Coffee Planet recognises international growth prospects for coffee on-the-go
Having expanded its fresh coffee vending machines into a wide variety of venues around the UAE, Coffee Planet is targeting other countries including the UK that will pitch it up against the vending offer of Costa Coffee. By Glynn Davis
Ahead of speaking at The Retail Bulletin International Expansion Summit 2013 on March 26th, Mike Scully, founder and director of Middle East-based Coffee Planet outlined his plans for expanding his on-the-go offer around the globe bringing his business to the UK and Europe.
After copying the UK-based Coffee Nation vending model (since acquired by Costa Coffee) Scully expanded the concept around the Middle East where he says it has “grown into a multi-faceted business” that has diversified into office locations, retail stores (including Carrefour), Universities, and is also in IKEA stores as a white-label proposition.
The diversification was driven to some extent by the “struggle” to get critical mass from the machines, which he puts at 50 cups per day in the Middle East. This is break-even level, which makes those machines in the portfolio that deliver 300 cups per day very lucrative.
The appeal of the machines is their production of high quality coffee from fresh milk and fresh coffee beans. This has made them attractive in markets where there is a shift taking place away from tea drinking and this has led Scully to expand into countries including Indonesia, Malaysia, Pakistan and Oman.
“The coffee bars have led the way and on-the-go makes it [high quality coffee] accessible to more people. The machines now create the finest foams, which are marginally below barista quality, and they require no staff and no training,” he says
Unlike opening coffee bars he says vending machines are much more “low risk” especially when operated at a multi-site level as the inevitable tail of lesser performing units will then be more than offset by the better machines. Scully believes this makes Coffee Planet an exciting proposition for the business partners that he works with to roll out the machines into new locations.
The deal with partners is on a profit share basis, and since they can also contribute to the capital cost of the machines there can be a different split of the profits dependent upon the individual deal. Scully says the ideal partners are logistics suppliers who visit high footfall locations such as hospitals etcetera and can therefore deal with the daily maintenance that the machines demand.
They need to be filled with fresh milk and beans daily as well as requiring frequent wipe downs. They are sufficiently intelligent to close down if they have not been cleaned. The key difference between similar units in the UK is that the Coffee Planet machines accept cash payments whereas rival devices require payment to be made to the establishment housing the machine – whether that be the retail store or garage forecourt operator.
This undoubtedly provides greater flexibility in where Coffee planet units can be sited and as such represents an opportunity for expanding the proposition in the UK, according to Scully.
He also points to the recent development of an app that enables coffee drinkers to set their preferences on their mobile device, which can then be transmitted to the next generation Coffee Planet vending machines - via Bluetooth – which will shortly be available.
“We are looking at targeting the UK and Europe as we’ve a number of USP’s and there is a gap in the market,” he suggests,
You can Interact with top-quality speakers at the Retail Bulletin's 2nd International Expansion Summit 26th March 2013.Confirmed speakers include George International, Bench, Costa Coffee, Mothercare, The Hamleys Group, Alliance Boots, Austin Reed, Hobbs, Coffee Planet, Icon Live, Codex Global, The Javelin Group, Field Fisher Waterhouse LLP, Ogone UK and Codex. The event is designed for UK retailers who are planning for or are developing an international growth strategy. Register now to secure your place.
Email this article to a friend
You need to be logged in to use this feature.
Please log in here