Coffee Service Corner: Single Cup Evolution – A Pod Resurgence?

Coffee Service Corner Monthly Column

Well more than a decade ago while writing for Ben Ginsburg’s Vending & OCS magazine, I wrote an article on pods that took the position that operators should delay considering this solution as an alternative to K cups and the Flavia system. My premise was that pod brewing technology had not yet advanced to the level necessary to satisfy the workplace. Newco and Grindmaster were among some of the manufacturers that had developed interesting brewer solutions but a number of operators, including me, felt the brewers at this time were not quite intuitive enough nor that had satisfactorily addressed potential cross contamination issues. Interestingly, another trade magazine around this same time had a feature article advocating the pod for the OCS industry.

I should clarify that for this article, and for most Coffee Service operators, a pod is what is depicted in the image above. Some “cup” manufacturers refer to their cups as “pods”. Not sure why that ever happened.

In my recent travels, I am hearing and seeing more operator interest in pods. The interest is driven by advanced brewing systems, quality of the cup, cost per brew and an eco-friendly story.

I sought out an old friend and industry associate, Dan Ragan, for more insight into the renewed interest in pods and he obliged. Dan is the National Sales Manager for Pod Pack International based in Baton Rouge Louisiana. The following is our conversation:

KS: Pods have been in the market for 14 years, why the sudden interest from operators?

DR: Employers continue to seek improvement in the quality of their coffee offerings to keep employees in the office and not venture out to the coffee shop, so the need for quality has never been more important. Pods offer Golden Cup quality, as well as flexibility for the consumer to customize their drink of choice. At Pod Pack, for 2015, 16 and 17, we have seen growth of 30%, 30%, and 50% respectively. This high growth number has continued through the first quarter of 2018.

KS: The single-cup category continues to grow in the OCS industry. Other than convenience and selection what other factors differentiate brew by pack, and pods in particular, from traditional open or batch brew?

DR: As a single cup pod manufacturer, we begin by analyzing the bulk density of the product to determine what can fit in a pod to brew the best cup of coffee. Many operators want to know the gram throw of a pod, but that metric is only part of the story. The bulk density of a dark roast may only require 9 grams, whereas a light roast could be 13 grams. Because the bulk density is so different between roasts these two products take up the same amount of space in the pod. The brewers that we recommend pre-infuse the pod and use pressure to push through the coffee bed to provide an optimal brew.

KS: Many consumers are concerned about the environmental impact of single-cup, brew by pack products. How does Pod Pack manage their expectations?

DR: We continue to work with film manufacturers to provide legitimate options for compostable film. Although, the oxygen barrier is less effective with some bio-films, we continue to look for solutions. Most bio-films have less than 1-year shelf life and as low as 3 months’ shelf, and our current film structure is guaranteed fresh for 1 year. Also, the cost difference for bio-film versus our current film is more than two times higher. However, the current packaging based on weight provides an 87% improvement from other single-cup cartridge systems because the pod is compostable. 

KS: Are pods used in other channels?

DR: The QSR (quick serve restaurant) industry continues to look for ways to improve their coffee programs, particularly for the off-peak time. The most notable success is the Taco Bell coffee program. The goal was to have a high-quality, consistent product from coast-to-coast in all of their stores, and pods provide the solution they were looking for.

KS: Dan, thank you for these insights. Your contributions to our industry are greatly appreciated!

In closing, the NAMA Show in Las Vegas concluded recently. The booths that featured single cup product and brewer offerings were too numerous to count. Hot and cold brew by pack options as well as several new exhibitors with interesting bean to cup hopper based systems could be found throughout the exhibit hall. 

There was also a lot of floor chatter regarding cup manufacturers that have competed so successfully against Keurig/GMCR at retail but have made relatively few in-roads in the Coffee Service industry, primarily because of the restrictive KAD agreements that largely prohibit operators from using alternative cups. Will 2018 be the year that we see major operators move some of their business towards the alternative cup manufacturers? Is there an achievable lower price point that could be the catalyst to make this happen? 

From most all operator accounts at the show, times have never been better to be a Coffee Service operator. Employees are wanting and demanding more and better offerings. Offices are subsidizing more amenities than ever. The manufacturing community is giving the operators more solutions, more products and appliances to bring to the accounts. 

Until next time, thank you!

Ken

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