Macchiato, cappuccino, latte or kopi-o?

Home-grown Owl International, better known for its three-in-one coffee offerings, is planning to launch single-serve kopi pods to grab a portion of the global coffee-in-a-capsule market. SHERWIN LOH reports

Mr Richmond Te, group assistant general manager of Owl International, with a range of Caffe Cagliari products.
Mr Richmond Te, group assistant general manager of Owl International, with a range of Caffe Cagliari products.PHOTO: OWL BEVERAGE SPECIALIST

Watch out Coffee Bean & Tea Leaf and Nespresso. Home-grown kopi company, Owl International, is planning to launch single-serve coffee pods that will spit out a hot cup of kopi-o at the press of a button.

The recent darlings of the coffee guzzling crowd, single-serve coffee pods yield shots of espressos that can easily be turned into complex concoctions such as macchiatos, cappuccinos, lattes and flat whites, with the addition of steamed and foamy milk.

These pods usually work with specialised brewing systems or machines. The popular ones include Nespresso, Keurig's K-Cup, Dolce Gusto and Caffitaly.

While the pods and machines are not compatible across brands, there are third-party makers who produce pods for the different systems.

Owl International's group assistant general manager, Mr Richmond Te, says that the problem is that none of these companies represent local coffee and flavours.

"Why are we seeing lattes and cappuccinos in cafes, but not Asian coffee? And that is how we started toying with this idea," explained the 30-year-old.

The development for this product line started earlier this year, and the company says it expects to launch its brand of compatible coffee capsules by the second half of the year.

It has not decided if it will make pods for a single brewing system or across multiple systems.

"We have explored several systems and we have been struggling to find the right one, and I think we've got it. What we are focusing on, is bringing the local coffee culture into a single-serve capsule, which no one has done before."

It has not been tried before because of the way coffee beans are roasted here, using sugar, butter or margarine.

"Locally, we caramelise the coffee with sugar. It's a bit tricky because you have to control the roasting time. If you caramelise it too long, it burns. If you do it too soon, it turns sour," explained Mr Te.

The company also has to consider the extraction process and pressure pump used by existing machine systems, to ensure they can reproduce the unique flavour of local coffee.

Mr Te said they went to Ipoh, Malaysia, to talk to roasters who have been doing it for 60 years and who still do it manually, in order to put this process into a capsule.

The idea of creating a capsule system of their own, or appropriating an existing one to fit their needs has come up, but the immediate focus is on making the pods.

The Owl brand is better known for its three-in-one supermarket coffee offerings. The move towards capsule coffee is Owl International's push to grab a portion of the estimated US$10 billion (S$13.3 billion) coffee-in-a-capsule market globally.

To get ready to introduce higher-end products in cafes, restaurants and hotels, Owl recently signed a deal with Italian coffee company, Caffe Cagliari, to distribute its range of coffee products in Asia.

This includes its Nespresso-compatible single-serve coffee pods, as well as its Carina single-serve coffee machine, which will also work with Nespresso pods.

For all family members

"In a family, you have different generations. Some like their kopi-o, while others like their capsules," Mr Te pointed out.

"What we are trying to do is find the right system for the whole family. Which is why our capsules are coming, why we have the three-in-ones and why we tied up with Cagliari," he added.

While prices for the Nespresso-compatible pods will be on a par with Nespresso's own, the Nespresso-compatible Carina coffee machine, which comes with a milk frother, is priced at $199. Nespresso's entry level Inissia model costs $238.

Although Nespresso is credited with popularising single-serve capsule coffee machines and pods, its patents are expiring. This has prompted other companies to come up with their own capsules.

This is also why an increasing number of cafes, restaurants and hotels are introducing capsule coffee drinks, instead of employing a barista to make the coffee.

Mr Matthieu Pougin, country manager of Nespresso Singapore, points out that while there are competitor capsules in the market, they are made using a combination of plastic and aluminium materials.

Nespresso remains the only one that makes aluminium capsules for which its machines are originally designed.

This works in tandem with the company's recycling programme, where the coffee grounds are used as a natural fertiliser at the local Quan Fa Organic Farm, and the aluminium is sent to be re-used in products such as window frames.

"The use of these capsules does not invalidate the warranty. However, consumers need to be aware that defects or dysfunctions resulting from the use of such coffee capsules are not covered by the warranty. Nespresso will repair the damages caused by generic capsules in our machines, but it will be at the cost of the consumers," said Mr Pougin.

A version of this article appeared in the print edition of The Straits Times on June 24, 2015, with the headline 'Macchiato, cappuccino, latte or kopi-o?'. Subscribe