Canadian Vending

Features Associations Business
Coffee trends

OCS Pods, Take Two


June 2, 2010
By Brian Martell

Topics

Back in April of 2004, I wrote about the new wave that was hitting the
retail shelves of Europe with the hopes of it spreading to North
America and filtering into the OCS market: pods.

Back in April of 2004, I wrote about the new wave that was hitting the retail shelves of Europe with the hopes of it spreading to North America and filtering into the OCS market: pods.

They were new, sexy and could offer variety through a small machine in a cup-by-cup format that was fresh brewed (many Europeans still use instant coffee at home). The hope at the time was that there would be an evolution of pods in the OCS market from the home into the office.  But several obstacles stood in the way of this desired transition. 

Pod standardization: The industry had still yet to determine what the optimal size pod would be.  There were (and still to some extent): 47 mm, 55 mm and 61 mm pods available. Some symmetrical, some asymmetrical and others with flat tops that made it difficult to mix and match pods with machines. Melitta even dabbled with the idea of making a pod in the form of its trademark conical drip filter (when flat) and had some made as a test bed. Without standardized sizes, or at least a reduction in the amount of choices offered and more forgiving machines to accept them, retail consumers were less willing to commit to a coffee system that may be a passing fad with no source of consumables in a month’s time. 

Advertisment

When a new marketing effort succeeds, marketers plot their life cycle on a graph not unlike a bell curve.  In the beginning there are market innovators (early adopters) who are quick to embrace the new trend.  If there are enough of them and the momentum spreads to the population at large, then market followers (the bulk of success of the product) hop on the wagon.

Finally, in the twilight of a products cycle, market laggards (if it is a technology defined product they may be called luddites) are usually the only ones breathing new sales life into the category. When pods hit the Netherlands, many consumers adopted the pod system as a means of filling a void; smaller families or empty nests meant that only one coffee or maybe two were all that was required. A single pod system triumphed in the Dutch market (by the company Dowe Egbert, owned by Sarah Lee) and which customers adopted relatively quickly. It seems this did not happen outside of Holland.

Brewing equipment for OCS:  The initial pod brewers were strictly for home use, with a few of them being adapted for offices. The trouble is home units and commercial units are very different.  A commercial unit can be used in the home but the reverse does not hold true.  Office brewing equipment needs several qualities to be successful; durability, ease of use, and a relatively high degree of automation.

At home people own the equipment and are therefore more inclined to take care of it.  In the office, the machine is destined for abuse as the psychological attachment between to machine and the user (via his or her wallet) doesn’t exist. If the machine doesn’t work the way the customer wants, then it will be forced open, closed or apart. The OCS industry had a product, but few choices on a reliable machine to put it into.

Fast forward to 2009-10. Pods started to be standardized into two sizes with one size becoming the dominant format; the 61 mm flat top. The smaller diameter pods started to give way to the larger ones by virtue of physics; more coffee could be put into a larger pod making for a better finished brew. More brewing equipment manufacturers were having success with their brewers or getting close to the “tri-fecta” of durability, user-friendliness and automation – a combination needed by the operators to make their pod programs work.

Getting to this point was no mean feat by the brewing equipment manufacturers. Indeed, there is still a learning curve in progression for both the brewer manufacturers and the pod manufacturers but the light is definitely not a train at the end of the tunnel.

So why is there all of a sudden the big surge in interest in pods and pod brewers?

Market conditions always dictate what individual companies will do.  Some see an opportunity sooner due to the unique realities they face while others in different demographic and geographic regions are not faced with the same challenges. Pods do present an advantage over other cartridge style systems in that all the waste that ends up in the spent pod receptacle (usually inside the machine) is an excellent compost material. The increased movement to green alternatives within the last five years makes the pod brewer a much more eco-friendly than other cartridge systems. The quality of the finished product also plays an important role in the increased interest paid to the pod.

Pods seem to have taken a hold in the OCS market in a more permanent way than they did in the last six years. With a critical mass of operators signing up as “market innovators,” it looks like the marketing guys will be tracking the life cycle of this coffee phenomenon for some time to come. o

Questions or comments?  Visit Brian at www.heritage-coffee.com


Print this page

Related



Leave a Reply

Your email address will not be published. Required fields are marked *

*