Like other convenience retailers, Lassus Handy Dandy Food Stores, a subsidiary of Fort Wayne, Ind.-based Lassus Brothers Oil, is boosting its hot dispensed sales with specialty offerings. Following U.S. consumers’ inclination for more specialty coffees and teas, c-stores are banking on this trend continuing.
Coffee sales continued to grow in 2016. Overall servings of both traditional and specialty coffees rose 19% last year over 2015, according to a NPD Group/CREST report, which covers the U.S. coffee market in 2016.
In its “Coffee Market in the U.S. 2014-2018” report, Technavio research firm forecasted that U.S. coffee market revenue will increase at a compound annual growth rate (CAGR) of 5.9% over the period between 2013 and 2018. In terms of coffee volume, the CAGR is expected to rise 4.16% over that period.
At five of Lassus Handy Dandy Food Stores, customers don’t have to get out of their cars to order the company’s Higher Grounds premium coffee and made-to-order espresso drinks. Each of the stores has a drive-up window to expedite ordering and pick-up.
Handy Dandy was an early adopter of the premium coffee movement, having introduced its Higher Grounds concept about 10 years ago, said Todd Lassus, company president. The concept offers more than 20 different varieties of coffee from its traditional premium brews to such innovative creations as its signature Zebra (white and dark chocolate with espresso and milk), Monkey’s Tail (espresso with banana syrup) and the Chicago Jamaican (espresso and dark chocolate with almond and amaretto syrups), all of which are brisk sellers.
The retailer’s thirst to offer more variety doesn’t just apply to its beverage offerings, but following customer demand, is increasingly focusing on diverse condiments, flavors and specialty options.
Hot specialty coffee drinks at Handy Dandy are inspired by dessert favorites such as Cinnamon Roll Latte, German Chocolate Mocha and Mudslide. There is also an assortment of candy bar-inspired flavors, including Peppermint Patty, Snickers and Almond Joy.
The stores offer 4-5 regular “Brews of the Day,” of which at least one is a seasonal flavor. Customers can upgrade their coffees with a shot of espresso, whipped cream, half and half, breve (steamed half and half) or Torani syrup or sauce for an extra cost ranging from 50-75 cents. Coffee refills are also available at a discounted price.
In addition to the coffees drinks, Higher Grounds also offers two types of hot chocolate, two different hot tea drinks and steamers.
Prices for coffee drinks range from $1.55 for a short espresso to $5.30 for a vasto White Chocolate Crème Brûlée.
The Higher Grounds concept will be included in future high-volume stores. Labor and window-ordering capabilities for Higher Grounds are shared with the stores’ deli concept, Elmo’s Pizza & Subs.
In the 29 Handy Dandy stores in Indiana and Ohio that don’t have the Higher Grounds concept, customers can still get cappuccinos and other espresso-based drinks from eight-head, self-serve machines.
Tea is also a hot-button topic in the convenience channel. Total category sales for hot tea sales increased more than 15% between 2010-2015, according to the Tea Association of the USA.