The following content originally appeared in issue 62 of Cooler Plus, which you can subscribe to here.
Cooler Plus spoke to one of the leaders and innovators in workplace coffee – Aequator AG owner and former European Vending Association president Arnaud van Amerongen.
Aequator was founded in 1933 and has manufactured and supplied Swiss quality coffee machines for over 80 years. Where are these machines available today and where does Aequator stand in the European coffee machine market?
Until the 1990s, Aequator only produced small quantities of heavy duty Horeca (restaurant) machines which were sold in a radius of 50km around the factory. Directly from factory to restaurant!
Through a collaboration with a Dutch manufacturer of vending machines, new technology (soluble) and market access to offices were obtained. This lead to a widening of our product range with office machines and we started to export. We focused on local partners, roasters OCS/vending companies to sell, market, install and service our machines in their markets.
Today we are selling in around 20 countries, predominantly to Western Europe, the Nordics, Switzerland and Austria, but increasingly also Eastern Europe, South East Asia, China, Japan and Australia. Our two strongest countries are Holland, through our own subsidiary and sales office, Coffee First, and the UK, through our very successful importer SwissMadeCoffeeMachines in Manchester.
With our newest innovations on hot chocolate preparation and milk frothing, we are rapidly widening our geographic footprint. These machines can compete globally through a unique set of innovations, in-cup quality and total cost of ownership. For a Swiss manufacturer, these are the critical values to focus R&D on, in order to be successful in this highly competitive global arena. Swiss quality, another important virtue, is in itself not enough. Quality isn’t a guarantee for success; merely a condition.
In terms of coffee in the workplace, what have been the biggest changes and challenges in the past decade?
It would be impossible to sum up, even only for Europe. The coffee culture is extremely fragmented, and so are the trends. By and large one can say there are three international trends that we think have had the most impact, and still have:
1) Decentralisation of coffee systems in the workplace.
Many smaller units, closer to the workers, compared to large capacity, centrally located, vending machines. This is evidenced by the growth of table top systems and the stagnant market for freestanding vending machines.
2) Premiumisation of the coffee offering.
After the penetration of espresso based milk speciality drinks in the Horeca market in the 1980s and 90s, this quality coffee demand penetrated the household market. Many capsule based systems and fully automatic retail espresso machines from Italy, Switzerland and Germany entered the market in the past 10 years and elevated the average coffee drinker to a new aspirational level of coffee at the office. This was further funnelled by Horeca coffee roasters/brands that discovered this niche in the workplace too, as they could sell at Horeca prices there.
3) New competition to vending in the most attractive segment: coffee at the workplace.
The vending channel, which dominated the workplace, wasn’t very responsive to these changing market conditions at all. New entrants from retail and Horeca saw the opportunity to try and occupy these newly created niches.
For Aequator this was just perfect as we had our roots in the Horeca market anyway, we speak the same language as these roasters. Our vocabulary is largely based on how to achieve the best possible in-cup drink quality, whereas this culture is difficult to find with the traditional vending machine manufacturers.
Aequator uses the slogan ‘coffeeculture’ – what is at the heart of the rising popularity and success for coffee in the workplace?
In the office, and the world of office machines, there is no such thing as a copier culture. Let alone in humidifying, air conditioning, refrigerating, computing, etc. With coffee it is fundamentally different. The way people drink coffee varies from country to country, from region to region. The way employers handle the cost, varies a lot too. Free vend, partly subsidised, fully paid for by employees etc.
And coffee offers energy, intimacy, social interaction, comfort, in other words: coffee is emotion. Drinking coffee therefore turns into a unique experience, and that makes value more important than cost. To be successful, we need to respect and understand these local coffee cultures and its specific demands.
Aequator offers a wide range of machines suitable for a variety of different office applications. Which are the most popular?
All our coffee machines have identical technology behind the façade. We can’t jeopardize in-cup quality, so we use the most expensive, highest possible quality grinders and pumps. – and our unique water heating technology. To differentiate the machines we have many liveries: external features and functionality. For instance: one or two grinders – in Horeca a given (or even three), but in the office only to be seen in Switzerland and Norway. Or user interfaces; hard keys, capacitive touch screens, resistive touch screens. Or full blown TFT screens with swiping, narrow casting, telemetry etc. Or dispense height: vending focus means jug filling which requires a higher dispense height and vending image. If you only brew cups, you can approach Horeca design better with a double outlet. The jug filling we primarily see in the Nordics and Netherlands as a heritage of the perishing filter coffee culture.
Following the advent of smartphones, we also see a strong increase in demand for touch screen user interfaces.
Most of your machines are able to be customised to match corporate identities. Do most customers request this?
We offer this high level of differentiation for two reasons:
1) We want different machine designs for different dealers/roasters so they can differentiate between each other, but only alter the external features and designs. This allows Aequator partners to have qualitative arguments in consulting with their customers. We want our dealers to make good profits with our machines for long lasting partnerships.
2) In most countries we only have only one or two partners. Our wide range allows them to differentiate to sub-distributors and key accounts, upselling within their own range etc – without exploding service requirements, as the service technician will understand this machine and have spare parts on board too.
Some of our partners will customize individual machines for individual clients, but that is up to them.
You also manufacture coffee, hot chocolate and soup machines. How popular are these against the traditional coffee offering?
Our coffee machine range is now largely focused on the premium office market, whilst our roots are in the Horeca market. With our unique boiler technology and knowledge of dry and wet soluble systems, we saw a good opportunity to re-enter the Horeca market by focusing on niches. We considered ourselves not to be large enough to go head to head in competition with our primarily Swiss colleagues with fully automatic espresso machines with fresh milk. We instead were able to develop unique, dispenser type machines, including our latest game changing machine Lattiz: a revolutionary milk frothing machine that doesn’t require any cleaning. The first in the world!.
We developed this concept for FrieslandCampina, one of the largest dairy companies in the world. We will launch Lattiz in the UK at Caffè Culture show in London through our importer SwissMadeCoffeeMachines and I’m sure it will alter the UK Horeca market significantly, as in Holland and Belgium, where Lattiz was launched more than a year ago.
When a manufacturer develops new machines, this implies cannibalisation of existing sales. In our case, this particular widening of our range has led to 100% incremental growth. In the past seven years we were able to nearly triple the size of our company, despite a severe economic crisis and two Swiss Franc exchange rate explosions.
The Brasil ASD claims to be the first multimedia coffee machine which shows films and pictures in any order. What was the inspiration or customer research behind the development of this machine?
Being the significantly smaller company that we were back in 2009 when we launched ASD (Aequator Smart Display), we didn’t have any budget to conduct market research. We decided on gut feel, on intuition, to develop ASD in 2007-2008. With hindsight, we were too early. The idea was to generate advertising income through the screen. We were targeting these machines at self serve ‘coffee-to-go sites, such as filling stations, and implement narrow casting. Although you have undivided attention of the consumer for 30 seconds, the marketing managers of the brands considered the quantity of interactions too small. The cost of 12” touch screens and GSM telemetry were too high at the time to earn back with advertising. But it was not for nothing: we found ASD to be very useful for other functions – running films, presentations, and programming through the screen.
Aequator has a reputation for quality, reliability, safety and consistent delivery of perfect coffee. Your unique ‘hot start’ system creates perfectly hot coffee from the very first cup; your ‘hygo-milk’ system keeps bacteria away, while reducing maintenance and cleaning; and your ‘quali-control’ system guarantees excellent taste through control of the grinder and automatic adjustment of grinding and brewing times. How long did it take to deliver this combination of systems which support customer loyalty and is there still more to be done?
We are mainly driven by in-cup quality. My partner and co-owner Manfred Meyer is passionate about this. He ran Aequator for 40 years, until the 3rd generation took over. The individual technologies that you describe, are the result of 15-20 years’ focus on drink quality. We continue to study beverage preparation processes, whether it’s beans, liquid concentrate or instant ingredients and develop new technologies to continually improve.
A good quality drink makes consumers come back to the machine, not the price, nor the brand.
The area that lies ahead is development of milk frothing technologies. We were one of the first to launch dry milk (topping) solutions and are convinced we will be able to lead this change with the new Lattiz milk technology.
You offer a ‘private label’ option. Is this becoming more important or is the ideas of creating a bespoke coffee offering for individual companies still in its infancy?
Consumers relate more to coffee brands than machine brands when it comes to impulse buying and trust. Coffee is emotion, unlike the fully automatic espresso machine. The Swiss Flag – Swiss Made sign obviously also radiates trust, so we have both brands on each machine. In some cases, particularly with large retail brands, and when serious volumes apply, these brands demand exclusivity. This is definitely a trend and has led to the situation where these brands develop their own machines and have them assembled by subcontractors without any base in hot beverage machine manufacturing.
Environmental sustainability is close to the top of the agenda for many companies. Where is Aequator in its sustainability journey?
We never see older machines coming back to us. They usually get another life with the existing dealer who will use it for many years as a rental machine for smaller customers. After that, the machine will often enjoy another life in Eastern Europe. This is not represented in protocols or sustainability indexes, but is important compared to disposing of the machine after 4-5 years. True sustainability!
Having said that, we also focus strongly on energy saving. Both in the factory, as well as in our machines. Aequator won the energy price of the city some years ago as we implemented energy saving technology in our factory: the cooling of our laser cutting machine is used to heat the building throughout the year. Furthermore, we have the most efficient boiler system in all our machines and water heating consumes by far the most energy in hot drinks machines. This enables us to have energy label A on most of our machines, without a stand by function.
You are a former president of the European Vending Association. What are biggest changes you have seen in the vending industry in the past five years?
Growth for tabletop systems at the cost of freestanding vending machines. This will continue. It has caused new entrants from the household industry, as well as roasters from the Horeca industry. This caused new rivalry, but not necessarily more price pressure. It changes the focus to increasing the emotional and experiential side of the office coffee offering.
We see the need for easier payment, and avoiding cash. Mobile payment, QR codes, credit cards etc will also funnel growth of telemetry technology. We foresee a future for our industry in the Internet Of Things – all machines will be online in the not too distant future.
Finally, what’s next for Aequator?
Innovation is critical. We will widen our product range with coffee machines for other target groups, becoming the ultimate one stop shop for bean to cup and other hot drink Horeca machines. We will launch these new ranges at the Host show in Milan in October 2017 – to which all your readers are invited!
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