Tag: Alexander Kuzmin

Part 3. «Doing like everybody»

Dmitry Petrov: Me, as the top-manager who must make decisions, so far I’m just confused by your comments. To clarify the question: “Where do I begin to quickly improve the performance of my coffee business? What do the market leaders do in this matter?”

Alexander Kuzmin: A standard way for the Russian CEO would be “doing like everybody”, but, alas, it’s not always the right one. I can not advise you any approach from those that are currently used by the leading retail players of the fuel market of the Russian Federation (as of 2014).

Take, for example, the competitive selection of coffee beans, commonly produced in the largest Russian chains of filling stations. In my opinion, this is a clear indication of misunderstanding of the very essence of the coffee business in filling stations.

Now it looks like this: the organizers of the selection committee shall convene a tasting, which includes 5-6 casual office staff workers. Each of the contenders for the supply of coffee beans prepare drinks, the Commission is trying them and fills the scorecards. By the results Commission determines whose coffee is most delicious. Such a choice is still based on the criteria of “like – dislike” and on a small sample of unprofessional respondents. Often these random people have no idea about the rules and methods of coffee tasting. For example, one member of such “commission” had to call an ambulance after tasting as the “expert” seven cups of espresso cups and five Americano cups in a row. The man simply had a heart attack. And you want to rely on his assessment of thirteenth’s cup of coffee taste?

But the real absurdity of such tastings that you evaluate the taste of the drink obtained only on the coffee machine, which the applicant brought to you.

Even if you require applicants to use a machine, installed on your gas station, then any other coffee machine of the same model with a slight change of settings will produce drinks with completely different taste from the same coffee blend. And none of the managers is able to control what configuration has one or another coffee machine installed at the station. The stations are spread over hundreds of kilometers – who and how will check the identity of the machine settings and uniform flavor of coffee? How to assess compliance with the real taste with which bidder has won the competitive selection? So lots of coffee machines, lots of taste options for coffee drinks, and all these variations have nothing to do with the one that you tried during the selection and you have no means of monitoring the process, except to drive around the stations and try coffee yourself. What is the sense in such a tasting?

Now, about the criteria for selection of coffee beans. Typically, as the object of selection a vague notion of “coffee bean” is used, without specifying the parameters of the blend even by arabica-robusta ratio. Using this, cunning bidders from the “famous” coffee companies use a “premium” blend of 100% Arabica, which has the average market price of 1200-1400 rubles per kilogram, and after winning the tender they supply chain of filling stations with a blend containing 60% or more of Robusta with average market price of 600-750 rubles.

Dmitry Petrov: I agree, tenders are very often meaningless and are only used to “drag” the right bidder to win. So I’ll just ask – do I have to choose a supplier of coffee beans? If necessary, how to do it?

Ksenia Van de Kamp: Supplier of coffee beans has to be chosen. But you do not need to arrange any meaningless performances for that. You or your appointed managers should just select one of the possible suppliers of high-quality coffee beans, agreeing on the price of supplies. At the same time you should be aware that the “quality beans for the automatic coffee machines” is a special kinds of roasted coffee that are the same from year to year and the content of aromatic components is supported regardless of the constantly changing environment in which new crops are ripening in the regions of coffee growing. To do so, frying companies need to procure blends with regard to the content of aromatics in each acquired batch of coffee beans. I.e. company-applicant must have the volume of purchases equal to the thousands of tons of coffee per year – it’s the only way to provide the production of blends suitable for the use in automatic coffee machines without the need for constant adjustments to their settings.

With all the abundance of frying companies there are very few that can actually comply with this requirement – no more than ten in the whole world. First of all, it is the leaders of the world coffee market in terms of sales – Dow Egberts, Mondelez, Lofbergs Lila …

If you want to select a supplier of quality coffee beans – invite representatives of five world leaders to negotiate and define the supplier by a better quotation on the coffee beans for automatic coffee machines. For your network you must choose one, universal blend suitable for black coffee (espresso and americano) and coffee with milk (cappuccino, latte). Practice shows that the optimal composition of such a universal blend should have arabica-robusta ratio of 80/20.

Dmitry Petrov: Can I select from the Russian providers offering premium coffees at better prices? Or even change the vector, drawing attention to the so-called “fresh-roasted coffee”, widely represented in our market. Personally, I think fresh-roasted coffee is quite a good idea.

Ksenia Van de Kamp: Yes, you can. But then, the task of achieving the same coffee taste at all gas stations of your chain becomes impossible. Here in North America, it is not considered a “bad behavior” to show the consumer the weaknesses of your rival, so let me tell you straight – Russian suppliers of coffee in the HoReCa segment tend to offer their own brands of coffee blends masked as European trademarks and not-fitting for the use in automatic coffee machines. Non-fitting in terms of achieving the same taste of coffee drinks at all gas stations, regardless of their location.

(Note. In 2015 RusHOLTS made a special coffee blend for automatic coffee machines under our customer’s private label. 1,5 years before this round table we sought the development).

“The Secret” of ensuring the same fermentation of coffee beans – the purchase of a special blend from a major supplier. Uniformity of coffee machines settings can only be achieved with the help of remote monitoring – there’s no other way.

Remote coffee machines monitoring – Saving 2 billion. Part 2

By Alexander Kuzmin

On 06.11.2015

In Gas station chains - non-fuel businesses

Рart 2. You propose to replace “the art of the barista” by an automated technology? Part 1.
Alexander Kuzmin: Absolutely. Gas station caf? is not a glamorous coffee shop. Business of gas stations is a continuous-process model, in which customers have a clear request for the speed of service delivery and quality of products offered. The staff caters to the flow of the gas station’s customers hurrying about their business who want to spend a minimum of time to refuel their car and do not plan to “linger” in the limited space of a gas station. Therefore, making coffee at the gas station is “entrusted” to automatic coffee machines, despite their high cost in comparison with manually driven ones.

Ten years ago, “premium” filling stations segment had a brief period of time during which the leader of the Moscow market had tried to use manual espresso machine, but later abandoned it in favor of a super automatic one. For you, the quality of the coffee beans is primarily determined by whether it is suitable for the use in professional automatic coffee machines installed at your gas station.

Dmitry Petrov: Why do you talk only about super automatic machines? It seems to me that a good coffee is an “alive” beverage and it only should be made manually. At least, this is the kind of coffee I prefer to drink. This usually determines my choice of coffee. You propose to replace “the art of the barista” by an automated technology. Will the result of such a replacement instead of a fragrant invigorating drink be a taste that only remotely resembles the taste of a “real” coffee?

Alexander Kuzmin: Your question already contains part of the answer. At the station works personnel without any special training as barista. Making coffee manually is not a part of their job description, so gas station operators do not have neither time nor the necessary qualifications.

Short-term training for staff will not solve the problem, because it gives only a superficial understanding of the topic and does not provide results of equal quality drinks throughout the whole chain. Let alone of an equally high level of quality. Therefore, the only solution for the given conditions is the use of professional automatic coffee machine which is properly configured and capable of producing required quality of the beverage in the required amounts with minimal staff’s participation in the preparation and service of the coffee machines.

Ksenia Van de Kamp: Business of selling coffee is based on repeated purchases. We, in the US market, see that the mass consumer is inclined to assess the quality of the coffee only in terms “tasty – tasteless” or “like – dislike”, so competitive opposition is won not by the one who beautifully describes the wonderful taste and quality of a coffee blend, but by the one who offers the solutions allowing to form in consumer’s mind a steady clich? “at gas station of this chain they always serve a delicious coffee” or even better – “coffee – it’s that particular gas station”.

Probably for this reason, among the participants of our round table there are no traditional suppliers of HoReCa, whose marketing is based on a long and futile arguments about the “unique” properties of coffee beans offered by them, which the end user is often simply fail to appreciate. We are focusing on another issue – how to ensure the quality of the coffee at all stations of the chain, to ensure repeatability of taste, in fact – how to make the customer think that it was at the stations of the given chain he liked coffee the most. And not to disappoint in this sense. After all, only 5% of visitors to the cafe at the gas station can be classified as true gourmets, who already know in which coffee shop their own personal coffee “guru” work and perceive gas station coffee as a reasonable compromise. The remaining 95% of customers are not interested neither in geography of coffee grains from which a purchased drink is made, nor in the sacrament of roasting. Even the starting year of manufacturer’s coming into market doesn’t matter. At the heart of their interest is still the same taste and smell of the coffee, as well as the ability to quickly get a flavored drink and be on their way.

By the way, the same demands to coffee are generated by office workers who can not leave their posts for a coffee break. Perhaps that is why it was so easy for us to work with Artem’s company – IT-specialists have always loved coffee and know the price of automatic systems. Our proposal to work on the remote device for management systems to ensure the quality of the beverage in the caf? at the gas stations was accepted with predictable enthusiasm.

Remote coffee machines monitoring – Saving 2 billion… Round table in the office of RusHOLTS

By Alexander Kuzmin

On 29.10.2015

In Gas station chains - cafe, RusHOLTS

Рart 1. The secret of success are not the coffee beans, but the type of coffee machines and proper setting

Much has been written about the gas stations – it is a unique segment of the market, interest in which won’t disappear as long as there is a need to fill cars with the fuel. According to the standard classification businesses of any gas stations network are divided into two main categories – fuel (fuel) and non-fuel (nonfuel) ones.

“Cafe at the gas station” not only creates the “atmosphere” of the gas station, but also has a huge business potential that has yet to open on the Russian market. Indicative is the experience in Europe, where sales of non-fuel products account for about 60% of the overall gas stations’ profits. The Russian players have this figure in the range between 5 to 20%. There is some work to be done.

Interestingly enough, gas station is the only place where the business linked with the global product №1 (oil and oil-based products) is closely related to the business linked with global product №2 – coffee. So it is not surprising that these two businesses, each in their category are the main sources of profits for gas stations. Without going into the intricacies of stock prices and the prices of green coffee beans, we decided to discuss the development of this category in the domestic market and to answer the question of how the modern Russian gas station managers might enhance the effectiveness of coffee-related businesses of their chains.

This round table was attended by:

Alexander Kuzmin – an expert who has spent more than 20 years in non-fuel businesses in Russian and foreign gas station networks;

Ksenia Van de Kamp – managing partner of BMS (USA);

Artem Astafurov – Managing Partner, Senior Vice president of DataArt (USA);

Moderator – Dmitry Petrov;

Dmitry Petrov: Today we have a rather unusual audience to talk about coffee – there are no famous barista or traditional suppliers of coffee grounds for HoReCa market among us. Instead we have an expert on non-fuel businesses for gas stations, innovative marketing specialist and IT-manager of a global level company, a rather peculiar team of participants to discuss a business, traditionally surrounded by an aura of mystery and magic of coffee aroma. Don’t you think?

Changing the world for better... at least the world of gas stations)

Tag: Alexander Kuzmin

Remote coffee machines monitoring – Saving 2 billion. Part 3

Remote coffee machines monitoring – Saving 2 billion. Part 2

Remote coffee machines monitoring – Saving 2 billion… Round table in the office of RusHOLTS