Capsules and Pods

Single serve portion control coffee has been growing at an incredible rate in Australia since the major shift in domestic appliances occurred in the 2011/2012 period.

Sure, pods and capsules have been around a lot longer than 2011, but as I explain further in this article, there has been a distinct evolution in domestic consumption of coffee in Australia, so I will try to explain how this came about.

The earliest stages of domestic coffee consumption in Australia involved jars of instant or in more elaborate places you could find a basic bulk brew systems using pre-ground commodity grade coffees – percolators, drip, filter, stove top espresso, etc.

Coffee was consumed “hot” to the point of boiling and a dash of milk with sugar (which can still be the case in remote areas of Australia).

The European espresso culture had not really taken hold in Australia in either the cafe or the domestic segments because Australians tended to prefer “large” cups. Similarly, the bulk brew culture of the US also did not take off in Australia as we became more discerning of sweeter flavors and milk-based coffee beverages.

The growth in quality cafes during the period from 2005 through to 2013 throughout Australia – let’s call this the specialty coffee segment – creating something quite amazing – it conditioned our palates into accepting only high quality coffee and imparted and almost zero-tolerance for bad coffee. (The reason I have capped the date at 2013 is because the cafe segment in Australia became too saturated after 2013 – which is another big story in itself!).

During this same period, cooking and home renovation shows in TV became our most popular viewing. All of a sudden, everyone wanted a brand new kitchen with the latest European appliances so they could practice and show case their cooking skills. This in itself created a major issue with eventual death of fine dining establishments).

In those new kitchens, a space in the corner was assigned to the coffee “station”. This was a shiny stainless espresso machine and maybe an equally impressive grinder. The coffee station became a shrine to a new breed of home barista. Soon it was evident that people at home were pumping out better coffee than their local cafe.

The spectrum of the coffee market in Australia started to widen like never before. You have the traditional instant market contracting at a rapid rate and the specialty coffee bean market growing at a phenomenal rate to feed to the hungry demands of cafes now more concerned about competitive quality and home consumers dreaming of creating the cafe experience in their own kitchen.

The logistics required to produce cafe quality coffee at home are not lost on those who don’t want to fork out money for equipment, are impatient or time-poor. Spend about $2,500 on equipment and it’s still not easy to pull a great espresso shot – sometimes taking thousands and thousands of attempts and years of knowledge to work out how to dial-in (adjust) a grinder for fresh roasted coffee beans that are highly volatile and changing every day.

For some people, it’s just too much effort, mess and time – or the equipment consumes valuable bench space. These people just want a caffeine hit but their palate will not contemplate instant.

Enter the automatic espresso machine – think Jura, DeLonghi, etc.

The concept was challenging – grind, dose, tamp, extract, clean, texture milk to perfecting standards……in a small footprint, low noise, clean and remain ultra reliable.

Automatic espresso machines for the domestic market reached their peak in popularity between 2009 and 2012. I say this because from 2012 on-wards the portion control market (pods and capsules) started to explode.

It was during the period from 2009 that 2 big Australian appliance brands – Breville and Sunbeam – invested heavily into their coffee equipment portfolio to counter the increased market share of Jura and the Italian-branded Chinese-made autos from Saeco, Gaggia, DeLonghi, etc.

But Breville and Sunbeam really lost the plot in my opinion as they suffered from an extreme case of tunnel vision. They both started an “arms race” of delusional grandeur thinking they could build a $2K Italian espresso machine for $600. Whilst some of the market innovation they introduced was admirable, they kept ignoring the market signals whilst remaining blinded by these lofty goals of espresso supremacy.

They failed to notice the market turning towards portion control – thanks to that successful man-god George Clooney and his sponsor Nespresso.

You see, right under the nose of Breville and Sunbeam was an existing portion control system that was perfectly suited to the Australian market and really popular in Europe – Easy Serving Espresso (E.S.E) but they both failed to see the opportunity.

Sure, both of them would throw in a basic single E.S.E. filter in some of their machines, but Breville and Sumbeam failed to leverage the competitive edge that E.S.E. had over Nespresso at that time.

From 2013, the sales of Nespresso-compatible capsule machines started to skyrocket. The reason was simple – cheap appliance, far more reliable than domestic grade automatic machines that broke down after 6 months and then took another 3 months to be repaired, very small foot print. super-quick heat up time, no mess and fast brewing that in reality defied the laws of quality coffee extraction.

Nespresso also made some great inroads towards feeding a fundamental need of the fussy Australian coffee drinking palate – textured milk.

More than 95% of brewed coffee in Australia has milk added. It’s become such a critical component that the Europeans were in denial of this fact until 2015 when the big European coffee companies that export their product to Australia started to roast and supply locally.

The number of capsule machines being sold outstrips espresso machines by a factor of 10:1. The statistic that is not available is how many of these capsule/pod machines end up gathering dust after a short time in service.

We have worked in this market for the last 7 years, providing specially prepared coffee beans that are converted in Australia to either ESE pods or capsules.

Creating coffee for the single serve portion control market is not easy or simple.

The dosage levels are very low in comparison to what is served in a quality cafe. There is also expectation that the coffee from a pod or capsule will be good (well, that’s the hope of those folks who own such machines).

Quality, premium coffees do not essentially result in an improved coffee experience when converted to pods or capsules. Generally speaking, quality coffees are cleaner and therefore have less “bite” that translates into a smoother and richer cup of coffee when dosed correctly, however, when it comes to 5g capsules and 7g pods, this very low dosage means a quality, clean coffee may taste weak at those dosage levels.

How to get improved flavor in the cup without resorting to harsh, rubber-tasting robusta is a big challenge.

Our experience in developing various portion control single serve coffee consumables can be leveraged to provide you with an improved level of quality and freshness.

We have existing processes and relationships with Australian converters to prepare a quality product for the market.

We specialize in custom roasted coffees with a range of over 50+ premium grade coffees we can create something unique for your business.

We are the only contract coffee roaster to deploy a special freshness system for transporting the coffee from our roastery to the portion control converter – this ensures your coffee is as fresh as it was just off the roaster – no other coffee roaster in Australia uses this method and we can guarantee higher levels of roasted coffee freshness.

The majority of ESE Pods and Nespresso compatible capsules sold in Australia are imported. We offer a locally roasted quality product that is also converted in Australia so there are clear competitive advantages to our fresh product compared to those that have spent up to 2 months in hot containers in ports and on ships.

Heat degrades the quality of roasted coffee very quickly – in fact it can ruin coffee in a matter of hours. Can you imagine what is happening to those imported coffee capsules that are sitting in 70 degrees C containers for weeks at a time ?

We have a specially constructed storage system for the finished product that preserves the quality in temperature controlled environment.

We can also value-add by drop-shipping your products to your customers in any location around Australia.

Currently supported formats are ESE pods and Nespresso capsules.

To see some examples of our quality portion control single serve coffee products you can see our capsules on the mycuppa.com.au site – for Nespresso compatible capsules click here and our ESE pods click here.