Automatic Merchandiser

APR 2016

Automatic Merchandiser serves the business management, marketing, technology and product information needs of its readers including vending operators, coffee service operators, product brokers, and product and equipment distributors in print.

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tasted like blueberries and lemons and espresso liqueur that oozed more than it fowed. Those who have smelled and tasted fresh ground coffees within the frst or second day of the roast will testify to the intensity of their desire for the next experience of fresh. All of us in the specialty coffee industry were bound up together by a vision of education and training a barista nation for a homeland of cafes, but would it be possible for someone to have that café experience at home or in the offce? Specialty roasters strove to preserve that peak experi- ence as their coffee traveled down to "the market." One-way valve bags and door-to-store shipping of whole bean coffees conspired to deliver this freshness at coffee shops. Soon, a new potential emerged for the company that could deliver a convenient, spe- cialty solution for homes and offces. Just as I had been skeptical about Star- bucks early on, I was skeptical about the Keurig K-cup, too. I did not think that anyone would be willing to spend that amount of money on a cup of cof- fee brewed at home or in the offce. How badly I underestimated and stubbornly resisted the Amer- ican compulsion for the speed of convenience! We don't have the luxury of dismissing market trends, believing that they will go away. The need for freshness and convenient specialty beverages will only grow. Lesson 3: Arriving at freshness and convenience Keurig unleashed the pent up demand for a convenient "gourmet" solution. And despite their well intended commitments to freshness, their commitments to shareholders drove nearly every "gourmet" coffee roaster to buy the packaging licenses, gladly accepting the one-year expira- tion date in exchange for access to lucrative markets. But the coffee houses had created a different latent market by exploiting an old American passion for a new kind of coffee-favored milkshake: a shot of espresso smothered in steamed milk and sugar. Americans queued up for hot and cold specialty coffee bev- erages that we really could not make at home or in the offce. So, we waited and hoped for espresso salvation, and right on cue: enter Nestle. Even before Keurig encapsulated American "gourmet" coffees, Nes- cafe created espresso capsules and brewing systems as a retail solution for Europeans who wanted to brew a great shot of espresso at home or in the offce. Although the capsules were intro- duced to North Americans in the 1980s, our aversion to espresso shots delayed signifcant market penetra- tion until Starbucks had primed the consumption of specialty beverages in the mid-1990s. Then, impossibly coincidental to the fnancial crisis and Internet fragmentation of tradi- tional channels, espresso capsule con- sumption began to surge, increasing well over 50 percent in 2011. Nestle was able to capture the essence of the coffee bean from origin and deliver it into a convenient for- mat while appealing to the evolving American palate. This is shown in the fact that Nespresso sales in the U.S. topped $300 million in 2013 alone. Nestle executive Jean-Marc Duvoisin announced the deployment of a new capsule system to produce both 40 ml espresso shots and 8-ounce coffees. Although the tactic clearly intended to take market share from giants like Keurig, Duvoisin appealed to the attentions of potential investors by asserting that Nestle will be focus- ing on premium top quality coffee: "We don't feel like we have direct competitors, we will be creating a new market." No matter how the wordsmiths say it, I will not error again in my entrenched arrogance of dismissing trends, now I will be shouting, "The capsules are coming! The capsules are coming!" No replacement for education The industry has trained me and now I train others to start their personal mastery of coffee appreciation and preparation. We developed coffee training for NAMA and presented training sessions at OneShows and CTW shows over the last 15 years. Our coffee certif- cate program has prepared students to understand origins, processing, roasting and blending through a series of four exercises designed to enhance ability to discriminate coffee fragrances, aromas and favors. If you are looking to enhance your knowledge of coffee, I invite you to join our Coffee 101: The Elements of Coffee workshop at this year's NAMA OneShow, Tuesday, April 12th, 8:00 a.m. to 12:00 p.m. The class is a fast-paced, intense, four-hour session delivering the perfect blend of cof- fee fundamentals and brewing techniques. ABOUT THE AUTHOR Mike Tompkins is president of Coffee Products Associates and has been the fa- cilitator of the QCCP program since 2000. Named NAMA 2002 OCS Allied Member of the Year, Mike Tompkins consults with executives and employees of coffee ser- vices, bottled and POU water companies, vending services and retail operations in the U.S. and Canada to execute coffee marketing strategies by owning coffee expertise from bean to cup. 34 Automatic Merchandiser VendingMarketWatch.com April 2016 C O F F E E 1 0 1

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