Vending as a sales technique is good – but only when it comes to newspapers, chocolates and chips, as well as personal care products. He who presses the button is the one who got the goods. Just pushed it – and continued their own way. Coffee beverages vending business now comes with minimum human involvement.
Coffee vending tend to vary in terms of product quality from “Lord, what is this ???” to “Well, okay.” Why is that? Because making of coffee – is a complex process with a thousand of nuances. No exceptions. The only thing that differs very much from a good “vending coffee» to a vending of a bad coffee” – is a chain Costa Coffee called Costa Express Company.
Costa Express Coffee – is an unexpected example of the coffee business in terms of a combination of indicators varying from “country of origin”. How this company was able to appear in the UK, a country of a totalitarian tea cult – it is a mystery. Nevertheless, it was there in 1971 when this brand appeared, which not only takes a confident second place in the World after Starbucks but represents today the very notion of “premium coffee vending” that tend to vary in terms of product quality, from “Lord, what is ???” to “Well, okay.” Why is that? Because making the coffee is a complex process with a thousand nuances. Virtually no exceptions. The only thing that is very distracting from the association with «vending coffee –is a vending of a bad coffee” – is a chain called in Costa Coffee.
Different business segments have a “turnkey project” of their own
The company covers a variety of segments and locations: vending machines Costa Coffee are available at railway stations and bookstores, in Marriott hotels, Odeon cinemas, retail chains such as Waitrose, Debenhams and Tesco, and even in Pizza Hut pizzerias and Beefeater pubs. Of course, service stations Moto and RoadChef also were not left behind.
An honorable mention goes to hospitals, office centers, as well as the installation of Costa Express machines almost anywhere on request. In the future, the expansion of coverage will include more universities, transport infrastructure objects as well as more health care–related objects.
In short, Costa Express is here to stay. The reason for the successful development – the use of only high-quality coffee beans and coffee machines blends based on it, strong brand identity as well as the understanding of the remote work of self-service machines. Costa Express also has an extremely high-quality telemetry, which allows devices to be maintained “in the right shape” with minimum personnel resources.
Indeed, if it wasn’t for company’s expertise – it wouldn’t have any partnerships with the Texaco petrol station network or any strategic partnership with Shell gas stations chain. The company understands the market very well and develops in all strategic areas that exist on the market today. And it uses on all of them a single integrated “turnkey”. Company’s franchise partners get a comprehensive solution, service support, consumables – everything’s, as they say, tiptop
Costa Express Franchise
The first requirement for the Costa Express franchise – the ability to guarantee an opportunity to sell at least 30 cups of coffee a day, every day. The Company agrees to provide the equipment and consumables for free, provided that it determines the ratio of profit-sharing and holds its hand on the letter. In 2011 forecourttrader.co.uk portal estimated this figure being ? 35,000 per year (for the UK).
The minimum level of cost for the opening of a Costa coffee brand by the franchisee is around ? 250,000 with the planned ? 85 000 profits per year before taxes, depreciation and amortization. The total investment in a coffee shop – is a minimum of ? 800 000 (http://www.whichfranchise.com/ data portal).
The vending machine at the beginning of its emergannce on the market was worth something around ? 20,000, including telemetry.
As a standard, the machine from Costa Express is a 1 m2 one which requires water supply and drainage of waste products. Machine’s run through a touch-screen, its range offers cappuccino, latte, mocha, white American and US, as well as hot chocolate. In all the drinks you can add flavors – vanilla, caramel, chocolate, nuts. Current price – ? 2.20 for a regular (12 oz) and ? 2.50 for a large (16-ounce) glass.
Failure of an ideal system
However, on a smooth development path of a premium vending in 2016 there’s been found an obstacle: a resident of the United Kingdom made an unpleasant discovery for the company. It turns out that the company’s selling drinks that, latte, at least, do not differ in terms of volume from each other. He took the video, which shows how a large portion of latte calmly placed into a glass for a typical serving (remember about the difference in price – 30 pence, a third of a pound, in terms of our today’s ratio it is 30 rubles!). Illustration >> the link
Video was quickly removed from Facebook, but the Internet remembers everything and The Independent published an article on this subject asking whether the company rips off its customers? The experiment was repeated on the same apparatus in another location with 100% matching results.
The company commented on this fact as following – ? 2.20 gives the buyer the opportunity to purchase 11 ounces of beverage in a standard 12-ounce glass, and for ? 2.50 and you buy a 14-ounce drink in a large, 16-ounce cup. “Underfill” occurs for security reasons – so that no one got burned. All is good, but the video just shows that a large glass serving doesn’t live up to 14 ounces – once she quietly placed in a 12-ounce standard.
Best of all this story sums up by one of the comments below the article – «Costa Coffee is included in the Whitbread group, whose revenues amounted to 2.294 billion pounds in 2014. I wonder how many of them were in “16-ounce cups?”.
We do not think that there were too muchof it, and in general it is rather a failure of almost perfectly tuned system. It happens.
Lemons and Lemonade
One of the crucial aspects in any business’ development is the conclusions that a company draws from its successes and, even more so, from its failures. We have before us an example of a successful deployment of CostaCoffee premium coffee business in several directions. Costa Express direction in terms of its concept and technologies is very close to how RusHOLTS does its business in Russia. However, our coffee corners use WMF equipment and cost, let’s say, a bit cheaper, but the result is, at the same time, at a very high level.
Of course, it would be interesting to compare RusHOLTS coffee progress and successes of Costa Express in a blind test. Not in the context of “whose espresso or cappuccino taste better?” – it is of interest at the level of “who is stronger – a whale or an elephant,” but in terms of the efficiency of logistics and IT-solutions applied to a given coverage area. Unfortunately this is not possible because Costa Express is not in Russia and RusHOLTS does not have any business on the territory of the UK or Canada. At least so far…
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