Many office coffee service (OCS) operators were hopeful that 2020 would be a glitch on the radar and that office populations would return to near 2019 levels. However, data from the 2021 Automatic Merchandiser State of the Office Coffee Service Industry Report shows a slower-than-expected recovery. Respondents who took part in the survey shared some positive office coffee trends that should help the upward trajectory. Operators are finding ways to meet the demands of employers who are looking to entice employees back to the workplace.

OCS Revenue

For OCS operators, 2021 was a year full of hope, but ultimately, empty promises. Operators kept hearing news that employers would be bringing their workers back – first it was after Easter, then after Memorial Day, then after Labor Day – but it never really happened, especially in downtown offices. Each time there was a new variant or a spike in cases, employees dug in at home, and for the most part, employers did not put up a fight, except for industrial locations, which were clearly better for operators.

The OCS revenue data speaks for itself, according to Automatic Merchandiser’s State of the OCS Industry Report: In 2019, $5.97 billion. In 2022, $1.5 billion. In 2021, $2.05 billion.

The report shows that while 75% of OCS operators experienced an increase in sales, the jump was minimal compared with 2020 sales. As bad as 2020 was, those numbers were helped by pre-pandemic Q1 sales. Working at home clearly had an impact on sales, and the 2021 report supported that.

Key Statistic: Big Locations Became Smaller

In 2021, a popular mantra for those studying workplace populations was: “70% is the new 100%.” Most operators, especially those in once-coveted downtown locations, would have been thrilled to have 70% of the employees back in the office.

From the 2021 State of the OCS Industry Report, the number of workplace employees (as a percent of accounts) showed:

• 30–49 employees: 13.6% in 2019, 21.7% in 2020, and up to 26.3% in 2021.
• 75–99 employees: 22.7% in 2019, 13.1% in 2020, and down to 10.5% in 2021.

Emerging Trends

Operators who took part in the State of the OCS Industry Report shared some positive trends that emerged in workplaces. It was all about enticing employees back to the office, and those positive trends appear to be carrying over to 2022.

Local Roasts

Judson Kleinman, of Corporate Essentials in New York, pointed to locally roasted coffee and fresh ideas as an important trend. “All the people that we deal with, whether it's facility managers, HR, CEO, purchasing, they're all looking for interesting ideas to help encourage people back to the office. Being creative and looking for new ways to do things is essential to keeping the accounts engaged with you,” he said.

Must-Have Items

Arthur Siller from Evergreen Refreshments noted that “nice-to-have” items transitioned to must-have items in 2021 and into 2022. Siller said that because employers want the breakroom and the coffee service area to be a destination, he sees a trend toward the importance of broadening product offerings, a focus on bean-to-cup units and an increased demand for sparkling water.

Keeping Employees Happy

Employers are turning to equipment and products to elevate the office refreshment amenity to keep employees happy. Dave Mandella, VP of sales at American Food and Vending, said the strong return of cold brew, the appeal of new brewer technology, the demand for high-end water solutions and the growth of ice machines are all positive trends.

“We are also seeing more interest in delivered snacks and beverages as part of the OCS program – pantry service on a smaller level,” Mandella added.

Coffee Bars – The Next Move for OCS Operators?

As employers seek to entice workers back to the office, industry consultant Steve Closser, of Translucent, has been a long-time advocate of convenience services operators moving into an expanded foodservice role. A natural extension of this idea for OCS operators: setting up a coffee bar within a major location. According to Closser, this would not only capture lost revenue but would also allow operators to capitalize on what employees really want at work and what they are currently buying elsewhere.

Steve Todd, who leads Open-Sourced Workplace, a “community for business owners and workplace professionals seeking to share knowledge, insights, and experiences about work,” is a firm believer in the value of coffee bars in the office.

“Today, with the emergence of coffee culture, having a barista in the workplace is not just a mark of tasting coffee, but also a perfect example of a great work culture. Many businesses across the world are embracing an appreciation for great coffee by hiring baristas to their operations,” he wrote in a recent article

Closser believes that OCS operators should seriously explore the idea of providing a barista for key clients, especially if amenity-hungry clients are willing to pay for it. Closser said he has seen huge success with a barista setup, an attended coffee bar, positioned next to a micro market.

“It is all about convenience and saving time,” Closser said. “The employees have their favorites – they can order ahead on an app, from the car, they walk in the front door, they get their coffee, and it is already paid in full. They get a scone and a cup of coffee from you. They just now spent $7 or $8 dollars. If 100 customers a day do that, it is quite profitable. As the operator, you just need to provide one employee for a four-hour shift.”

Read more on office coffee service trends at Mondelēz International’s insights channel