Coffee offerings in c-stores are hotter than ever, including cold-brew coffee programs. As this beverage offering gains in popularity, convenience chains such as Wawa are brewing up new programs to capture a different beverage experience.
By David Bennett, Senior Editor
Wawa Inc.’s signature branded coffee, introduced in the 1970s, is now one of the most popular Wawa foodservice offerings. Selling millions of cups every year, there’s been few reasons for the retailer to tinker with its perfected proprietary formula.
However, this year the Pennsylvania-based c-store opted to expand its beverage program to include cold-brew coffee selections to stay up with the expanding popularity of cold-brew beverages.
Market penetration for cold-brew beverages rose to 21% in the first half of 2017 among U.S. coffee drinkers compared to just 15% in 2015, according to data from the National Coffee Association (NCA) in New York.
This past July, Wawa announced it was making its cold-brew iced coffee, Wawa Cold Brew, available in all of its 760-plus locations as part of its specialty beverage program, which is already in its Florida and mid-Atlantic stores. The cold-brew offering comes in two flavors of traditional black or sweet cream, both in 16-ounce and 24-ounce sizes.
The c-store’s cold-brew coffee incorporates a slow steeping process, using Wawa’s unique coffee beans, said Mary-Rose Hannum, Wawa’s senior director of fresh food and beverage experience. The response from customers has been positive so far.
“Sales have been strong so we’ve been excited about that and certainly have gotten positive feedback and reviews whether it’s through social media or just talking with our customers,” said Hannum. “We would say it’s been a success and we look forward to it continuing to grow. Since it is new, it’s about an awareness that we have it and it’s available at Wawa.”
Wawa Cold Brew is made through a small-batch process, using triple-filtered water and low temperature extraction that delivers a smooth, full-bodied coffee with low acidity and hardly any bitterness.
“Our development team had been working on it for more than a year to make sure that we were going to have a consistent product, both in quality as well as in execution for the stores,” Hannum said. “We also wanted to use our own blend, so we do use a formulation of our dark roast.”
Driven by changing taste profiles, steered mostly by Millennials, cold coffee beverages was a logical addition.
“Cold brew was the thing up and coming—really up and coming—for the last several years,” said Hannum.
For convenience store chains looking to add to their foodservice bottom line, cold brew is the latest iced coffee craze popularized by companies such as Starbucks and Dunkin’ Donuts.
Even 7-Eleven put its own spin on the category this summer by promoting freshly-brewed iced coffee with mobile app ads and on its website, encouraging patrons to fill a Big Gulp cup with ice, add coffee and condiments.
The consumption of specialty coffee is increasing as shoppers are prioritizing experience over price in the consumption of gourmet and specialty coffee beverages. Within the $48 billion retail coffee market, approximately 55% of spend is expected to go toward specialty coffee in 2017, according to the Specialty Coffee Association of America.
Among all those percolating dollars, the increasing popularity of cold-brew beverages are helping boost sales during the summer months, said Bruce Milletto, founder, owner and president of Portland, Ore.-based Bellissimo Coffee Advisors. Milletto has advised a few name-ranked convenience chains, including when he worked with Sheetz Inc. when the chain was adding its crew-serve coffee program.
It should come as no surprise that consumers are becoming more particular about the quality of coffee they drink, Milletto said. Many convenience retailers have elevated coffee to a higher level, boasting fresher product as well as fuller conceptualized coffee spaces, condiment bars, promotional campaigns and customer experience.
“I don’t think we’re there yet,” said Milletto, referring to c-store coffee programs reaching their full potential.
More experts point to cold-brew coffee as a game changer for retailers because not only is it sought out by consumers as an iced beverage option, it provides a unique revenue stream that doesn’t divert from hot-coffee sales.
Convenience retailers that align their product offerings to the latest retail trends are paying attention to the latest coffee craze: nitrogen-infused coffee. Starbucks earlier this year announced nearly 500 locations would have nitro cold brew on tap by summer’s end.
Tap is the key word because of how the coffee is created. Nitrogen is added to a keg along with coffee to yield a foamy, caffeinated beverage.
Again Wawa is pushing the cold brew envelope, making nitro coffee a standard offering at a new store being planned in Washington, D.C. The planned 9,200-square-foot store is scheduled to debut this winter on 19th Street NW and will featuring subway tile-wrapped walls, nitro cold-brew coffee, free Wi-Fi and a curbside patio along with other urbanized offerings.
Wawa operates stores in Delaware, Florida, Maryland, New Jersey, Pennsylvania and Virginia.
Wawa’s nitro cold-brew coffee program has yet to be formally rolled out chain-wide, but the company is hopeful it will make a big splash.
“We thought it was appropriate as we’re in the city, a lot of universities around, a lot of young people—and we (will) certainly have the space,” said Hannum.
FULL OF BEANS
Coffee programs at c-stores that earn customer loyalty more than not boast a nearly perfect balance of quality, service and cost. To that end, industry suppliers are helping retailers realize their coffee potential. For instance, Core-Mark Holding Co. this August announced the release of its new, upscale line called Arcadia Bay Select Coffees.
Along with Boyd’s Coffee Co., a Pacific Northwest coffee roaster for 115 years, Core-Mark has developed a premium line of coffee exclusively available to Core-Mark customers. Arcadia Bay Select Coffees includes Arabica bean coffees sourced from eight coffee growing regions including Kona, Brazil, Ethiopia and Guatemala.
To make the program even more seamless, the supplier is providing c-stores with marketing support, signage, menu boards and prefab kiosks.
Riverside, Calif.-based GT Petroleum, which operates under the convenience banner GT Fast Mart, recently adopted the new Arcadia Bay line. The strategic move is already showing positive results.
“On the advice of Core-Mark, we moved from a liquid coffee program to the Arcadia Bay Select Coffees, said Amy Prewitt, store manager at GT Fast Mart. “We love the new signage that supports the program, and our coffee sales are up more than double digits since we have made the change and we plan on adding more coffee varieties to support the program.”