As hoteliers are increasingly choosing single serve coffee for guest rooms and public areas, the capsule coffee industry is getting increasingly competitive, learns Rebecca Lo.

Once upon a time, the only way for hotel guests to get a decent cup of coffee was to order room service or head for the nearest café—and hope for the best. Instant coffee with powdered creamer was de rigueur even in 5-star guestrooms. For anyone who reaches for a cup of java before getting out of bed or in a rush to prepare for early morning meetings, the advent of single serve coffee must seem like a godsend. A slick marketing campaign boasting George Clooney helped put industry leader Nespresso on the global map. Yet as DIY single serve coffee permeate from high end residences into the hospitality market, more players are entering the field. Cuppaz, Franke, N&W Global Vending and Bon Café are among the newcomers muscling in on Nespresso’s Asian territory. Owners and operators now have a wealth of choice when it comes to capsule dispensers and products to suit different budgets, décor and brand narratives.

He Had a Dream

Nespresso originated with a classic eureka moment: Nestle employee Eric Favre came up with the single serve capsule coffee idea while on holiday in Italy enjoying an espresso. In that instant, he felt that the high quality of a barista produced cup of coffee should be available to anyone at anytime, and subsequently patented the Nespresso system in 1976. The concept is simple: akin to an open bottle of wine, coffee deteriorates when exposed to air. Hermetically sealed coffee portioned for individual cups allows each serving to be as fresh as possible, as air reaches the grounds only after they are pierced just prior to brewing.

As the very nature of single serve coffee implies that anyone able to press a button can indulge in excellent brews, it is ideal for self serve scenarios such as hotel guestrooms, all day dining buffet lines and break out areas adjacent to meeting rooms. Though Nespresso is popular with the domestic market, it offers plenty of B2B solutions for hotels. “In general, our partners use our classic B2C—or in home—machines in their guestrooms while for banqueting and F&B, they use our professional range,” reveals Roger Staeheli, country manager for Nespresso Hong Kong and Macau. “In Hong Kong, they use Nespresso B2C machines in all guestrooms, not just for the premium suites. As consumers become ever more knowledgeable and discerning about coffee, hotels and restaurants see premium coffee offering as a means of differentiation. As such, Nespresso partnered with Hong Kong’s leading luxury hotel groups such as Four Seasons, Mandarin Oriental, The Ritz-Carlton and Shangri-La.”

New Kid on the Block

Nespresso’s patents began to expire in 2012, allowing competitors to enter the lucrative single serve market. Founded in Hong Kong by Marcel and Sandra Corbeau in 2015, Cuppaz brings multi beverage capsule technology and Brazilian coffee sourced from sustainable farms to Asia. “The machines have both high and low pressure options, meaning that they can produce not only espressos but also other beverages such as tea,” notes Sandra Corbeau, Cuppaz’ co-founder and business development manager. “Even though the consumption of coffee is on the rise in Asia, there is still a significant group that don’t like its taste and instead embrace tea or other types of warm beverages like hot chocolate. Since Marcel helped the team of 3Corações coffee company’s Caffitaly Systems multi beverage technology in Brazil, it seemed only logical to introduce this to Hong Kong.”

Just under half of Cuppaz’ business comes from the hospitality industry, with Hong Kong properties including Hotel Panorama by Rhombus and Hotel Burlington using its machines in guestrooms. “Our smaller machines, such as the Curve, are used in guestrooms,” notes Corbeau. “Once a business has decided that capsules are a good solution, many will pick us over our competition for four different reasons: multi-beverage offering, taste and quality, service and price—based on published machine prices on Cuppaz’ and Nespresso’s websites, our in room machine is 11 percent less expensive. We estimate that Cuppaz capsules are 10 to 15 percent less expensive for in room use.”

Cream of the Crop

Both Staeheli and Corbeau acknowledge that Asians prefer their coffee with milk, and espresso or other strong coffee blends are their most popular hotel products. “Nespresso coffees with high intensity, such as Ristretto, perform well in the hospitality industry as they pair well with milk,” Staeheli states. “In Asia, the majority of our customers prefer adding milk, cream or soy milk to their coffee. Perfectly equipped to meet local tastes, the Aguila 420 and Gemini CS 221 Pro machines can create flawless hot and cold milk coffee recipes, such as flat whites, iced cappuccino and latte, at the touch of a button.”

With sustainability more than a mere buzzword in the hospitality industry, Cuppaz made sure that both its coffee and the capsules that contain them are as green as possible. “Both the top film and the capsule bottom are made of recyclable plastic,” Corbeau explains. “Used coffee grounds are also fully recyclable as compost. And we plan on investigating biodegradable capsule options. We are proud that our Brazilian coffees are from sustainable farms—they collect compost, they recycle, they plant trees and treat the earth in a sustainable manner. Also, our machines use 80 percent less energy than traditional bean machines, and they all have an energy saving feature. We believe all these things help to address environmental challenges and reduce our carbon emissions footprint.”

Old Becomes New

Made from aluminium, Nespresso Grand Cru capsules are completely and infinitely recyclable. “The Nespresso capsule recycling system makes it as easy as possible for our Business Solutions customers to return their used capsules,” elaborates Staeheli. “Once collected, the aluminium capsules are separated from the used coffee grounds and re-melted to become new aluminum products. Nespresso Hong Kong partners with local farm, The Hong Kong Organic Waste Recycling Centre, to repurpose the used coffee grounds from recycled capsules as compost for vegetable farming.”

Despite the stiff competition, the future looks promising for single serve coffee brands. “Hotels continue to recognise that consumers are looking for a certain standard of coffee,” Staeheli remarks. “We will continue to focus on delivering our unique coffee experience to consumers by offering top quality Grand Cru coffees, smart and stylish coffee machines, and personalised, professional customer services.”

“We expect to see more hotels considering coffee capsule solutions as capsule and machine prices are dropping,” Corbeau believes. “Beverages can be used to personalise the guest experience. Imagine that you just checked in and your favourite Cuban single origin espresso is handed to you—complementary—together with your room key. That’s differentiation and service.”