Make Coffee More Profitable

Tips for Preparing the Perfect Cup • Always use fresh, filtered water. • Always use fresh, whole bean coffee. Coffee is perishable: use within two weeks of roast date. • Store coffee beans in an air-tight container away from heat, light and moisture. No freezer or refrigerator. • Grind just before brewing—a timer will help you create the perfect grind. Source: Component Design Northwest (CDN).

Consumers take their coffee seriously. Dedicated coffee drinkers usually decide to buy the beverage long before they arrive on the store lot, making the purchase intent close to on par with that of cigarettes, and presenting a huge opportunity for convenience stores to leverage their coffee offerings to achieve incremental sales gains.

What’s more, daily coffee drinkers tend to stick to a routine, revisiting the same location each morning, which means increased business year-round. But with added pressure from McDonald’s and Starbucks, which announced a plan to decrease prices on a few of its basic coffee items, it’s going to take extra effort on the part of c-stores to make their coffee sections stand out.

Despite a rough economy, hot dispensed beverage sales held their own in 2008, with a gross margin of 64.9%. Sales were down only 0.7% in the height of the recession, while profit dipped 2.8% from 2007, according to NACS’ 2009 State of the Industry report.

In 2008, 51% of coffee purchases were made outside the grocery channel, which means more customers are looking to locations, such as c-stores for their coffee needs.

Achieving a Better Brew
Most c-stores are familiar with the usual tactics for driving coffee loyalty such as developing a loyalty program that offers discounts and freebies for frequent customers. Most operators also know presentation is crucial. The coffee must be fresh and the counter area must be clean and well-stocked with sugar, creamers, napkins and the like.

Coffee Math: Great Coffee = Great Profits • Coffee at $14 per pound. • One store using 4 ounces to brew a 64-ounce pot. • Serving an 8-ounce cup equaling 32 cups per pound of coffee. • At 100 cups per day, with 50 refills at no charge. • Selling each cup at $1.95 • With a cost of goods sold (COGS) of 54 cents per cup, the store would bring in a profit of $44,484.38 in one year. Source: Component Design Northwest (CDN).

Timing is also an important aspect in maintaining coffee quality. Timers are one way to monitor brew time and serve time on coffee brewers. Some c-stores with thriving coffee programs, like Quick Chek and Wawa, feature timers that go off at regular intervals to alert staff that the coffee needs to be filled and to let customers know that the coffee is fresh at all times.

Additionally, operators need to remember that the time the coffee spends brewing greatly impacts the flavor. Brewing coffee too quickly results in under-extracted coffee, while brewing too slowly can produce a bitter flavor. When monitoring drip coffee, begin timing as soon as brewing is activated. Even though the coffee may not drip immediately, water instantly begins to infuse the grounds, which means the process has begun. Experts recommend serving drip-brewed coffee within 30 minutes of brewing. CDN recommended using a clip-on, count-down freshness timer to ensure the drip brewed coffee is served within an appropriate freshness window.

While it might take a little extra effort to produce the freshest cup of coffee, it can make a difference in inspiring today’s sophisticated consumer to come back for more.