Refreshment Services 2013

It was a challenging year for our industry; despite the continued economic downturn, operators have recovered much of the revenue they lost in the prior 24-months.  Many operators are reporting record sales increases over the prior year.

The 2012 NAMA coffee consumer research revealed at CTW 2012 further showed that one-third (31%) of office employees increased their office beverage consumption. Additionally, access to coffee and tea in the office has increased significantly from 2005 to 2012.

One of our objectives at NAMA is to increase coffee education so to raise the level of professionalism in the refreshment industry and with our operator members.  We currently offer professional sales training classes at our coffee events and trade shows; our QCCP (Quality Coffee Certificate Program) and our CCS (Certified Coffee Specialists) programs, improving coffee knowledge and skills that are used to educate the customers.

These higher level skillsets are validated in the 2011-2012 State of the Coffee Industry report and our 2012 consumer coffee research.  An average of 71% of the coffee service decision makers’ surveyed feel their representative makes good equipment and product recommendations, they understand needs and they know coffee and tea.

Two key market segments that will receive priority from NAMA and our members are:
1.    Micro Markets
2.    Single Serve

Micro Markets are the fastest growth area within the vending industry. Micro Markets are essentially a self-checkout vending machine. Just a few profitable benefits:
-increased selection of products
-make non-traditional items for sale (i.e. 2-ft long Beef stick)
-customers can hold and examine specific products
-zero service calls for out-of-order machines
-keeps employees on site for meals
-increased margins and higher sales revenue

The single serve market continues to grow, 32% of offices that offer coffee service now have single serve. It is estimated that single cup growth will reach $8 billion by 2017 (home and office-Study Logic). The workplace customer is hooked on the convenience, the coffee/tea varieties and is willing to pay a higher price. One strong key to continued single serve growth is the younger employee, 57% of those surveyed say their consumption would increase if they could prepare specialty drinks.

Three strategic imperatives for 2013 will be:
1.    Work with operators to move away from a “prevent” strategy to a “broaden” strategy.
2.    Enhance the value of refreshment services by raising expectations.
3.    Expand the benefits of coffee beyond productivity to include balanced health, supported by mood and relaxation benefits.

NAMA is looking forward to working with our members and providing the tools for an exciting and profitable 2013.

Sources:
*    State of the Coffee Service Industry-Automatic Merchandiser
*    Jim Brinton Vending Times article-January 2012
*    NAMA 2012 Consumer Coffee Research-Heart + Mind Strategies
*    StudyLogic, UBS-Rabobank

Roger Stewart, NCE5, CCS Director of Coffee and Water Service. Joined NAMA in 2003. Previously was VP of operations for USRefresh, a division of US Office Products.  He lived in Seattle, WA, working at Starbucks Corporate office as Director of Special Markets and later was President of AAA Coffee Service with branches in Seattle, WA, Portland, OR, and two locations in Southern California.