Microeconomists and marketers will tell you that there is a lifecycle to trends. The neo period is punctuated with sporadic pockets of acceptance commonly referred to as the pioneering stage. As the trend gains broader acceptance in a population (local, regional or global), it moves into its growth phase marked by broader media visibility. This is followed by a plateau until the trend ultimately experiences a decline. Like people, trends may be short lived or have the staying power of Methuselah. Short-lived trends tend to be called fads (like pet rocks), while those that are long in the tooth may erroneously be revered as institutional.
In the coffee service industry we've witnessed several trends come and stay while some have left. In the early years of OCS, the only solution to providing hot coffee to offices was in a glass bowl. Now we see this as archaic (yes I know, there are still quite a few of them out there, but their numbers are nowhere what they used to be). In the mid '90s we saw the advent of sweetened powdered cappuccino mixes and bets were made as to how long it would last; no one has collected on those bets -- French vanilla lives on. Bottled and filtered water products are still strong players, but more importantly, the bottled water trend has transcended our industry, becoming incredibly popular with the public at large.
For the past 10 to 15 years, a major trend has been the phenomena of single-cup cartridge coffee (the generic term for Keurig, Flavia, Tassimo, pods, etc.). One coffee roaster company in particular has gained terrific sales results and is the market leader in this segment, eclipsing all other players combined in units sold in North American. What is surprising about the trend in single-cup coffee is that industry oracles presented with the concept in the early '90s thought that it was a great system, but that no one would pay so much money for a cup of coffee in the OCS environment. Indeed, the fight to the bottom regarding price had already begun and discount services were putting pressure on premium-quality services to lower their prices. A typical serving cost for a cup of black coffee with a pourover or thermal server was about 10¢; how could you convince an office manager to pay five times or more for the same thing? What had not been counted on was the perception of a better cup brewed with cartridges through two key factors: freshness and selection. Office managers, frazzled by having to run umpteen trials to find a coffee "everyone" likes quickly saw the cartridge system as a panacea and the cost of the system was far less than the cost to their nerves of listening to complaints about the coffee. Cartridge coffee is the frosting finish to the cake of the "Me" generation.
As far as trends go, cartridge coffees (and not all of them) got their legs quickly. Another trend gaining momentum in the broader global context is environmental impact. The opening salvo to the modern debate on the environment could arguably be traced to Rachel Carson's early '60s book Silent Spring that took an apocalyptic view of where we would be many years on if we did not start changing our polluting ways. In spite of the many scientific and statistical flaws present in the book, it did start the modern eco debate and could be credited with the ban in the early '70s of the pesticide DDT. Currently, the trend of being more environmentally conscious has gone academic (global warming and the advent of climatology, for instance) and industrial (MOE and EPA, etc.) to everyday pragmatism. Twenty years ago, a blue box was a box that was blue, period. Now it is synonymous with recycling and is present in almost every North American city's infrastructure. More and more people are composting at home, or have a municipal service that will do it. Consumers are more in tune with buying "green." Businesses are looking to reduce their "environmental footprints and are doing so on many levels. One such sub-trend in the greater eco-trend is LEED (Leadership in Energy and Environmental Design), which encompasses everything a business does, from how facilities are built and maintained to how employees and suppliers are treated.
In OCS, we are seeing a trend that promotes greater perceived quality in our one-cup-at-a-time style coffees. On the other hand, there is the trend of a perceived threatened existence of the environment. The clash is and remains that almost all cartridge coffees are exponentially more polluting than traditional batch-brew or bean-to-cup options. Manufacturers of the cartridge systems have been under increasing pressure to reconcile the two trends. Keurig, the the leader in the industry, now offers the partially recyclable Vue system. Flavia has a recuperation program to incinerate or recycle their cartridges. Kraft is working on ways to make the Tassimo discs more environmentally kind. Of all the cartridge systems, the ones that have been around the longest, but have yet to find their grooves, are pods. Spent pods are not only biodegradable, but they also make ideal compost material for weekend gardeners or commercial composters.
PHOTO: Slated for fall debut is Keurig's Vue commercial single-cup brewing system. The commercial Vue packs are interoperable with the tagless Vue packs for the home market, which do not offer automatic adjustment. All Vue packs are recyclable by any facility accepting #5 plastics (polypropylene or "PP"). | SEE STORY
That said, the lion's share of the single-serve coffee business is decidedly with Keurig, and if it can effectively produce a perceived solution to the enormous waste produced by its system, it may well stay on top of the market.
Consumers have adopted cartridge coffee in a big way. Either they have reconciled the environmental impact of these systems through rationalization, have not thought about it at all, are riddled with guilt or are resigned to a que sera sera attitude. The systems that come up with an effective and perceived way of converging these two trends harmoniously will find themselves either remaining on top of the market, or supplanting the incumbents.
BRIAN MARTELL is vice-president of sales for Heritage Coffee Co.’s Canadian division. A version of this article first appeared in Canadian Vending Magazine. Kevin Daw will return in the next issue of VT.