Issue link: https://read.dmtmag.com/i/641418
32 STiR tea & coffee industry international / Issue 1, 2016 (February/March) PBi BULK BAGS Protective Packaging for Dry Agricultural Products COFFEE BEANS • SEEDS • COCOA BEANS • MILLED RICE • FLOUR • SPICES PBi's Bulk Bags are clear plastic bags that protect dry agricultural products from moisture, oxygen, and external contaminants. It is designed to be used as a liner in an outer jute or plastic woven sack and closed with a twist tie (included). 15300 Woodinville Redmond Road NE, Suite A • Woodinville, WA 98072 www.pacificbag.com • bags@pacificbag.com • (800) 562-2247 Fresh is Better Loss in flavor due to the rapid oxidation of coffee (which oxidizes almost as quickly as gunpowder) is so significant that Third Wave roasters toss out their stock every 10 days or risk losing their reputation for quality. Tim Widmer, v.p. of sales at United Home Technologies, believes single-serve cap- sules may one day be held to the same standard. "Forty-five years ago, Starbucks brought the concept of freshly roasted coffee to Americans," he said. "If history is a sign, the new trend of single serve coffee will surely be freshness." Signs like "Roasted & Filled this Month" or even "Roast of the Week" may appear in the single serve coffee isles of grocery stores sooner than we all expected, said Widmer. United Home Tech., located in Vancouver, Wash., sells iFill pack and capsule filling equipment. The iFill is a small 110-volt machine that operators feed stacks of capsules that are automatically filled, counted, and dispensed into boxes. Depending on the model, one employee can make 800-9,000 capsules an hour for same-day delivery and get on with their day, he said. During the early days of single-serve the largest brands spent millions on equip- ment to make their own capsules or signed agreements with Keurig Green Mountain to manufacture capsules, paying Keurig a 6.2 cents per cup royalty for the technology. Once Keurig's patents expired in 2012 a number of large co-packers including Mother Parkers, TreeHouse Foods, Club Coffee, and Rogers Family Co. filled capsules for gro- cery and smaller brands. Innovators such as Pacific Bag introduced small fill and pack equipment in 2014. Since then several European and Asian fill and pack equipment manu- facturers have introduced less expensive models designed for mid-sized roasters. During this time the minimum runs established by private label co-packers were also reduced to the point where small chains could afford to make their own branded capsules for sale online, in-store and at local grocery and convenience outlets. single-serve market versus aggressively defending market share at the expense of the industry," he observes. "Private equity tends to be more disciplined and want a return on invest- ment. The only way to do that is grow the market and lead the industry with the one common goal: to put a single serve machine in every US household. The old adage rings true, a rising tide lifts all boats," he said. In May 2014 the Keurig-owned K- Cup brands together for the first time outsold Nespresso globally and that was not counting the vast portfolio of licensed brands that includes Starbucks. A Nespresso spokesperson said the com- pany does not comment on competitors but clearly the segment is now a two horse race — Keurig and Nespresso. Tassimo was Europe's fastest grow- ing single-serve system but faltered in 2012 when it was forced to recall 2 million brewers making it likely JAB will choose Keurig as its European capsule format. Pod Pack national sales manager Dan Ragan predicts single serve will continue to grow 10% annually until 2020. How will Keurig extend its reach globally? Brewers are key. Machine sales plum- meted 22% in the first three months of 2015 following the introduction of $189 Keurig 2.0 in 2014. It is the latest in a line of disappointing machines that includes the ill-fated Vue and the Keurig Kold. Missteps invited KitchenAid, BUNN and Remington and numerous appliance manufacturers into the segment with lower priced and more versatile home brewers. Following the acquisition an in- vestment in Keurig's brewers will likely result in better researched designs. JDE's Senseo is a single-serve filter pod brewer that has a strong global pres- ence and appeals to a fundamentally differ- ent consumer tier. Filter pads are viewed as more environmentally friendly and less ex- pensive way to achieve coffee convenience. Filter pods are also likely to get a boost as JAB repositions the Senseo platform. Foodservice will play a large part in the growth of the single-serve market in the US, according to Ragan, with the ma- jority choosing filter pods (1 billion units by 2020). The acquisition does not bode well for JDE's Tassimo brewing system. "Tassimo will be out by 2025, maybe sooner," he said.