C-store Beverage Programs Offer a Point of Differentiation

NATIONAL REPORT — With the quality and reputation of convenience store foodservice programs on the rise, prepared food often gets the spotlight. Even when consumers think of a brand as a dining destination, they tend to associate it with signature snack or entrée items. Yet this doesn't mean retailers can feel free to put little effort into dispensed beverages; on the contrary, this offering can ultimately determine which store a customer chooses.

As competition for share of stomach heats up, it's more likely that customers will have multiple c-store options they find equally appealing, which only increases the importance of having quality hot, cold and frozen beverages to make the final difference. For example, a morning customer may not have beverages alone in mind, but if two geographically close competitors both offer tasty breakfast sandwiches, knowing one store has a fantastic cup of coffee can serve as a tie-breaker.

Variety, flavor and a clean and organized beverage area are the main draws, according to retailers.

"I think when it comes to dispensed beverage, it is important to carry as much variety as possible. The goal is to steal guests from your competitors, as well as your cold vault," said Paul Servais, foodservice director at La Crosse, Wis.-based Kwik Trip Inc., operator of 840 stores across Wisconsin, Minnesota, Iowa and Michigan. "This means playing with all of the latest equipment and drinks."

In addition to being able to choose from a diverse array of beverage and flavor types — sweet, sour, astringent, herbal and more — customers also value a beverage area's overall look and feel.

"Things that can get overlooked at the store level can be as essential as cleaning up spills in a timely fashion. This along with other pieces to the puzzle would seem to be 'no-brainers,' but a guest shouldn't have to guess where the various dispensed beverages are located within the store or ask for either a cup or the product," said Ben Lucky, category manager, foodservice, at La Plata, Md.-based Dash In Food Stores.

Small, sometimes overlooked, but critical boosts are having machines that function and machines that are intuitive, Lucky noted.

Retailers agree that refillable mug programs are a useful way to encourage frequent flier customers to stay brand loyal, appeal to customers who care about conservation, and promote the company name. However, mugs haven't fully recovered from the COVID-19 pandemic.

"A mug program is important, but it has declined in the last couple years due to COVID," Servais told Convenience Store News. "Seems like it is going to take a while to get it back. We are up in new cups, but down in refills all of 2021 and 2022. I am not giving up on refills."

Hot Dispensed Beverages

Coffee is both a stalwart component of c-store beverage programs and the offering that can tank a program's reputation if consumers perceive it to be stale, burnt java that's been sitting on the burner all day. The good news is that c-store customers don't necessarily require gourmet coffee made from beans with complex flavor profiles to be satisfied.

"A quality cup of coffee. That's all that matters to our guests," Servais pointed out. "Problem is, coffee is very personal and every person describes their quality cup of coffee differently."

Coffee drinkers favor the retailers that they trust to give them what they want, how they want it. At Kwik Trip, customers have begun shifting their preferences toward Colombian and dark roasts over light roast house blends in recent years. In addition to meeting customer tastes, the segment strongly benefits from simple freshness.

Bean-to-cup brewers are another on-trend way to offer the key freshness busy customers seek, according to Ryan Ratcliffe, category manager of dispensed beverages at Maverik — Adventure's First Stop, the Salt Lake City-based operator of 400 c-stores across 12 states.

"Having bean-to-cup accomplishes that without wasting a bunch of coffee. You can also provide all your customers' favorite blends all day long," he said. "Also, as cold coffee is trending, bean-to-cup allows customers to enjoy their favorite coffee hot or cold and customize it however they would like."

The appreciation for customization extends to a well-stocked coffee bar with ample selections of flavors and syrups and enough space to accommodate multiple customers at once. Dash In's Lucky advises retailers to also consider sensory attributes.

Cold Dispensed Beverages

Customization at the soda fountain has gotten a lot of attention in recent years, but Servais casts doubt on the notion that equipment like Coca-Cola Free-style and Pepsi Spire units are particularly appealing, despite their proliferation in the last few years.

"This is an old and tired part of dispensed. Soda is dying," Servais said. "Energy and alternative beverages are taking the fountain heads. The Coke Freestyle is viewed by many as 'cool to play with,' but when there's a line in front of it to get a drink because it takes longer, that is a turnoff."

Maverik has taken a different approach and found success by going beyond such specialty customization single units. Inspired by the soda shops that are popular around its Salt Lake City headquarters, Maverik's soda mixology program encourages customers to build their own unique beverages by combining soda with various syrup flavors, sweet creams, fruit wedges and cubed or nugget ice — all for one base price.

The retailer's larger store format allows multiple customers to take their time and experiment, but for operators that want to offer exciting soda mix-ins in a limited space, Ratcliffe recommends coconut, vanilla, peach and raspberry as some essential must-have flavors.

"The fun of the program is we can recommend and rotate different flavor combinations, but it's all up to the consumer which is going to be a keeper, or if they'd prefer to keep mixing something fresh and new," Ratcliffe explained.

Frozen Dispensed Beverages

Positioning frozen dispensed beverages as a tie-breaker in consumers' minds can be more challenging. Kwik Trip has experienced "a lot of success" since launching its Fresh Blends smoothie program several years ago, contributing to its win as the CSNews 2020 Cold & Frozen Beverages Innovator of the Year, but limited-time offers (LTOs) are difficult to execute and machines are very maintenance-heavy, Servais said.

"We are happy with the program though," he added. "It has added gross profit to dispensed beverage and brought us the frozen smoothie guest."

Despite the segment's difficulty, Lucky believes that LTOs can fill the need for the occasional unique product. "Seasonality as well as trending flavors from solid beverage partners can [also] help with picking a few to several flavors a year or even creating a proprietary flavor," he noted.

Iconic branded slushies and slushie flavors can serve as true trip drivers, as customers are much more likely to visit stores with the options they think of as classic over those with generic alternatives.

"Everyone knows and expects to see Coke, cherry and blue raspberry on the frozen drinks menu," Lucky pointed out. "Frozen beverages are essential during the 100 days of summer, when a site is near a school and when people need an icier beverage treat."