SINGAPORE: Amid the increasing popularity of single-serve coffee systems, at least one homegrown firm is looking to cash in on the trend.
Founded in August 2015, Iris Group produces Nespresso-compatible capsules that can be tailored according to the needs of its customers. According to managing director Giorgio Vergano, Iris Group is the only company in Asia producing customisable capsules that work in Nespresso machines.
Since commencing production four months ago, the local firm has attracted various beverage makers from six Asian markets, including Singapore, and Italy. While Mr Vergano declined to reveal the number of businesses he is working with, he noted that most of them are “first-timers” in the coffee-in-a-capsule market.
“Our main purpose is to offer the service of capsuling for roasters and smaller businesses that want to enter the capsule market but don’t know how to. All our clients need to do is to give us the ingredients, be it coffee, tea or chocolate, and we will fill up the capsules for them,” Mr Vergano told Channel NewsAsia, adding that the choice of producing Nespresso-compatible capsules is a no-brainer given that the high-end brand from Nestle has long been the dominant market player.
The material used for this Nespresso-compatible capsule prevents the ground coffee or tea leaves from coming into contact with oxygen. (Photo: Tang See Kit)
Mr Vergano, who has over a decade of experience in the coffee industry after working at Italian brands Luigi Lavazza and Punto Italia Espresso, said he was inspired to start Iris Group with its co-founder, Mr Ken Wong, after noticing the dramatic rise of coffee pod sales.
“The capsule market is growing very quickly, not just in Singapore but the whole world. Asia is a key market where capsules are becoming a trend because of the convenience, quality and variety. If you are using coffee beans or ground coffee, you are stuck to finishing your bag of coffee before you can change. But with capsules, you can have the fun of choosing a different drink every time.”
The 41-year-old Italian chose Singapore as the company's headquarters because of the country’s “centralised location” within Asia, as well as the prestige that comes with being made in Singapore. “’Made in Singapore' today has a meaning that stands for quality and we want to be part of that,” he said.
At the moment, Iris Group is operating on lean manpower, with only three full-timers, including Mr Vergano and his shareholder, Mr Wong. The company's production facility is located within its headquarters at Ubi Crescent. The key lies in an Italy-made automated machine, whose price tag Mr Vergano would only describe as “a very significant amount of money”.
The capsule-filling machine. (Photo: Tang See Kit)
“This is a fully-automated, high-speed machine that is tailor-made to our requirements. Needless to say, it was a significant investment but it is one that will ensure the quality and consistency we are looking for."
The machine, which only needs one person to operate, can fill and seal 70 capsules in one minute.
While the production speed is swift, the research and development (R&D) process to produce a coffee capsule can be an arduous one. For instance, different types of ground coffee have unique characteristics that might determine how it would react when hot water is injected into the capsule to extract coffee. The quick extraction time of typically around 30 seconds also heightens the difficulties of capsule filling.
“It’s not just about receiving the ingredients and then turning on the machine to fill the capsules,” Mr Vergano said. “There’s no standard in terms of how much coffee you put in one capsule; it all boils down to the R&D you do on your part.”
“You need to understand the coffee you’re working with. For example, the coffee from our Indonesian customers is light roast coffee and it will react in a unique way in the machine when hot water passes through. If we use the same approach for an Italian coffee that uses typical Italian roasting techniques according to the blends, it would be a disaster,” he added.
(From top left) Empty capsules lined up and placed on a conveyor to be filled with ground coffee. After being filled and sealed, the capsules are picked up and placed on another conveyor belt equipped with weight and quality checkers. (Photo: Tang See Kit)
The difficulty is also multiplied by the range of beverages that the capsule-filling company does. Apart from ground coffee, Iris Group also produces chocolate and tea capsules.
“We use real tea leaves, not instant tea, for our capsules and because each leaf has a different size, softness and texture, it is challenging to control the consistency in weight,” Mr Vergano explained.
For now, businesses that work with Iris Group are given three types of capsules to choose from, one of which is a compostable capsule made from corn polymer that will dissolve within 90 days.
The compostable capsule is made from corn polymer and will dissolve within 90 days. (Photo: Tang See Kit)
As more coffee drinkers worldwide opt for their daily jolt of caffeine via capsules, critics have said that the usual plastic or aluminium bucket-shaped pods capped with foil are fast becoming an environmental menace.
When asked for his thoughts on this, Mr Vergano said: "Any form of consumption, not just capsules, creates more waste. The plastic capsules we have can be recycled but the recycling requires assistance and not all consumers are ready and willing to go through the trouble ... The compostable capsule will be a solution to help keep waste at a low level."
Cost is one of the factors why there have been limited takers for the compostable capsule, according to Mr Vergano.
“It’s slightly more expensive - at about 2 per cent more each - but we think this is a minor difference in cost that can be easily explained to consumers.”
As such, Iris Group hopes that its compostable capsule can appeal to more environmentally-conscious consumers.
"Compostable products are readily available; not just capsules but plastic bags and the items that we use every day as well. I think there needs to be more knowledge and education about this being spread to the public ... and I believe if there was more demand and pressure from consumers, it will come back to those who produce these capsules and products," he said.
Capsules being packed at Iris Group's production facility. (Photo: Tang See Kit)
Moving forward, the young local firm is boiling over with expansion plans, including the production of capsules that will be compatible with the Nescafe Dolce Gusto machines, the addition of a roasting facility and widening its presence to Australia by the end of the year. It also has a secret weapon that it hopes will be able to give it a shot in the arm - the “kopi” capsule.
The official date for the capsule that will contain the local traditional brew, however, is still under wraps. “No one has been able to produce a ‘kopi’ capsule yet because it is more difficult to be put into a capsule, so we are still preparing ourselves,” said the Italian, who added that the idea came from how he has taken a liking to the local “kopi” since moving to Singapore in 2014.
His favourite is iced coffee with condensed milk, locally known as “kopi peng”.
“I usually have six cups of espressos a day but now on top of that, I will have iced coffee with condensed milk during lunch at the coffee shop opposite my office,” he said. “To be honest, it’s actually quite good. I like it.”
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