Up for the cup: coffee machine suppliers talk business

Coffee machine providers supply to all manner of operators offering hot beverages these days, but there is something comforting about the fact that the traditional coffee shop market continues to blaze a trail.

It is predicated that 4,000 new coffee shop outlets will spring up in the UK between now and 2018, as operators continue to satisfy the nation’s love of caffeine.

The total UK coffee shop market is currently estimated at some 16,500 outlets, with the turnover of the sector growing 6% to £6.2 billion last year. Research firm Allegra Strategies recently projected that the total UK coffee shop market will exceed 20,500 outlets and a turnover of £8.7 billion by 2018.

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This is all music to the ears of coffee machine suppliers and installers, particularly those with links into the national chains, where the growth is strongest.

The expansion of the market is naturally having a massive impact on the sale and specification of commercial coffee machines.

Julian Lambert, sales director at Maidaid Halcyon, which produces the Barista and Bezzera range of espresso machines, points to a surge in sales of entry-level machines as evidence of the explosion in independents.

“With the amount of new coffee shops opening at the moment and the majority of them being fairly small, a trend has developed for a budget machine,” he remarks.

“The other end of the market seems to demand the larger bean to cup machines.”Lambert acknowledges that the emergence of non-branded outlets does bring its own set of challenges, though. With a lot more independent coffee shops springing up, there is inevitably a higher proportion of users out there who are unaccustomed to operating machines. “This means they require budget machines to which they need barista training in order to survive in the market place.”

Coffee shop growth is one thing, but even without it the market would be going great guns due to the number of places now serving coffee, says David Lawlor of Watermark UK, the specialist coffee equipment company which markets the Gaggia and Saeco ranges of commercial espresso machines in the UK.

“Increasingly consumers expect espresso to be offered as a matter of course and there is big potential outside the traditional coffee shop sector, for example in pubs,” he says. “In terms of machines, quality and reliability are always in demand. Speciality coffee roasters are becoming a significant trend.”

Matthew Tuffee, UK sales and marketing manager at Cimbali, agrees with those that think the real growth in the market is coming from non-coffee specialist outlets, such as B&I operations where food is the top priority. Conversely, however, there is an ever-widening gap in coffee quality among the non-specialists, he says.

“The issue that I often come across here is the use of the wrong equipment for the business type. The theatre and drama of a traditional espresso machine may appeal to whoever is making the buying decision, but when quality with speed of service is a top priority it is often the completely wrong choice to make. How much easier it would be if that operator used a bean to cup machine to maintain quality when under pressure and improve service times.”

Coffee machine manufacturer Melitta is in bullish mood after reporting a 40% rise in business year-on-year during the first quarter of 2014.

Managing director, Steve Penk, agrees there is a definite air of positivity within the sector, right the way from coffee wholesalers and distributors to super automatic suppliers and end-users.

“Demand for the machines has always been there but we are now finding that with the improving economic environment, customers now have funds available to enable that demand to be met,” he says. “Interestingly, we have also identified a trend towards more machine rental and indeed a greater acceptance of the concept of rental — a little like the commercial car market, where it is no longer as important to actually own the machine.”

Coffee machine manufacturers continue to invest significant sums in bringing out new lines designed to meet the operational and commercial needs of operators across the board. Commentators point to ongoing growth in demand for intelligent machines that monitor extraction, pressure and temperature to help baristas produce the perfect cup of coffee and which also provide vital reporting and performance information.

At the same time, buyers outside of the entry-level market are becoming more sophisticated and have greater expectations in terms of performance and service than they might have had in the past. This, say coffee machine manufacturers, has served to drive up the standard of design and build quality in the market at least.

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Manufacturers are also supporting operators by developing new, ‘fail safe’ technologies that deliver a consistency in cup quality.

Cimbali, for instance, recently introduced PGS, which stands for ‘perfect grinding system’ , an intelligent, self-adjusting technology in which the grinder and machine talk to each other to optimise the grinder burrs through the working day so that the quality of the finished drink is maintained across the menu.

“This means that whoever is working the machine, whether it is a new starter or an experienced barista, the customer will always enjoy a perfect coffee every time,” says Tuffee. Cimbali’s PSG technology was originally only available on selected traditional machines, but it is now being rolled out across the superautomatic machine range, starting this year with the S54 and S39 models.

“Superautomatic machines are best suited to fast-paced, quick-serve environments where it is important to deliver consistent quality and fast,” says Tuffee.

“In these situations, someone is usually given the job of doing regular ‘espresso checks’ each shift to make sure the coffee tastes as good as it should. When things get busy this often gets forgotten about. As a result, over time the quality of the coffee may deteriorate. Our new S39 and S54 with PGS offer a failsafe way to deliver coffee to a pre-determined quality without the need for regular checking and adjustments, freeing up staff to concentrate on other areas of the business.”

Gaggia’s main launch for 2014 is its Saeco range, which hands it a mid-budget alternative to complement its core premium line-up. Lawlor says that the Aulika bean to cup machine is typical of the new range. “It’s competitively priced but has quality features, such as adjustable pre-infusion for an even and full extraction of flavour from the coffee.”

Over at Maidaid, there is a clear emphasis on coming to the assistance of independents that need a cost-effective but reliable solution.

“In line with the new smaller coffee shop openings, we have launched the Barista Compact machine which caters for this market place without compromising quality,” says Julian Lambert. Melitta’s main objective for 2014, meanwhile, is to build on the significant growth it has already experienced this year. This, insists Steve Penk, will be greatly assisted by the launch of two new flagship products, the XT6 and the CT8.

“The XT6 has been developed for HoReCa businesses dedicated to superior coffee quality but also seeking greater performance,” he explains. “The new machine can prepare up to 150 coffee specialties per hour and is expected to set new standards in the mid-range class.

“The CT8 has been designed in conjunction with some of the world’s busiest QSR chains who have volume and performance at their heart. A large touchscreen and enviable ability to deliver thousands of drinks make the CT8 a serious contender for any operator in the volume coffee business.”

While sales appear to be heading in the right direction, there are those who sound a note of caution over events that could potentially inhibit the market.

Cimbali’s Tuffee concludes: “Where there is a decent margin to be had there is always going to be the potential for new entrants to come in and undercut the market. While competition is always healthy, the industry doesn’t need a price war as this would inevitably lead to a drop in coffee quality.”

Bean counting

OVERALL COFFEE SHOP MARKET

16,500 Number of coffee shop outlets in the UK

4,000 Predicted coffee shop openings 2014-2018

£6.2 billion Total UK coffee shop turnover in 2013

6% Sales growth of UK coffee shop sector in 2013

£8.7 billion Forecasted value of UK coffee shop turnover in 2018

BRANDED COFFEE SHOP MARKET (Costa, Starbucks etc)

5,530 Number of branded outlets in the UK

1,470 Predicted branded coffee shop openings 2014-2018

£2.6 billion Branded coffee shop turnover in 2013

9% Sales growth of branded coffee shop market in 2013

£4.1 billion Forecasted value of branded coffee shop turnover in 2018

Source: Allegra Strategies

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