Are Bean-to-Cup Machines the Future for Retail Coffee?
Retailers are increasingly challenged by a shortage of experienced foodservice employees, leading them to seek alternative strategies. Concurrently, the rising costs of goods and labor have further complicated operations. In response, equipment manufacturers have introduced a new generation of "bean-to-cup" coffee machines, which promise to reduce waste and labor while delivering fresh coffee on demand. But are these machines the ultimate solution for retailers?
The Evolution of On-Demand Coffee Brewers
Manufacturers have adapted super-automatic espresso machines to create advanced on-demand coffee brewers. Typically, these machines feature three coffee bean hoppers, each with its own grinder, and a single brew chamber to produce three different hot coffee options in various sizes. They also offer ambient temperature coffee for iced beverages. Customizable graphics enhance the consumer experience, and multiunit operators can standardize settings via USB drives or telemetry services. The user-friendly interfaces make it easy for consumers to brew a fresh cup of coffee, though the brewing method differs from standard drip brewers, offering an espresso-like flavor profile.
This innovation is revolutionizing the industry, reminiscent of the shift during The Great Recession when retailers moved from glass pots to larger batch brewers to reduce labor.
Advantages of Bean-to-Cup Machines
Elimination of Coffee Waste: The machines brew coffee fresh each time, minimizing waste. Faheem Jamal of Chestnut Markets in New Paltz, N.Y., appreciates the consistency of fresh coffee available 24/7.
Availability of Fresh Coffee: Customers can enjoy fresh coffee at any time, eliminating the problem of stale coffee during off-peak hours.
Variety of Iced Coffee Options: Multiple flavors of iced coffee are readily available.
Modern Aesthetic: Digital screens and customizable graphics enhance the consumer experience.
Standardized Settings: Consistent graphics and brew ratios can be maintained across multiple locations.
Justifiable Price Increases: Consumers' desensitization to price increases allows for enhanced coffee experiences to support higher prices.
Challenges of Bean-to-Cup Machines
Consumer Intimidation: Customers accustomed to traditional brewers may need assistance with the new machines, potentially requiring in-store coffee greeters.
Brew Settings Control: Manufacturers often dictate brew settings, though roasters and distributors usually have the expertise to calibrate the machines for optimal coffee quality.
Service Issues: Newer machines haven't yet faced extensive service cycles, but breakdowns and maintenance needs can disrupt sales and customer satisfaction.
Training Deficit: The industry lacks sufficient trained technicians to support the widespread adoption of this technology.
Cost Considerations
Top-tier bean-to-cup machines can cost between $10,000 and $20,000 each, compared to $2,500 for satellite brewers. It's recommended to have one machine for every 75 cups sold per day, along with a backup to prevent downtime. Annual preventative maintenance (PM) programs cost $800 to $1,000, excluding reactive service calls, which can significantly increase the overall cost. The long-term expense of these machines can double their initial price, factoring in maintenance and repairs.
Many independent retailers receive machines on consignment from roasters/distributors, making it challenging for roasters to achieve a return on investment unless they charge higher prices. If retailers begin purchasing their equipment, it could alleviate financial strain on roasters but may lead to longer repair times due to insufficient trained technicians.
Ensuring Success
The success of bean-to-cup machines relies heavily on store employees and service companies for daily maintenance and programming. Training technicians en masse is crucial, but high turnover rates pose a significant challenge. Without adequate support, retailers might revert to traditional batch brewers.
Steve Jobs once said, "Innovation is the ability to change as an opportunity, not a threat." While this holds true, category managers must carefully weigh all factors, including costs, maintenance, and the promise of fresh coffee without waste.
Future Considerations
Ultimately, the industry's decision will hinge on whether retailers are willing to reinvest in these machines after their lifespan ends or if they'll return to conventional brewers. Only time will tell.
