VALPARAISO | People used to favor drip coffee they brewed themselves or grabbed at a gas station on the way to work.
Then Starbucks percolated a taste for fancy espresso drinks. Convenience stores, however, kept the same old pots of lukewarm coffee on the burner, even as customers started lining up for venti mocha frappuccinos instead.
Valparaiso-based Family Express has rolled out a virtual barista machine that makes premium espresso drinks and is being hailed as revolutionary by trade publications. Phrases such as "sea change" and "Lamborghini of espresso dispensers" have been thrown around.
"This is essentially self-service Starbucks," President and CEO Gus Olympidis said.
Family Express has installed the new JAVA WAVE European Cafe at its 62 locations throughout Northwest Indiana. The self-service touch-screen machines are similar to the Coca-Cola Freestyle soda fountains that have been popping up at more and more restaurants, and make both hot and cold drinks with freshly ground espresso beans, sugarcane and Family Express-brand milk that's delivered fresh daily. Cold milk froth is used for iced drinks.
"We have known for quite some time that millennials and female consumers prefer espresso, so we teamed up with a European manufacturer," Olympidis said. "I want to make sure not to overstate what this means, but it's a sea change in upscale coffee marketing. We're going to deliver superior high-quality coffee shop-caliber drinks."
The JAVA WAVE European Cafe is a salvo in a highly competitive marketplace that's dominated by Starbucks, Dunkin Donuts and McDonalds. This year, the coffee shop industry is expected to rake in more than $30 billion in revenue.
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Family Express is also planning to expand its bakery to keep up with the sales volume of square doughnuts, muffins and other sweets, and to branch more into catering for businesses. The company, which currently employs about 35 workers in its baking department, will triple its capacity and start hot-glazing donuts so they stay fresh longer.
The company is constantly looking to innovate because, unlike other gas station operators, it doesn't have any oil refineries, Olympidis said.
"The consumer has left the drip-coffee experience and transitioned into something that's more sophisticated," Olympidis said.
"The convenience store, in a way, has been asleep at the wheel. The line at Starbucks is because the consumer is interested in an upscale espresso experience. The customers are already there. We're just catching up with where our customers have been. Consumer market trends evolve. We don't eat the same food today that we did 20 years ago. People are eating healthier foods. Coffee is no different. It evolves. Espresso is a new frontier in the United States, but it's established in Europe. No one would think of having a drip-coffee experience in Italy. So we're catching up with our southern European friends."
A Switzerland-based company that provides restaurant equipment for McDonald's designed the touch-screen machines for Family Express.
Family Express' new barista machines have advantages such as that the coffee is never handled by a person who might sneeze into it, there's never the inconvenience of waiting in a long line, and the order is never messed up, Olympidis said.
Also, it's cheaper. Signs posted at Family Express stores contrast its espresso shot and macchiato prices with what Starbucks charges for those items.
"Consumers should appreciate an upscale treat without having to pay $5 for a drink," he said.