators are
experimenting with other singleserve alternatives such as generic
K-Cups and coffee pods that have
better margins.
Also contributing to the increase
in revenue was more aggressive marketing by operators in 2012 with
sales departments fnding more business, including growing businesses
as the economy improves. Challenges
included increased competition from
internet retailers and offce supply
5
4
3
3.39
3.56
3.74
3.92
4.11
3.93
3.73
3.93
4.12
4.33
2
1
0
03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13
CHART 2: OPERATOR SALES CHANGE, 3-YEAR REVIEW
● SALES ROSE ● SALES DECLINED ● NO CHANGE
6%
12%
14.5%
22%
77%
66%
2010/11
2011/12
stores, especially on prices for single
cup options.
More than 220 operators from the
readership of Automatic Merchandiser and VendingMarketWatch.com
responded to the OCS survey and
VendingMarketWatch.com
9%
17%
September 2013
76.5%
2012/13
provided valuable data and insights,
used in the report.
Driving change
Dropping green coffee prices, as seen
in chart 3, helped drive higher cof-