With so many options available, consumers expect to get their perfect cup of coffee all day, every day. Retailers share tips on how they turned their store coffee bars into daily destinations for brew enthusiasts.
By Marilyn Odesser-Torpey, Associate Editor
Many consumers associate convenience stores with coffee, and if the coffee program is done right it is likely to boost overall foodservice sales, said a report published last March by Mintel market research.
The good news, according to the researchers, is that more than half (56%) of Americans who have visited a c-store in the past three months feel that the stores make coffee drinks as good as coffeehouses.
When asked which of the following made-to-order or fresh foods/beverages they had purchased at a convenience store in the last three months, 42% of the respondents said hot brewed coffee/lattes/etc., making coffee the second highest ranking item, second only to fountain beverages.
With one-quarter of the consumers saying that a combo meal would encourage them to order more made-to-order foods from the stores, the researchers concluded that retailers could leverage the popularity of their coffee with bundling and special meal deals such as charging a reduced price for a breakfast sandwich with the purchase of a coffee.
At Dallas-based Empire Petroleum Partners LLC, Ted Roccagli, director of partnerships and preferred vendor programs, is a big believer in bundling food items with coffee not only to get a “bigger ring at the register,” but also to introduce shoppers to the stores’ fresh food offerings.
“We bundle our coffee with everything from breakfast sandwiches to doughnuts, snack cakes and biscuits,” said Roccagli, who works with the company’s 1,600 retail partners in 32 states.
“We found that just by being merchandised alongside these items, our Royal Cup Coffee program drives companion sales and multiple rings at the register.”
At Englefield Inc.’s Duchess stores, with 118 locations in Ohio and West Virginia, the retailer’s proprietary-branded Crown Café coffee bar is usually located right next to the doughnut case to promote impulse sales, said Judy Dudte, the company’s director of foodservice.
Coffee-centric promotions, which change every two months, include a free cup with the purchase of a breakfast sandwich, bundling with other food items and, in winter, all size cups are sold for 99 cents. The Crown Card loyalty program rewards customers who purchase five cups of coffee with a sixth one for free.
Consumers really like and use loyalty programs, said Mintel foodservice analyst Caleb Bryant. Bryant noted that in a recent Mintel survey, 36% of c-store coffee consumers would like to see loyalty programs where they shop.
FRESH + LTOS
Roccagli emphasized that the biggest enticement to increase sales is the aroma of freshly-brewed coffee. He explained that this aroma is one of the things customers expect to experience in a c-store with a well-run beverage and foodservice offering.
“It only stands to reason that if you want to be a coffee destination, you should have fresh pots available as long as the store is open,” he said. “Coffee drinkers drink coffee 24 hours a day and, after all, as the old saying in our industry goes, ‘the first cup pays for the pot.’ You can’t get much more profitable than that.”
For glass pot systems, new batches should be brewed every 30 minutes to an hour to avoid smelling and tasting stale or burnt, Roccagli pointed out. Thermal or air pot systems can hold fresh coffee for up to two hours.
“When I go into Panera Bread, I see that they note the actual time the coffee is brewed right on the pot,” he said. “It’s a good idea because it shows me how serious they are about coffee.”
Thirty-five of the Duchess store locations have satellite urns and most of the rest have traditional glass pots. In these stores, fresh coffee is brewed every 30 minutes.
For almost a year, the company has been testing bean-to-cup brewers that grind the whole beans and brew a single cup at a time in four of its new-build stores. The brewing process takes about 60 seconds.
“Although it’s a more expensive system, it delivers the freshest cup of coffee a customer can get anywhere,” Dudte said. “Another advantage is that there is little to no waste.”
One Duchess store also has a made-to-order offering set up where customers can get barista-prepared espressos, cappuccinos and lattes. The program has been running in the store for about a year. A second is scheduled to begin operating in mid-March.
Duchess stores offer a minimum of three blends—a signature blend, Duchess Dark and decaf. Stores with space for a larger coffee service also feature a rotating single country-origin World Brew such as Guatemala Highlands or Bogota Sunrise. Different flavors and customization are achieved through mixing and matching of flavored creamers and syrups, some, such as peppermint for winter, of which are seasonal.
To attract attention and drive sales, the coffee area should be well defined with attractive graphics and display an assortment of creamers, sugars and syrups so customers can readily see that they can prepare their cup anyway they want it, Roccagli said. In addition to offering a regular blend, dark roast and decaf, Roccagli suggests that Empire Petroleum partner stores also include one or two limited time offer (LTO) coffee varieties.
“A featured ‘Blend of the Month’ gives customers something new to try,” he said. “Write a short paragraph about the blend on a sign in the coffee area to pique their interest.”
Ninety percent of the partner stores also have cappuccino machines with a minimum of three heads for regular, French vanilla (the company’s No. 1 best seller according to Roccagli) and hazelnut. The machines are available at no charge to retailers who purchase the supplier’s coffee products.
GROUNDS FOR VARIETY
The Specialty Coffee Association of America (SCAA) suggested that introducing a “luxury line” of coffee could pay off in 2017. The SCAA predicts that within the $48 billion U.S. retail coffee market, 55%, or $24.6 billion, will be spent on specialty coffee this year.
“A strong specialty program can help differentiate a c-store chain from its competitors,” the report concluded.
Mintel also found that 38% of convenience store customers who ordered coffee said they were interested in single origin and flavored coffee roasts.
Younger and more affluent customers in particular are looking for robust coffee bars where they can customize their own drinks with flavored creamers and syrups or have a barista do it for them.
As of last spring, Millennials have replaced baby boomers as the largest living generation, according to U.S. Census data. And, said SCAA, unlike their parents, these Millennials are more focused on the coffee experience than on price.
Millennials often look for sweeter coffee options that they view as a treat any time of day, Mintel’s Bryant explained. As examples, he pointed to Pilot Flying J’s recent Twix Cappuccino and Get Go stores’ seasonal Pumpkin Spice Latte.
Additions to sweeten up self-serve coffee bars can include marshmallows and chocolate sprinkles.
By tailoring your coffee bar to your core customer demographics, you could attract valuable new customers or entice lapsed customers to give you another try, Bryant said.