Marketing - Case Study

Costa Coffee delivers the next generation in self service with embedded Intel®technology

Costa is one of the UK’s largest and fastest-growing coffee shop brands and a wholly owned subsidiary of Whitbread PLC. With over 1,300 coffee shops across the UK and more than 600 internationally, the company is a global success story with a growing network of retail sites and franchises. Costa Express, a wholly owned subsidiary formed through the acquisition of Coffee Nation in 2011, focuses on self-serve, all-fresh, bean-to-cup coffee vending through autonomous concessions located in attended or semi-attended areas such as motorway forecourts, transport hubs (like airports and railway stations), and corporate offices. Costa Express is the fastest growing part of Costa and of Whitbread.

CASE STUDY

Intel®Core™i7 Processor Intel®Solid-State Drive 520 Series

Brewing an enhanced customer experience

CHALLENGES

• Stay ahead. Continue to set standards in the coffee industry with new approaches to customer engagement

• Encourage self-service. Build on investment in self-service coffee specialist to create the next generation of vending experience that maximizes financial performance

• Immersive experience. Create the world’s first vending machine to deliver premium quality and provide a comprehensive, five-sense user experience

• Reduce truck rolls. Create the first aerospace/medical-grade international vending system using a start-of-the art computing platform and control system

• International management. Administer devices and content distribution dynamically and efficiently

• Future proof. Ensure that the concessions are future-proofed for up to seven years

SOLUTIONS

• Dream team. Experts in multiple fields were brought together in a highly aggressive, integrated product development (IPD) team to deliver a new vending system, including Intel for the computing elements

• Standardize on Intel. All computing components are based on Intel® technology, including the Intel® Core™ i7 processor and Intel® Solid-State Drive (Intel® SSD) 520 series

• Understand customers. Intel® Audience Impression Metric Suite (Intel® AIM Suite) helps each machine target content most appropriate to the local customer base

• Fleet control. Devices are managed using Intel® Active Management Technology (Intel® AMT) and Intel-provided content distribution facilities

IMPACT

• Revenue potential. Costa is planning to roll out 10 times more new machines than it initially expected.

• New market segments. The attractive design and advanced, interactive features mean the new machines are suitable for more environments – from gas stations to boardrooms

• Amazing customer experience. Customers can choose from over 200 freshly-made drink combinations and a number of payment methods while being engaged with compelling interactive content

The next generation of vending

Costa is recognized as an innovator in the coffee retail industry. Wanting to expand its operations beyond the traditional coffee shop format, it embarked on developing an ad- vanced concession aimed at new, international market segments including transportation hubs (like airports and railway stations), as well as corporate environments.

“The power efficiency associated

with the Intel® Core™ i7 processor

and more reliable components,

such as Intel® Solid-State Drives

(Intel® SSDs), allowed us to create a

higher performance, lower-total-cost

design than we have had before. ” Eric Achtmann

Marlow Program Director/Architect Costa

This undertaking, code-named “Project Marlow,” was sponsored by Jim Slater, MD Costa Enter- prises, and Scott Martin, MD Costa Express and Coffee Nation founder, under the leader- ship of Eric Achtmann, Marlow program director and system architect. Project Marlow sought to deliver a fully functional system within around six months using advanced aerospace product development techniques.

Besides delivering an enhanced self-serve experience that would support its mission to “save the world from mediocre coffee,” Costa wanted to develop a next generation of Costa Express* vending machines that would also:

• Encourage customers to pay prices commen- surate with premium quality Costa coffee, whether it is served by a barista in-store or through a Costa Express self-serve espresso bar

• Offer the right product mix, tailored to the customer demographic, using each self-serve bar

• Increase the number and value of sales per transaction at Costa Express self-serve espresso bars

• Boost the operating margins of each vend- ing unit by increasing its revenues and/or operational efficiency

“Having spent the last 12 years developing the segment, there was always the risk that, to quote Henry Ford, ‘if you do what you've always done, you'll get what you've always got’,” says Martin. “As such, with Project Marlow, we made a conscious decision to start from a clean slate, challenge fundamen- tal assumptions and try to do something truly novel.”

Taking its reputation for standard-setting very seriously, Costa tasked Eric Achtmann, MD Global Capital Advisors, with assembling and leading a crack team of specialists to architect and deliver the next generation of self-serve coffee vending that would be fu- ture-proofed for up to seven years of use.

The resulting design aimed at making the new Costa Express concessions the first in- telligent system in the vending industry and the first vending machine to provide a com- prehensive user experience, addressing the five senses:

1. Sight. Pininfarina, the world-leading designer of Ferrari and Maserati fame provided the aesthetic design of the body. The system also features a large, fully integrated 27” HD screen, with the user experience being developed with the Web designer who pro- vides the Harry Potter Web experience, as well as lead development for Xbox* and PlayStation*.

2. Sound. eMixPro, sound engineer for U2, Katy Perry and Coldplay*, was enlisted to recreate an authentic Costa café sound experience

3. Scent. Givaudan and Scentys, the world leaders in flavor and fragrance delivery, joined the team to create an authentic, all- natural olfactory experience

4. Touch. Every aspect of the concessions is high quality, using the finest materials assembled by production experts from the aerospace and race car industries. The same hands that build body components for Ferrari craft the body components for the Marlow concession. Even the cups sport a high-quality, Costa “fluted” design

5. Taste. The new machine uses only fresh, natural ingredients (i.e., fresh milk, fresh ground coffee, premium chocolate and optional natural, low-sugar flavors) includ- ing the same premium Mocha Italia beans used in Costa cafés worldwide. The coffee core of the machine was developed using components from Thermoplan, the world’s leading manufacturer of bean-to-cup cof- fee-making equipment.

To provide seamless, rapid, fool-proof and highly secure cashless payment, the Marlow team turned to SIX, the payment services arm of the Swiss Stock Exchange.

Leading coffee chain breaks new ground with its interactive self-service experience powered by Intel® technology

“Project Marlow is anchored by the

principles of high-performance, inte-

grated product development teams.

We were up-front with Intel from the

outset that we sought a true team

member, not merely a supplier. For us,

that meant providing thought leader-

ship, as well as sharing risk and reward.

Intel responded by allocating top people

and significant resources to our team.

The Intel team was habitual in ex-

ceeding expectations, and made an

outstanding and enduring contribution

to the program” Eric Achtmann

Marlow Program Director/Architect Costa

Another important member of the develop- ment team was Intel, which was asked to pro- vide the computing elements to underpin the new control system and interactive experi- ence. The control system itself was pro- grammed by a former Rolls-Royce jet engine control and test system designer.

An added challenge was presented by the tight deadline for having the new machine ready. The team wanted the first alpha pro- totype delivered within just 50 business days, with a view to being in a position to go to market as quickly as possible. A fully functioning beta prototype was delivered after only 100 business days, with initial production following shortly thereafter.

Embedding the right technology

The technical requirements to enable the system to support all this innovation were quite specific. The team needed strong com- puting performance and graphics capabilities to create the most engaging and attractive digital signage and user interface. However, power consumption needed to be kept low to facilitate passive cooling. At the same time, the complexity of the machine had to be kept to a minimum in order to minimize cost while simultaneously maximizing performance and quality.

“Project Marlow is anchored by the principles of high-performance, integrated product de- velopment,” comments Achtmann. “We were up-front with Intel from the outset that we sought a true team member, not merely a supplier. For us, that meant providing thought leadership, as well as sharing risk and reward. Intel responded by allocating top people and significant resources to our team. The Intel team was habitual in exceeding expectations, and made an outstanding and enduring con- tribution to the program.”

The team opted to use the ultra-low-voltage Intel Core i7-2340UE processor to power the

device, supported by Intel® Mobile Express Chipset QM67 and Intel® HD Graphics 3000 for a truly eye-catching display. It also imple- mented Intel SSDs 520 series instead of a hard drive, in order to reduce complexity and moving parts.

The integration of the Intel® Audience Impres- sion Metrics Suite (Intel® AIM Suite) with the Intel Core i7-2340UE processor-powered plat- form supported Costa’s objective of better understanding – and therefore targeting – the customer base for each self-serve coffee bar. “We implemented Intel AIM Suite’s Anonymous Viewer Analytics (AVA) functionality,” Acht- mann explains. “It assesses usage patterns like the number of viewers that observe a given machine and how long they look at it. This enables it to show content that has proven to be the most engaging for visitors at that location.”

After weeks of effort from the whole devel- opment team, the alpha prototype was deliv- ered on time and above the specified targets. The beta prototype also met its deadlines and exceeded its targets. “The first production units were ready to ship just six working months after we first assembled the team,” says Achtmann. “This was a great accomplish- ment, whereby Intel made a significant and enduring contribution toward the success of the program.”

New opportunities

Costa had initially planned to roll out around 2,000 of its new self-serve machines, but based on initial consumer feedback, it now expects to deploy many more of the newly- launched model, the Costa Express Marlow CEM-200*.

Thanks to the machine’s sleeker design and sophisticated user experience, Costa expects to be able to break into environments no other coffee vending machine has been able to reach before. “Our current model has been highly successful in traditional vending locations like gas stations and forecourts. These machines have typically had a more functional design to be rugged enough for these locations, but this also means they have not been particularly visually appealing,” says Slater. “The Marlow CEM-200 was designed to enter new, inter- national markets (such as corporations, lounges and catering), where the old machines could not penetrate. With the CEM-200 we are able to cover the entire market spectrum from the service station to corporate boardrooms.”

The new model offers over 200 drink com- binations, including various types of coffees, teas and hot chocolates. Each beverage is created using fresh ingredients added to the machine daily by the local real-estate owner or operator, and based on the selections made by the user through the touchscreen inter- face. The extensive choice means customers can always find the drink they want, making self-service a much more attractive option. By making each drink to order using fresh ingredients, the machine also ensures that it is of as high a quality as if it had been pre- pared by a barista.

Other new features include the ability to pay in seconds using Chip and PIN*, “Wave and Pay”, a European smart card payment system, or even contactless mobile payment. By simplifying and accelerating the transac- tion process, the CEM-200 helps to signifi- cantly improve the customer experience and increase revenue per customer.

Copyright ©2013 Intel Corporation. All rights reserved. Intel, the Intel logo, Intel Core, Intel Core Inside and Intel Solid-State Drives are trademarks of Intel Corporation in the U.S.and other countries. This document and the information given are for the convenience of Intel’s customer base and are provided “AS IS” WITH NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS. Receipt or possession of this document does not grant any license to any of the intellectual property described, displayed, or contained herein. Intel® products are not intended for use in medical, lifesaving, life-sustaining, critical control, or safety systems, or in nuclear facility applications.

Software and workloads used in performance tests may have been optimized for performance only on Intel microprocessors. Performance tests, such as SYSmark and MobileMark, are measured using specific computer systems, components, software, operations and functions. Any change to any of those factors may cause the results to vary. You should consult other information and performance tests to assist you in fully evaluating your contemplated purchases, including the performance of that product when combined with other products. For more information go to http://www.intel.com/performance.

*Other names and brands may be claimed as the property of others. 0413/JNW/RLC/XX/PDF 328911-001EN

Lessons Learned

Clarity of vision, teamwork, speed and decisiveness were the keys to this project. By bringing together experts in each aspect of the design and development of the Costa Ex- press CEM-200, the organization was able to create something truly ground-breaking. Intel’s expertise in embedded solutions meant that its contribution throughout the project was as valuable a success factor as the technology it provided.

A higher standard of coffee bar

“Vending, and in particular coffee vending, has traditionally suffered a bad reputation for quality. With the CEM-200 we wish to redefine the segment and provide a true premium café experience in places where a café may be neither available nor practi- cal,” comments Martin. “Achieving this requires relentless quality and a new concept in scalability. With more reliable components such as Intel SSDs, and power efficiency thanks to the Intel Core i7 processor, the machines are highly dependable and can be rolled out in larger volumes, so it’s a much more scalable solution than we have had before,” adds Achtmann.

“We’re moving towards vending using intelligent systems,” explains Slater. “We’re not just creating a box that sells coffee anymore, but a fully integrated, connected retail experience. We are trying to save the world from mediocre coffee.”

Meanwhile, the operators that manage the individual machines are also expected to see an improvement with the new systems. The real-time reporting and telemetry and highly reliable Intel® technology-powered machines mean that operating costs can be reduced while revenues are boosted.

Finally, the customers themselves can benefit. The five-sense vending experience has been achieved, meaning that Costa Express customers will receive a unique, engaging experience when using the machines, all while enjoying the high quality coffee they expect from Costa.

Find the solution that’s right for your organization. Contact your Intel representative, visit Intel’s Business Success Stories for IT Managers www.intel.co.uk/Itcasestudies or explore the Intel.co.uk IT Center www.intel.co.uk/itcenter.

“Costa is moving towards vending

using intelligent systems. We are not

just creating a box that sells coffee

anymore, but a fully integrated,

connected retail experience. This is

all a part of our mission to save the

world from mediocre coffee.” Jim Slater MD Costa Enterprises