Are Bean-to-Cup Machines the Future for Retail Coffee?
Recently, we've heard how retailers have struggled to find experienced foodservice employees. As a result, they're left frustrated in search of staff and open to alternative strategies. Simultaneously, operators are faced with rising costs of goods and labor. Savvy equipment manufacturers have seized this opportunity and begun to launch a new wave of "bean-to-cup" coffee machines.
They claim to have a solution that will eliminate brewed coffee waste while delivering fresh brewed coffee every time, all while minimizing labor. How could this possibly be a bad thing? Are these machines the proverbial knight in shining armor for retailers?
Raised in a family that's been in the coffee business for more than 115 years, all we do is talk coffee, and we tend to talk to as many people in the trade as possible to collect a well-rounded point of view. Let's take a dive into this brewing-industry shift.
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Essentially, equipment manufacturers reengineered super-automatic espresso equipment to create an "on-demand coffee brewer." Most of these machines have three coffee bean hoppers with three independent grinders and a single brew chamber to brew three different hot coffees in multiple sizes. Many also brew an ambient temperature coffee in all three flavors to utilize for iced coffee.
These machines can have custom graphics programmed into their operating systems (OS) to personalize the consumer experience by retailer. For multiunit operators looking to standardize their settings, they can utilize a USB drive or telemetry service to program the machine's OS. These intuitive, user-friendly interfaces help consumers quickly figure out how to operate and brew a cup of coffee. The machines' brewing method is different than standard drip brewers — they're almost espresso-like so the profiles, although delicious, are a little different than traditional batch drip brewers.
The manufacturers love these machines because it's transforming the industry and generating a whole new wave of equipment and parts sales. This industry shift is similar to the time of The Great Recession when retailers began to transition from glass pots to 1-gallon to 1.5-gallon batch brewers in an effort to reduce the labor-intensive model of brewing half-gallon pots.
Weighing the Pros
The pros of bean-to-cup machines include:
- It eliminates brewed coffee waste.
- It's freshly brewed every time. Faheem Jamal of Chestnut Markets in New Paltz, N.Y., states, "I love how every cup is freshly brewed 24/7/365 days a year, not to mention the machines minimize waste!"
- Consumers can get fresh brewed coffee all day and night. Gone are the days of getting an old, burnt cup of coffee during off-peak hours.
- Fresh iced coffee is available in multiple flavors.
- A modern look with digital screens enhances the experience by most customers' standards.
- There are replicable settings for graphics and brew ratio settings as long as the grinder's dispense rate is calibrated.
- Consumers have become somewhat desensitized to cost increases, so this enhanced coffee experience can help justify a price increase for cups of coffee.
Weighing the Cons
The cons of bean to cup machines include:
- Machines can be intimidating for consumers who may be more familiar with satellite or glass pot brewers. They may need a guiding hand with in-store coffee greeters if these machines are replacing legacy equipment.
- Manufacturers are trying to control the brew settings on the machines by saying they have custom settings for origin and roast profiles. However, roasters/distributors know what the coffees are capable of and should be in control of calibrating the machines, which has been more common through the years.
- Most retailer's machines are newer, so they haven't experienced a cycle where they could have ongoing service issues where the machines go down and require a service call from their roaster or third-party service company. A down machine means lost sales and unhappy customers.
- Equipment manufacturers haven't trained enough of the industry on this newer machine technology to create a trained workforce large enough to support this shift.
Weighing the Costs
Additionally, top-of-the-line machines can cost $10,000 to $20,000 per unit vs. satellite brewers at $2,500 per unit. It's recommended to have one machine for every 75 cups sold per day, and multiunit retailers need a rotational backup machine to avoid long downtimes.
Then, there's yearly preventative maintenance (PM) programs that cost around $800 to $1,000. Think of them like necessary oil changes and tune-ups for your car. Could you get away without them? Yes, but you are opening up the door for costlier repairs down the road.
PMs don't include reactive service calls, which will undoubtedly include labor and parts — think of those as a transmission problem. If a machine's expected lifetime is 10 years, between the PMs and service calls, the actual cost of the machine could be more than double that.
Many independent retailers have machines provided to them on consignment by roasters/distributors. With equipment costs like these, it's difficult for a roaster to see a return on investment unless they charge an astronomical price for their coffee and service.
If there's an industry shift where all retailers are buying their equipment, it's not the worst thing for roasters/distributors because now, they're not spending their money on equipment. But if these machines have problems, they can be more complex, so roasters/distributors or third-party repair companies may need time to repair the machines, especially if they don't have enough trained technicians. This will increase machine downtime, especially if there aren't extra units to swap, which is a service provided by many roasters. This will result in lost sales, as well as upset consumers.
At the heart of the success of bean to cup lies the store employees and the service companies who provide the daily maintenance, programming and preventative/reactive maintenance, respectively. But are these individuals trained for this work? Computer programming for many legacy technicians is a new skillset compared to turning a wrench or screwdriver.
Techs need to be trained en masse to ensure the long-term success of these machines. This monumental task is on the equipment manufacturers to train the industry to keep up with the demand. And to create an even more uphill battle, there is the plaguing issue of turnover of technicians throughout the industry. So now, if they're trained but leave the industry, all of the effort was for nothing. Simply put, if there's not enough people to program, install or fix them, retailers will get frustrated and revert to tried-and-true batch brewers.
Steve Jobs said," Innovation is the ability to change as an opportunity, not a threat." I agree with this, but each individual has their own variables and to make a well-informed decision, a category manager must thoroughly weigh all the pros and cons, not just the upfront cost, fresh brewed coffee and the promise of zero coffee waste.
So, the question for the industry is: When those machines have outlived their life expectancy, will retailers want to reinvest that much capital in new equipment or will they go back to traditional brewers? Those are the questions that time will answer.
David W. Mendez is chief executive officer of WB Law Coffee Co., one of the oldest family founded and owned coffee roasting companies in the United States. He can be reached at [email protected].
Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.