#1632 / Do you like American Coffee ?

 Coffee is a consumer product staple throughout the world. In the states, we have our cup of Joe, but American Coffee is not a brand name, but Turkish or Italian coffee is a brand name. Most of us consume a couple of cups a day, and we do have our favorite drive thru we frequent. Americans consume large amounts of coffee – 16 ounce cups two or three times per day. Our coffee gives us the pickup we need, and we are loyal to our brand. It may come to a surprise to you that most coffee drinkers from other countries consider American coffee to be weak and have to be drunk in large volume. Foreigners believe American Coffee is weak and tasteless.
The way we brew our coffee has evolved over the last few years. Gone are the days of brewing a whole pot of coffee, today we have single serve coffee makers that can brew a cup in a matter of minutes. Years ago, we would buy coffee by the pound, or multiple pounds, and never gave the smaller coffee companies a chance, because we did not want to get stuck with pounds of unwanted coffee. Keurig was the trailblazer in the industry. They offered the brewers at reduced prices hoping to attract and retain users for their K-cup pods. The product was an instant success. Just pop in a K-cup pod, push a button, and within minutes you get a hot cup of coffee.
With the popularity of the K-cup came a wide range of flavors. Consumers purchased flavors ranging from cinnamon to peanut butter. The more popular flavors were hard to keep in stock at retail. The Keurig became an overnight sensation, and transitioned from the home to the office.
The new coffee makers changed not only the American coffee culture, but also the industry and affiliated businesses. The Keurig allowed the consumer to try an assortment of coffee flavors. No longer did Americans have to buy their coffee by the pound. This opened up new business opportunities for the smaller coffee brewers. Keurig’s success allowed smaller coffee brewers to introduce some of their coffee selections to the U.S. market.
So, what does all of this have to do with the electronics industry? The new generation of coffee makers created business opportunities for the electronics industry. Traditional coffee makers did not have many electronics other than timers because of their simple mechanisms, but the new coffee makers have many functions, and use relatively complicated circuit boards with many semiconductors and various components that include heaters and sensors. They need to be heat resistant and water proof, and have UL certifications. The market size may not be as big as the market size of smart phones or game consoles, but it still generates business opportunities for EMS companies.
Coffee manufacturers retooled their facilities to update their grinding and packaging machines. This generated business for machine manufacturers and material suppliers. Packaging subcontractors also got a piece of the pie.
The retail environment changed as new plan-o-grams for the coffee aisle reset to add the new K-Cups. The space allocated to these coffee pods continue to increase month over month
The K-Cup has made its way into our homes, but coffee connoisseurs aren’t as quick to transition over. I may take more time to establish the new brand image of American Coffee. But this small coffee pod changed a little bit of our coffee culture, business and industry in the U.S

Dominique K. Numakura, dnumakura@dknresearch.com
DKN Research, www.dknresearchllc.com

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Headlines of the week
(Please contact haverhill@dknreseach.com for further information of the news.)

Siix (EMS company in Japan) 10/28
Has decided to found new manufacturing subsidiary in Hungary for European region. The new company will conduct assembling of electronic components.

YASKAWA (Major electric equipment manufacturer in Japan) 10/31
Has rolled out a new clean robot series “MOTOMAN-MH5BM for medical and biological applications.

Shin-Etsu Chemical (Major chemical company in Japan) 10/27
Has invested 50 billion yen to expand the business of silicone rubber and relating technologies. Shin-Etsu had over 50% market share in Japan.

Murata (Major component supplier in Japan) 10/31
Has signed for the acquisition agreement of the secondary battery business with Sony.

Sumitomo Metal Mining (Major non-iron metal supplier in Japan) 10/26
Has decided to invest 18 billion yen to expand the manufacturing capacity of cathode materials for the secondary batteries for automobile use.

Kaneka (Major material supplier in Japan) 10/27
Has achieved the highest conversion rate (24.37%) with crystalline silicon base photovoltaic cell module.

Toshiba (Major electric/electronics company in Japan) 11/2
Has developed a new photo/electric conversion process. It converts carbon dioxide to ethylene glycol with 0.48% conversion rate.

Fujitsu (Major electronics company in Japan) 11/7
Has developed a new photosensitive material that makes conversion rate of photosynthesis with solar energy higher.

AIST (Major R&D organization in Japan) 11/7
Has developed a new super engineering plastic “PEEK/SGCNT Hybrid Material” adding CNT. It has the highest mechanical strength with heat resistance.

Toshiba (Major electric and electronics company in Japan) 11/8
Has agreed with Western Digital to make a new building for the expansion of new 3D flash memory devices.

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