STiR coffee and tea magazine

Volume 4, Number 1

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STiR tea & coffee industry international 51 A merican roasters will fill and pack a couple of billion capsules a month this year. Starbucks shipped a record 100 million K-Cups in December. In Europe, Nes- presso and Dolce Gusto factories are filling 10,000 capsules a minute. Globally an estimated 29 million single-serve machines were sold in 2014, up by 11% compared to the previous year, according to Euromonitor International. Demand for capsules has soared. Last year Nespresso earned $4.86 billion on brewer and capsule sales. The company has produced approximately 50 billion capsules since it introduced the first single-serve capsule machine in 1986. Estimates for global production range as high as 50 billion capsules this year alone. Keurig Green Mountain (KGM), the largest U.S. capsule manufacturer, sold 10.9 brewers and 9.8 billion capsules during the past fiscal year — up from 8.3 billion cap- sules during the same period in 2013. Sales of Keurig's portion packs are nearing $250 million a month. Keurig earned $4.7 billion in 2014. The transformation of the market is accelerating. In December U.S. consumers drank 1.86 billion cups of single-serve coffee, up 14% compared to the same period last year, according to the National Coffee Association's monthly coffee consumption report compiled by StudyLogic. Total single-serve units grew by 60% in 2014 to 18 billion. Consumption of coffee brewed by traditional drip, made-to-order and instant all de- clined in the past year while in-home coffee drinking rose 1.5%, according to NCA. Sales of drip brewers have declined since 2006 while single-cup brewers are expected to reach 26% household penetration by 2015 — approximately 30 million U.S. homes. Single- serve now accounts for 20% of daily cups of coffee consumed and approximately 27% of total U.S. prepared coffee sales of $69 billion in 2014. Capsule sales exceed $15 billion. Globally this growth has triggered a surge in capsule production. In Europe and South America Nestle remains the dominate supplier with impres- sive market share for both Nespresso and Nescafe Dulce Gusto brewers but Caffitaly ma- chines and Expressi (Aldi) machines, Lavazza Blue, Kraft's Tassimo, and Keurig brewers are competing to supply the estimated 20 billion capsules sold outside the U.S. this year. Nespresso operates the world's largest capsule factory, a $525 million production facility at Avenches, Switzerland which employs 800. The plant opened in 2008 and was expanded in 2012 and now produces 8.8 billion capsules a year. Nespresso's $225 mil- lion capsule manufacturing facility in Orbe, Switzerland (pictured above) opened in 2002 with a capacity of 4.1 billion capsules. A third $315 million factory in Romont, Switzerland will open this spring. Expect Jacobs Douwe Egberts (JDE) to challenge Nestle in 2015. The $7 billion JDE will prove a formidable competitor once the newly merged coffee division of Mon- Global Transition This factory in Orbe, Switzerland resembles a Nespresso capsule sleeve. It was awarded platinum certification by the U.S. Green Building Council for its LEED (Leadership in Energy and Environmental Design). It boils down to extraction Capsule design, fluid dynamics, the per- meability of internal filters, brewers that generate sufficiently high water tempera- ture are important considerations but grinding is critical to full flavor and con- sistency. Albert Bezjian with Ditting USA ob- serves that "regardless of brewing meth- od it is important to select the best green coffee beans and roast them to perfec- tion, but when it comes to capsules the CRITICAL ELEMENT [his emphasis] is grinding the roasted beans into uniform particle sizes for consistency in brewing." To extract full flavor this quickly re- quires a precise grind. Too coarse and the capsule will produce a weak, tea-like brew. Too fine and you get bitter over- extraction with an unpleasant peanut, grassy taste. "Coffee grinding is a crucial step in coffee processing and, when done prop- erly, can dramatically improve coffee extraction and aroma retention, thereby optimizing the brewed coffee quality," according to Scott Will, director of sales at Modern Process Equipment (MPE). Bezjian, whose title at Ditting is problem solver, explained that "as cof- fee drinkers learned how to make better coffee, they switched to filter methods and kept drinking stronger (bolder) cof- fee, and needed finer grounds for better extraction." To make Turkish coffee, for example, every bean is evenly divided into 30,000 particles. A machine operating at 1,000 kilos per hour produces 145 billion nearly identical grains. The 200 micron (µm) grind used for espresso capsules is about double that of Turkish coffee which is ground to a con- Photo Creative Commons from Espresso Coffee: The Science of Quality, Andrea Illy, Rinantonio Viani The structure of a roasted coffee bean under great magnification. Cells of different shapes filled with sugars, protein and lipids are no longer visible as the cell walls are now covered in oil.

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