STiR coffee and tea magazine

40 STiR coffee and tea / Issue 5, 2018 (October / November) Pods Perform Convenience drives single-serve orders for private label manufacturers who must offer improved quality at lower cost Photos courtesy Pod Pack International od Pack International president and c.e.o. Tom Martin says that he is pretty happy with the way things turned out, as he stands admiring the factory floor of the company's new Baton Rouge facility, a 74,000 sq. ft. model of single- serve efficiency. The new plant can produce more than half a billion coffee and tea pods, filter rings, super pods, and capsules a year. Martin and partner Bill Powell first began manufacturing "hockey pucks" of cof- fee sandwiched between two layers of filter paper in 1996. Their office, factory, and distribution center in New Orleans measured 400 sq. ft. They caught the wave as Keurig Green Mountain and its capsule competitors pushed aside millions of 12 oz. bags of roast and ground coffee from grocery shelves nationwide. That surge eventually subsided as sales of capsule machines declined year- over-year and retail volume decreased by 2016. However, convenience knows no bounds, and has since positioned private label manufacturers like Pod Pack to cross the trough in time to catch many waves to come. Right now office coffee (OCS) is cresting, says Dan Ragan, Pod Pack's national sales manager. Ragan joined the company in 2011 after 27 years at Joe Ragan's Coffee Ltd., a regional OCS with 6,600 clients. Ragan is based in Washington, D.C. Single- serve traces its start to OCS coffee purveyors who gave away brewers by the thousands to ensure resupply contracts. Foodservice continues to build and home penetration remains substantial with millennial enthusiasm for roasters who pack their local grind into capsules, says Martin. Currently about 20% of the plant's capacity is from OCS clients with another 20% going to hotels. Foodservice and retail account for about 250 million capsules annually with small roasters placing minimum orders for 36,000 k-cup compatible capsules. Convenience is the driving force that guarantees single-serve coffee will be around a long time. What has changed are the economics and expectations, says Martin. Roasters doing a million pounds a week that rushed to buy their own capsule fill and pack equip- ment soon discovered it takes a lot of sophistication to replicate their signature taste. "Putting 8 grams of coffee in 100 million capsules proved to be too much of a dis- traction," says Martin, explaining "this is an extremely high-volume business." They sometimes can do it cheaper themselves, but not better, claims Ragan. P By Dan Bolton Filter paper pods in recyclable wraps Compostable ring and mesh filter pod

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