Tag Archives: Nespresso

Consumer Habits: Coffee “To-Go” in Europe

22 October 2012: by Bob O’Brien
Global Senior Vice President at The NPD Group

I’m reading “Zero History” by William Gibson.  It is the last book of a trilogy that pretty much predicted YouTube and applications like Layar before there was any reasonable way for either to exist. And, yes, he gave us the term “cyberspace” in 1982.

This book is nominally about marketing…or maybe not, it’s hard to tell.  It was a little unsettling when he had the protagonist (Or maybe she’s not. Again, hard to tell.) stay in the same random Paris hotel where my wife and I mistakenly spent the first night of our honeymoon.  It was more unsettling when I read this:

“…she wondered exactly when coffee had gone walkabout in France.  When she’d first been here, drinking coffee hadn’t been a pedestrian activity.  One either sat to do it, in cafes or restaurants, or stood, at bars or on railway platforms, and drank from sturdy vessels, china or glass, themselves made in France.  Had Starbucks brought the takeaway cup? she wondered. She doubted it.  They hadn’t really had the time.  More likely McDonald’s.”

I love the term “gone walkabout.”  No offence to my fellow NPD bloggers but that little snippet is likely the best writing you’ll come across in this or any NPD blog.

For the past couple of years, I’ve included my own little riff on this in presentations I’ve done at conferences.

In 1997, when I was meeting with folks from our various European offices to brief them on CREST foodservice industry research and how we use it to help the industry make decisions, an Italian guy in the audience raised his hand and said “that chart is wrong”.  We were looking at a chart that showed how consumers in the US consumed coffee.  It showed the dayparts.  It showed the restaurant channels.  It also showed where consumers actually drank their coffee.  That part of the chart showed that about 40% (maybe more, I don’t remember exactly now) was consumed off-premises…on the go.

My colleague said that this couldn’t be correct.  ”Coffee is not for carrying!  Coffee is to be ordered from a bar and consumed at the bar or at a table, with someone.”  We discussed the issues and concluded that the chart was correct and that Americans were ridiculous, which I’ve found is a satisfactory conclusion to conversations for most people in the world.

Further to this conversation, I heard a presentation by a woman named Vanessa Kullman, the founder of Balzac Coffee in Hamburg.  She told the story of how, interviewing people walking by the front door of what was to be her first shop, they universally rejected the idea of buying coffee in a paper cup and taking it away.  She had to buy the cups and tops in the US and warehouse them in Germany because there was no European source.  At the time of her presentation she had over 50 shops.  Gutsy.

But:  in 2000, as the chart below shows, nobody bought coffee to go in the countries we track.  Today, a huge chunk of Northern European consumers buy coffee to go.  Coffee hasn’t just “gone walkabout” in France. It’s everywhere.  And, it’s not just a global brand that did it, Vanessa Kullman and other gutsy business people did it all over the place.

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A Green Pod? Trade-off between Convenience and Environment

This is an interesting article from the New York Times on the problem faced by coffee industry– how to make gourmet coffee preparation convenient to customer while preserving the environment.

A Coffee Conundrum
By MURRAY CARPENTER

WATERBURY, Vt. — Green Mountain Coffee Roasters has built a reputation as an eco-friendly company since it was founded nearly 30 years ago.

It started composting used coffee grounds in 1983, helped develop an eco-friendly paper cup in 2006 and last year installed a huge solar array on the roof of its distribution center. The company’s motto, “Brewing a Better World,” reflects its belief that it has a responsibility to help improve living conditions in regions that grow coffee beans.

But its recent growth has been fueled by a product that runs counter to its reputation. More than 80 percent of Green Mountain’s $803 million in sales last year came from nonrecyclable, nonbiodegradable, single-use coffee pods and their brewing systems. This year, the company expects to sell nearly three billion K-Cups, the plastic and tinfoil pods that are made to be thrown away — filter, grounds and all — after one use.

Now Green Mountain and its rivals are beginning to wrestle with the waste issue and searching for ways to make the packaging greener. Possible solutions include more use of biodegradable packaging, programs to recycle the pods or making the coffee filters themselves reusable.

“The whole concept of the product is a little bit counter to environmental progress,” said Darby Hoover, a senior resource specialist for the Natural Resources Defense Council. “If you are trying to create something that is single use, disposable, and relies on a one-way packaging that can’t be recycled, there are inherent problems with that.”

In the battle for market share, single-serve systems are helping coffee remain competitive, Judith Ganes-Chase, a consultant to the coffee industry, said. “The industry has to be innovative. There is a lot of competition from other beverages in the marketplace,” Ms. Ganes-Chase said. “One of the biggest issues has always been the convenience factor of how to get a good cup of coffee to the consumer at any point in the day, when it is demanded.”

Ric Rhinehart, executive director of the Specialty Coffee Association of America, said that although single-serve sales were growing rapidly, they still amounted to a small percentage of the more than 100 billion cups of coffee Americans drink every year.

Green Mountain’s K-Cups come in 300 varieties of coffee, tea and hot chocolate, and a new line of blends made to be brewed over ice. The cost varies, but is often about 60 cents a cup, or $25 a pound of coffee.

At the plant, in a mountain valley between Burlington and Montpelier, burlap sacks of green coffee beans from all over the world are stacked on tall pallet loads in one warehouse. Next door, the beans are roasted. Most are then ground and packed into K-Cups.

The containers resemble oversize creamer tubs. On machines here, they are lined with paper filters, filled with coffee, topped off with nitrogen gas to prevent oxidization, and sealed with foil. The cups work with brewing machines designed by Keurig, a Reading, Mass., subsidiary of Green Mountain.

In the machine, pins puncture the foil top and plastic bottom of the K-Cup, and hot water flows through, brewing a drink into a mug. Then the little cup gets tossed.

Michael Dupee, Green Mountain’s vice president for corporate social responsibility, said some customers did not like to see the waste. “Consumers see the waste stream,” Mr. Dupee said, “and they compare it to what they had done before, and they have a perception that there is a problem.”

To some consumers, however, the convenience and efficiency override the waste issue.

“We used to make a pot of coffee, and we would be throwing it out all the time,” said Michael Hurley, who uses the K-Cup system for concessions at small-town movie theaters he owns in Belfast and Houlton, Me. “So we don’t do that anymore. And when people come in, they get exactly what they want.”

Mr. Dupee showed off a prototype that Green Mountain planned to test this summer. It is a paper K-Cup, filled with Celestial Seasonings tea, that eliminates the plastic and the aluminum foil. In addition, he said many consumers had started brewing coffee in reusable metal-mesh filters for the Keurig machines, which accept ground coffee.

Green Mountain, he said, has also commissioned a life-cycle analysis to understand the environmental costs of the K-Cups. Though he would not discuss details of the analysis, pending a third-party review, he did say the study found that most of the impacts occur where the packaging is produced, not where the waste is disposed. He said he had been working with suppliers to make their manufacturing processes cleaner and more efficient.

He also cited Green Mountain’s collaboration with International Paper to develop the Ecotainer — a hot-beverage cup with a plant-based, compostable lining — as an example of progress in packaging.

Other coffee companies are also wrestling with the waste issue. Businesses that use Flavia pods, which is made by Mars, are able to ship the used pods to the New Jersey company TerraCycle, which will compost the coffee or tea and reuse the plastic in products like pavers and fencing, a TerraCycle spokesman, Albe Zakes said. More than 2.5 million Flavia packs in the United States have been recycled in the last year. Mars sells a billion drinks a year in 35,000 workplaces worldwide.

In Britain, Mr. Zakes said, TerraCycle has processed more than 800,000 coffee discs from Kraft’s Tassimo single-serve system. The results are being evaluated for possible application in the United States, a Kraft spokeswoman, Bridget MacConnell, said. Kraft and Mars are paying for collecting the pods, including shipping costs to TerraCycle.

Sara Lee has a simpler solution for its Senseo pods — the coffee-filled filter bags are made of paper and are biodegradable and compostable.

Nestlé’s upscale Nespresso system uses aluminum capsules, and it has started a pilot program to collect used pods for recycling at some Nespresso Boutiques.

Ms. Hoover, of the Natural Resources Defense Council, said another option was to include prepaid mailers with coffee pods, as Hewlett-Packard has done for ink-jet cartridges.

Green Mountain’s chief executive, Lawrence J. Blanford, said the K-Cups had some environmental benefits. Brewing one cup at a time means less wasted coffee at the bottom of the pot, and this reduces the overall environmental impact per cup of coffee.

K-Cups are also increasing demand for fair-trade coffees, he said, which accounted for 30 percent of Green Mountain sales in 2009. Fair-trade-certified coffees ensure that coffee farmers are paid a fair price per pound, and that coffee farms meet certain environmental standards.

Peter Meehan, chief executive of Newman’s Own Organics, said the success of the K-Cups, which are his company’s fastest-growing product, had helped Newman expand the market for organic products.

Still, Ms. Hoover wonders whether there is a simpler solution to the waste question. “At some point you have to ask, ‘But do we need this product enough that we need to be trying to find all these different solutions for the components of it, or can we just go back to the old way that we used to make coffee, and was that good enough?’ ”

http://www.nytimes.com/2010/08/04/business/energy-environment/04coffee.html?_r=1&pagewanted=printhttp://www.nytimes.com/2010/08/04/business/energy-environment/04coffee.html?_r=1&pagewanted=print