Customers might forgive a lot of things, but one thing they won’t forgive is a bad cup of coffee. They also remember the good ones, resulting in higher rings and repeat visits.
By Marilyn Odesser-Torpey, Associate Editor
Many customers see convenience stores as their destination of choice for a quality cup of coffee.
In a survey released in September by GasBuddy, c-store customers voted coffee “the favorite food and beverage item in the gas station.” Fourteen million cups of coffee are purchased from a c-store every day in America.
Of the stations in the U.S. that ever received a coffee review in the GasBuddy app, more than 75% received positive reviews. To compile that information, GasBuddy included more than three million coffee ratings covering more than 150,000 retail locations where gas is sold.
In a report released in August, Datassential research firm found that, next to freshness and consistency, convenience, variety and customization were the most powerful draws for coffee-seeking consumers, “all of which convenience stores can readily deliver,” according to Mark DiDomenico, the company’s director of client solutions.
“The biggest thing is the realm of additives and condiments such as a selection of creamers, including soy- and nut-based alternatives, and sweeteners such as turbinado sugar and agave syrup,” DiDomenico said. “Some consumers are also looking for additives that provide functional benefits such as extra caffeine or something like turmeric, which is reputed to provide anti-inflammatory benefits, and can be offered in powdered or liquid form at the coffee bar.”
DiDomenico pointed out that limited time offers (LTOs) are also a proven way to expand variety and create excitement in the category. When it comes to seasonal flavors, pumpkin may get all the press, but cinnamon scored much higher on Datassential’s August SCORES report, which tracks new item launches each month.
But LTOs don’t have to be based on seasonality. They can also include brews from other countries and selections from the wide range of different flavors that are available from suppliers, DiDomenico said. And while it’s good to think outside the box when it comes to additives and LTOs, he emphasized that “consumers are especially finicky with their coffee” and “they are very habitual,” so it’s most important to do the basics well and “create craveability” for the store’s brand.
CUSTOMIZATION SELLS
Recently, RaceTrac rolled out machines that allow customers to “be their own barista” by selecting their favorite coffee blends and watching the beans grind right before their eyes for its Crazy Good Coffee program now in its close to 500 stores in Georgia, Florida, Louisiana, Mississippi and Texas, said Tiffany Plemmons, the chain’s senior manager of dispensed beverage. The grind-to-order process takes less than 60 seconds.
“With our new Bean to Cup machines, our guests know that they can stop in for Crazy Good Coffee anytime day or night knowing they’ll get the freshest cup possible since it is brewed on demand instead of sitting in an urn,” Plemmons said. “The technology has also eliminated the need for coffee urns, saving our store teams time.”
RaceTrac’s program offers six everyday blends of 100% Arabica beans including hazelnut, regular, 100% Colombian, Rainforest Alliance Guatemalan and dark roast. LTOs, she said, “drive excitement and buzz in the category” and can be a specific varietal, origin or flavor.
The Rainforest Alliance Guatemalan coffee, she said, began as an LTO last January and was such a huge hit that it became a permanent item in the stores. Pumpkin spice “is always a fan favorite each fall.”
Customization is a key contributor to the success of RaceTrac’s Crazy Good Coffee. Guests can choose from a variety of creamers—including a seasonal selection such as pumpkin spice in the fall and Irish cream in the spring, sweeteners and toppings such as whipped cream.
Beyond the customizable offers, cappuccinos and hot chocolate are dispensed from a self-serve machine “that is perfect for our guests that are on the go,” Plemmons said. Later this year, RaceTrac will introduce a new line of co-branded cappuccinos including Cinnabon Cinnamon Roll and Hershey York Peppermint Pattie as well as a Hershey’s Hot Chocolate.
“We firmly believe this co-branding opportunity will resonate with our guests,” Plemmons said.
Having a strong coffee platform helps drive sales and increase basket size, she added.
“We see strong affinities with fresh bakery, hot breakfast sandwiches and packaged pastries,” Plemmons said. “It’s not uncommon for a guest to pick up a hot dog, pizza or a bag of chips with their morning coffee.”
LTOS ADD SPICE
It takes a lot of work to maintain coffee sales in today’s increasingly competitive market, but Kwik Trip and Kwik Star stores are willing to do whatever it takes, according to Paul Servais, retail director for the 630-unit chain with stores in Wisconsin, Minnesota and Iowa. Recently, that has meant permanently value-pricing a 12-ounce cup of proprietary Café Karuba at 99 cents and kicking off an LTO program that offers a new variety every four months.
The LTO is one of six varieties the company drip brews every day at its self-service coffee bars.
“Our LTOs have been very successful and have helped generate interest in our coffee program,” Servais said.
Another way the program has generated interest this year is by partnering with the hometown National Conference football team, becoming the Official Coffee of the Green Bay Packers. The partnership has brought the brand to the field and concessions and is printed on all cups and signage.
For the Café Karuba Gold freshly-brewed espresso-based drinks such as cappuccinos, lattes and mochas, each store has a Franke FM850 machine, which grinds the beans to order, mixes the flavors and uses real milk. To promote the Karuba Gold line, Kwik Trip and Kwik Star extensively use social media and frequently link purchases to the company’s new Kwik Reward loyalty program.
One week a month, the stores offer a Happy Hour price of 99 cents for a cup of Karuba Gold that usually sells for $2.49. And on National Coffee Day in September, customers who purchased two Karuba Gold coffees received a discount on gas.
“For many customers, coffee is the destination item; a good cup of coffee can draw people to your store,” Servais said. “If you’re a gas station you sell gas; if you’re a convenience store you should sell a good cup of coffee. They’re the pillars of our business.”
Servais stated that customers who come in for their morning coffee also usually purchase other items such as breakfast sandwiches and doughnuts. The stores also offer specially priced bundles of a 16-ounce coffee and breakfast sandwiches.
Cenex Zip Trip, which has 34 stores in Montana, South Dakota, North Dakota, Minnesota and Wyoming, just changed its brewing system from thermal to the Intellifresh program, which keeps the coffee at a constant warm temperature while preserving its flavor. Chilled dispensers were also recently added to provide half-and-half and French vanilla creamer. Pump pots offer other flavors and sugar, sugar substitutes and powdered creamers allow customers to create their perfect cup, said Jon Fleck, Zip Trip’s merchandising manager.
The company also switched from serving its coffee in traditional paper cups with sleeves to double-walled cups.
“Unlike Starbucks where the barista puts the sleeve on the cup, our customers did it themselves when they poured their coffee, but we found that half didn’t realize it and brought their coffee up without a sleeve via the ‘hot potato’ approach so it wouldn’t burn their hands,” Fleck said. “The double-walled cups took the sleeve out of the equation.”
With the various brews and sizes available, Zip Trip stores have four-to-six different coffee offerings as well as a six-head cappuccino and hot chocolate machine. The Breakfast Blend is the top-selling coffee, with Hi-Rev running a close second.
“Customers really like the high caffeine content,” Fleck said.
LTOs have been mixed performers for Zip Trip.
“In the past, we had LTOs that ran for two months and were either a big hit or we’d get stuck with cases we had preordered,” Fleck said. “We are now being more selective on those LTOs and will only do three or four a year.”
Fleck pointed out that very rarely do customers purchase just a hot beverage. They usually add a muffin, pastry or breakfast sandwich to their order.
Recently, Zip Trip began promoting its coffee program on TV monitors that show retail pricing and other information about the offerings. The company has also used pump toppers, billboards and radio spots to draw attention to its program.
