More convenience stores are expanding their coffee programs to deliver quality and value to customers.
By Howard Riell, Associate Editor
Convenience store operators are growing increasingly creative with their coffee programs— emphasizing quality and variety, while engaging and educating consumers on the latest category offerings.
According to a recent Packaged Facts report, innovations are providing the coffee industry with growth opportunities, new usage occasions and higher price points. And with U.S. gas prices falling below $2 per gallon, many consumers clearly feel freer to spend inside stores.
This past October, Starbucks inaugurated Green Apron Delivery, a pilot program that delivers coffee and other beverages and food items to customers who order online. While innovations such as off-site delivery, novel barrel-aged coffee—green, unroasted beans housed in bourbon-soaked barrels for added flavor—are gaining traction, they’re also stoking the curiosity of retailers hoping to elevate their coffee programs.
Rainbo Oil Co., based in Dubuque, Iowa, operates 15 Kwik Stop convenience stores as well as Fazoli’s and Dairy Queen restaurants. The c-store is using its coffee program as a means to bridge its c-store and restaurant services.
Rainbo’s second combination Kwik Stop and Fazoli’s location, which recently opened in Dubuque a few months ago, features a 70-seat restaurant with drive-through service offering freshly prepared Italian entrees, oven-baked sandwiches and a variety of salads.
“It’s the second one of a template we started about a year ago, so it’s actually a duplicate of (the first) facility that we opened last year,” said Jill Reimer, Rainbo’s vice president.
During the breakfast period, from 5 a.m. to 10 a.m., Kwik Stop store personnel will make use of the Fazoli’s drive-through window to operate what executives are calling their Kwik Café Express concept. “If this store works and if it’s something that customers respond positively to,” Reimer said, “then in our other stores where we have side by side it’s something that we will grow, as well.”
Coffee is a key to the success of its foodservice program, which is part of the c-store’s growth. In fact, drive-through will come to play a more prominent role in Kwik Stop stores during breakfast hours and other dayparts.
Rainbo Oil’s coffee program, developed by St. Louis-based Ronnoco Coffee, includes specialty coffees in a variety of flavors as well as a collection of fresh-brewed iced teas and seasonal cappuccinos. It is supported by a loyalty program, promotions and point-of-sale materials. Rainbo’s bundled specials combine coffee or tea with snacks and breakfast sandwiches.
“You try and make every avenue of your business pay rent by being useable at all dayparts. We’ve been with Ronnoco for a long time and are very, very happy. They helped us brand our own coffee program, and we think that’s definitely a niche we have in this market,” Reimer said.
Rainbo is keeping a close eye on the unit’s coffee sales, which have grown over the past year.
“If the coffee program that we have works, then we will do it in our other stores that will have bundled national brands, as well.” Reimer said.
According to Reimer, coffee delivery could also be in the cards, if the demand is there.
“Delivery of convenience store items, and that whole concept, is something that is definitely going to come to fruition here in the next year or two in our industry.”
Heidi Rembecki, director of merchandising for Tonawanda, N.Y.-based NOCO Inc., with 35 NOCO Express convenience stores in the greater Buffalo region, found that promotions can fuel strong coffee sales throughout the day.
NOCO brews 6-8 varieties of Chicago-based World Cup Coffee’s products, and provides an assortment of creamers and other flavorings. NOCO Express locations feature coffee bars with 10 pots on average, plus cappuccino and hot chocolate machines.
“What we have been doing is running some daily specials or timed specials such as 99-cent coffee after noon,” Rembecki said. “Some people might call it a happy hour type of thing. We’re also focusing on bundling, too. The answer has been Danish sourced from local packaged bakeries. We have some signature bakery items.”
Recent changes to the layout of the store’s interior left NOCO’s coffee program unaffected, she explained. “Coffee is the thing we did the least with inside the store, frankly. We already had that program in place. This update was really centered on replacing the gondolas and adding some new hardware and fixtures into it to create a different look for us.”
Kim Robello, marketing manager with Minit Stop Hawaii in Kahului, Hawaii, would like to engage convenience store coffee drinkers even more. One way is teaching customers how to combine brewed coffee with the cappuccino machine, and syrups to create a flavor or recipe of the month.
“The category as a self-serve format is limiting,” Robello said. “As such you need to find ways to create a virtual barista by educating the customers how to use your offers in conjunction with each other to create a custom drink. We need to prop up the category from machines on a counter to an interactive platform.”
The chain consists of 14 convenience stores—nine on Maui and five that dot the Big Island. A recent coffee promotion offered a thermal cup for $3.99 with their first gasoline fill-up, and 99-cent refills every time they brought the cup back to the store.
Robello believes that the hot coffee offer should be accompanied by a cold beverage offer.
“I believe iced coffee is an opportunity on the table for c-store chains. You need to provide a smooth but bold base coffee, and allow the customer to finish it as they like with syrups, creamers, and sweeteners, provided by the store operator,” she said.
While drivers in some regions stop for coffee as a way to counteract cold weather, in Hawaii the motivation is different, Robello explained.
“There are no seasons, but driving is a chore because of the traffic. We need to provide the customer a companion in their cars by way of a great cup of coffee for that frustrating commute,” she said. “We also need to link our coffee purchase with the other parts of the breakfast daypart so we are a one-stop morning shop that not only provides good product but also good value.”
Though consumers have been slow to come forward with requests regarding Minit Stop’s coffee program, Robello has made some observations.
“I think convenience, variety, quality and value will get folks to think of our store as a viable alternative to the Keurig machine or coffee house platform,” Robello said. What will boost convenience store coffee business, she added, is consistency. “If we deliver quality and value daily in our coffee category, we’ll see the results.”
Reimer said that while she hasn’t heard of barrel-aged coffee, Rainbo is also willing to take a look.
“Our industry is one of those that are looking to accommodate all,” Reimer said. “I don’t have that in my crystal ball, but if the industry says it will work and proves that it will work, we’re there to keep up.”