The continuing challenges of office coffee service | CX Innovators Podcast

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In this episode of the CX Innovators podcast, Charlie Ray of Ray Coffee Service explains that what’s popular with customers today may not be tomorrow, and how the need for new products and equipment never goes away.

Coffee service equipment has evolved over the years almost as fast as consumer coffee preferences. To survive in a rapidly changing marketplace, operators have to know what products customers want and what equipment will best deliver it.

Charlie Ray, a 53-year coffee service veteran based in Savannah, Georgia, has learned that what’s popular with customers today may not be tomorrow, and the need for new products and equipment never goes away.

Ray, founder and owner of Ray Coffee Service, shared his insights on the always changing but never boring world of office coffee during a CX Innovators Podcast, “The continuing challenges of office coffee service,” with host Elliot Maras, editor of Vending Times.

Remember the BreakMate?

Charlie Ray poses with a Jofemar countertop brewer for larger accounts. Photo: Ray Coffee Service.

One of the most successful innovations Ray came across since launching his business in 1970 wasn’t even a coffee machine: the Coca-Cola BreakMate, a self-serve, countertop, postmix beverage dispenser.

Introduced in the late 1980s, the three-select machine offered an efficient way to serve Coca-Cola beverages that fit into the coffee service operators’ business model — where the location, not the consumer, foots the cost of the product for guests and employees.

The BreakMate was embraced by coffee service operators nationwide and was highly profitable.

But while the BreakMate was popular with customers and coffee service operators alike, the equipment needed frequent repairs. Hence, the Coca-Cola Co. stopped supporting the business more than a decade ago.

To this date, veteran operators like Ray agree no cold beverage dispensing system for the office has achieved the popularity of the once pervasive BreakMate.

Starbucks shakes the market

Starbucks, the retail juggernaut of the 1990s, was the next major brand to rejuvenate office coffee service in Ray’s recollection.

While Starbucks did not initially serve the office coffee market and actually was a competitor, it nonetheless gave new life to coffee service.

“They actually did us the greatest favor that anyone has actually done to office coffee service because Starbucks taught people to drink quality coffee,” Ray said. It also introduced people to coffee variety.

Keurig makes its stand

The Keurig single-cup machine also played an important role for coffee service when it came on the scene in the 1990s. Unlike Starbucks, Keurig was first introduced exclusively to office coffee service operators and gave them a machine that brewed coffee one cup at a time and offered coffee house quality and variety.

Where the coffee service business was once mostly fractional pack coffee brewed in batch brew machines, the countertop single-cup machines brewed coffee in cartridges and pods, offering more variety, and became especially popular in the U.S. workplace.

In time, however, Keurig, the single-cup market leader, began selling its machines and K-Cup cartridges at retail, underselling coffee service operators. Almost overnight, Keurig became unprofitable for many operators.

To protect his profitability, Ray found other single-cup machines that were not available to consumers: the Tassimo, and eventually the Massimo.

COVID hits

By 2020, business was looking up for Ray until COVID struck in the spring, posing the biggest challenge of his coffee service career.

“COVID was and still ever is the worst thing that I have ever seen in my business life,” he said. Sales fell 90%. He has not yet recovered.

“It’s been very, very difficult,” Ray said. He consolidated his two delivery routes to one and laid off some employees.

On the bright side, some new single-cup machines have shown promise, for both cold and hot beverages, as people are slowly returning to the workplace.

The Flavia Creation 600 for both coffee and tea has proven to be an excellent machine. It allows the operator to see what products every customer has consumed in real time and alerts the operator to any mechanical issues. It also allows the operator put messages for the customer on the touchscreen. It also communicates when there are mechanical issues.

The Lavit countertop machine for cold beverages has also proven successful. The machine can offer a variety of chilled, still and sparkling drinks using recyclable capsules.

“You don’t know how a machine is going to work until it’s been in the market a year,” Ray said.

To listen to the podcast, click here.

Elliot Maras is the editor of Kiosk Marketplace and Vending Times. He brings three decades covering unattended retail and commercial foodservice.

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