By Steve Hyde
From the need to have a hot cup of coffee within arm’s reach of America’s work force and to help deter employees from leaving their offices to get a fresh cup (i.e., affecting productivity), an exciting niche industry in the early 1960s was born. This widely recognized service industry, known as Office Coffee Service (OCS) today, was in its infancy a mere 40 years ago. The pioneers of the OCS industry probably perceived delivering coffee, and the associated products, as a complete service in itself.
Over time, however, this industry has grown, developed and merged into something much greater than anticipated, and gathered several distinct trades into a single multi-billion dollar industry. Although OCS operators are being presented with more change and innovations than ever before, the hot black beverage that spawned the trade 40 years ago is still at the heart of today’s diversified operation.
In the beginning
Through the first 20 years of the industry, the 5-cent per serving cost of coffee to an office manager remained a constant. What started out as a device to help keep workers at the office, evolved into a very low cost employee “perk.” As the industry awareness increased, though, the 5-cent cup of coffee along with the entire market evolved rapidly. Motivated by profitability that could be realized from coffee and allied product sales as a tool to increase the dollar amount sold per account, vending companies quickly saw the opportunity to enter the rich business of OCS. This introduction of a new “Vend/OCS” company was among the first signs of much greater diversification that would take place. According to the three leading OCS and vending periodicals, Vend/OCS companies today actually outnumber true OCS only companies.
In OCS’ early days, brewing systems offered were typically pour-over in design and the coffee distributed tended to be middle of the road in quality. Due to low-cost, high-visibility and the fact few alternatives existed at the time, the receiving vessel of choice was a glass decanter. OCS operators learned quickly that, although the glass decanter served a useful purpose, it had one inherent flaw. Coffee kept in a glass decanter required external heat to maintain an acceptable serving temperature and, when heat was applied to the coffee in a glass decanter, the coffee quickly turned into a black sludge.
Looking at industry demographics today, you’ll see that large regional and national companies have acquired many OCS operations. Some acquiring companies have a long history of providing OCS and/or vending services, while others have built their business providing office supplies or water to the U.S. marketplace. These acquisition and diversification activities are testimony to the fact that the industry has matured and changed dramatically.
Coffee as chic
There’s a fresh and exciting breath of air in the OCS industry today. America has found a renewed interest in coffee, thanks to retail coffee chains and progressive OCS operators that have focused on delivering premium gourmet coffee and coffee-based drinks. Coffee shops brewing high-end Arabica coffees—heavier pack sizes per brew—and storage of the beverage in a thermal vessel have greatly helped increase the public’s knowledge of good coffee. Who would have thought the public would have ever paid three dollars or more for a coffee-based drink? The everyday coffee drinker has become more quality conscious in the same sense that many beer drinkers today prefer the richer flavor of microbrews.
Brewing a great cup of coffee requires strict adherence to several key variables: Selection of coffee, grind of coffee, weight ratio of coffee to water, water quality, water temperature, contact time of water to coffee and storage of coffee. The consuming public, although more coffee aware, doesn’t generally understand the true art of making coffee. In fact, their perception of high quality coffee is usually shaped by three or fewer variables: The type of coffee, taste or strength of coffee and the serving vessel in which it’s served. The creative OCS operator that attempts to replicate the coffee shop experience in the office needs to understand the art of making good coffee while presenting and keying in on consumers’ perception of gourmet coffee. Presenting and using state of the art thermal brewing systems combined with high quality coffee are two major steps in the right direction.
One of the key reasons brewing into thermal dispensers has become so popular is due to their ability to keep coffee fresh and hot for long periods of time. When coffee is brewed and stored in a glass decanter exposed to open air, the coffee will begin its natural breakdown process within the first 30 minutes after it’s brewed. The taste profile of the coffee changes dramatically during this process and continually degrades because it’s being heated directly. By brewing into a thermal dispenser, however, the breakdown of the coffee is greatly delayed. The average length of time coffee will hold in a thermal vessel, prior to starting the breakdown process, is 90 minutes. This means coffee is “fresh” for a much greater period of time.
Thermal vessels also help cut down on the waste factor, but improve sales at the same time. How? Some operators say they prefer the office to throw away leftover product because it adds to the amount of coffee they sell. In speaking with one of the largest national OCS companies, however, the consumption at their thermal accounts averaged a 15 percent rise compared to when glass decanter systems were in place at the same locations. Rather than having wasted product, the customer is drinking more coffee and realizing a higher perceived value provided by the service and brewing system. Thermal brewing systems offer more then just fresh coffee. Thermal vessels are portable and allow for mobile coffee. In most cases, when you brew into glass decanters, the consumer goes to the coffee brewer and pours a cup of coffee. With a thermal system, a vessel of coffee can be taken to a workstation and served to workers at that site making it more convenient to not only have one cup but a second or even a third cup.
One very important component besides great coffee is providing high quality water in the preparation of a premium hot beverage. Unless your water source for that office happens to be tapped into a pure pristine artesian well, then you should most definitely use a high-quality water treatment system—with carbon filtration at a minimum. After all, water comprises 98 percent of the finished product. In addition to providing a key ingredient in the coffee making process, treated water extends the life of brewing equipment and provides the opportunity for recurring sales of another allied product—replacement filters and other parts for the water treatment system.
For bottled water companies, utilizing brewing equipment that accepts bottled water also provides the benefits of better tasting coffee, extended equipment life and an automatic sale of a half-gallon of water with every pot of coffee brewed. A tremendous number of proactive OCS operators have gotten involved in water in some form or another, from leasing a point-of-use (POU) cooler or reverse osmosis systems to providing and charging for filtered or bottled water. In addition, some water treatment systems offer alternative treatment regimens such as ozonation or ultraviolet disinfection. There also are numerous water companies that have developed OCS segments of their business, confirming diversification of our industry. Just as the consumer has become more coffee aware, they’re also becoming more conscience of their water supply. Customer’s education level toward quality water, just like coffee, should play a very important role in the OCS operators’ business plans.
The product knowledge and business practices needed to maintain a competitive edge in today’s OCS marketplace have become more vital than ever. Since the start of the OCS industry, several trade associations have been created to help support and provide a place for the operators and suppliers to share ideas as well as learn about new products and the latest in brewing technologies. This ultimately became a productive educational and social gathering where many friendships and business relationships were started. Over the past two decades, the National Coffee Service Association (NCSA) emerged as the largest and most comprehensive coffee organization to aggressively attempt to address these needs.
The NCSA merged last year with the National Automatic Merchandising Association (NAMA), founded in 1936 to support the vending industry. NAMA moved quickly after the merger to present some high quality, fun and exciting educational presentations, round table discussions and international sessions at its first joint national trade show last fall. This year’s NAMA convention, in New Orleans, Oct. 5-7, will feature over 300 exhibits that include numerous OCS companies, water filtration firms and a full array of educational events that focus on the world of coffee in America’s workplace. Many of us have given our support to NAMA in the hopes of building upon the past successes of the once great NCSA. As the OCS industry is rediscovering some of the excitement of its early days, the need to get together, share ideas, educate each other and view new products is more important today than ever.
About the author
Steve Hyde is vice president of sales of Newco Enterprises Inc. of St. Charles, Mo. He serves as the chairman of the Supplier Advisory Committee for the National Beverage and Products Association. He’s a member of both the OCS Advisory Committee and Show Committee for NAMA and will be a presenter at the NAMA show this year. He was previously a member of the NCSA. Hyde can be reached at (636) 925-1202, (636) 925-0029 (fax) or email: [email protected]
If you have an interest in attending any of the shows in the vending and OCS industry and would like information, please contact:
Vending Times Magazine—(212)-302-4700
Vending and OCS Magazine—(770)-451-2345
Automatic Merchandise Magazine—(920)-563-1665
WC&P Magazine—(520) 323-6144