Given increasing customer excitement surrounding cold-brew coffee, many convenience store retailers across the U.S. have been getting in on the trend by adding the beverage to their cold vaults and/or dispensed areas.
While some retailers expressed encountering specific challenges with cold brew sales and, as a result, are carrying only a representative sampling of the beverages, others have been experiencing sales that range from good to great and growing.
At Yesway, for example, “cold brew has been a hot category” since it hit the stores last year, according to Derek Gaskins, the c-store chain’s senior vice president of merchandising and procurement. Yesway, which has 150 stores in nine states, currently carries four to five brands of cold brew.
To meet the increasing consumer interest in and demand for the product, the company is expanding that array of brands and has plans for private-label development.
“Cold brew is starting to go mainstream as consumers experience the true difference between it and regular-brew coffee,” Gaskins explained. “It is smoother, and because it’s steeped longer, it delivers more robust flavors without the acidity. All of that really resonates with consumers.”
The difference between cold brew and regular, iced coffee is that cold brew uses room temperature or cold water that remains in contact with the grounds for between 12 and 24 hours, while iced coffee is brewed the traditional way using hot water that is then chilled or iced.
Gaskins added that, in addition to the flavor, the caffeine boost from cold-brew coffee is also a major driver of sales, much as it is in energy drinks. At Yesway, he pointed out, Peet’s and Starbucks have both delivered solid sales and growth.
Expanding Segment
A constant influx of new brands and flavors make keeping up with cold-brew coffee a challenge, especially in c-stores with limited cold vault space.
Scott Zaremba, president of Zarco USA, which has two convenience stores in Lawrence, Kan., has room for only a few of the name brands, such as Dunkin’ Donuts and Starbucks. He said they sell well, especially the flavored varieties.
In his c-stores, it is crucial that he keep a “sharp eye” on the brands and flavors that sell best. He has also cut down on flavors that he describes as “exotic” and is sticking with the ones that offer more mainstream appeal.
“It’s a growing category, like the water category, particularly among the 25-to-50-year-old age group,” Zaremba said. “They’re a dedicated group who are loyal to the product.”
He noted that cold brew fans are migrating from soda to coffee in the afternoons and evenings, as well as drinking it in the mornings. Even in the mornings, it’s the canned product his consumers prefer.
“I had dispensed cold brew in the stores for a while, and it didn’t sell, so I eventually took it out,” he said. “People seem to like the RTD product because of its grab-and-go convenience.”
Meanwhile, in one convenience market and most of the nine cafes on Iowa State University’s campus, dispensed cold brew “has really taken off, really grown in popularity,” said Kristi Patel, assistant director for retail operations. The unsweetened cold brew is dispensed from a keg.
“Our customers like the flavor profile of the cold brew; it’s smoother,” Patel noted.
Cold brew got off to a fast start when it was first introduced at Quick Shop c-stores with 13 locations in central Alabama. “It quickly grew like crazy, but since then has flattened out,” said Quick Shop President David Collins. “We still do well with Starbucks and Monster Java in certain flavors, but with so many new brands on the market and so many new flavors being added, it’s not possible to keep up.”
In three of its c-stores, the company also experimented with nitro cold brew, which is infused with nitrogen, but the popular trend didn’t catch on with the chain’s customer base.
At select travel centers across North America, Pilot Flying J stores dispense freshly made cold-brew coffee. Guests can choose from a wide selection of creamers, toppings and syrups to create their own personal cup.
“They like the all-natural energy boost they get from cold brew,” said Stephanie Myers, external communications supervisor for Pilot Flying J, which operates more than 750 retail locations in 44 states.
According to the National Coffee Association’s “National Coffee Data Trends” report for 2019, 80% of consumers are aware of cold-brew coffee, and the under-40 demographic — and specifically ages 25 to 39 — is a formidable force driving “remarkable growth” in the category. Coffee drinkers ages 18 to 24 are the next-highest consumers of cold brew.
