The coffee business is vitally important to the convenience store business and when managed and executed well, it can be a powerful strategic and differentiating asset. Granted, competition from all sectors and a more discerning customer have made this category much more challenging over the past decade, but that has also improved coffee program quality in the convenience store industry.
Dispensed beverages –– coffee, in particular –– are the foundation of any foodservice program in convenience stores. This is the most important building block that operators must get right before expanding into the prepared food side of the business. But too often, it is overlooked, according to the foodservice experts on the Convenience Store News How To Crew.
Before thinking about expanding and elevating your coffee program, it’s a good idea to take stock of your existing program to make sure you have the basics buttoned up first. Is the quality and taste of your coffee consistently good and fresh? Is the staff well trained and attentive to the program 24/7, and especially focused on the coffee area during peak times to make sure it is kept well stocked and clean? Do customers rave about the quality and taste of your coffee? Do customers make special requests for more flavors and coffee styles? Is your current coffee sales volume high and trending upward?
If the answer is “yes” to the above questions, you may be ready to take your coffee program to the next level. If you’re wondering how high your coffee sales volume should be before considering program expansion, several of our How To Crew experts said the minimum should be 100 cups per store per week, while others pegged the number significantly higher –– at 150 to 200 cups per store per week.
Most of our experts noted, however, that numbers don’t tell the whole story. In fact, numbers are “virtually impossible to pin down since coffee volume is very regional and tied closely to weather, as well as type of location,” one How To Crew member said. Neighborhood store coffee sales volume, for example, would be considerably lower than highway locations or stores on commuter routes.
The rule of thumb that all experts seem to agree upon is that coffee sales should be upward trending before operators consider program expansion.
What’s next? Be sure to scope out the competition and know exactly who you will be competing against store by store before you expand and elevate your program.
“Competing with Starbucks is different than competing with McDonald’s or the convenience store across the street,” explained Mathew Mandeltort, corporate foodservice manager at Eby-Brown and a new member of the CSNews How To Crew. Clearly identifying the competition will enable operators to determine their market positioning “and the strategies and tactics needed to support that positioning,” he said. “Once you do that, your focus has to be on consistent execution of the gold-standard cup of coffee with a focus on quality, not on cost savings.”
Elements that can help operators differentiate and expand their coffee programs include elevated customer service, such as an assigned coffee hostess during peak times; consistent and attentive operating practices; an expanded and well thought-out condiment bar that supports coffee customization; branding and program image building; new flavors and varieties of coffee; and rewards/loyalty programs. As is true with expanding any aspect of foodservice, upper-management commitment to all enhancements undertaken is key to ensuring program follow-through and execution at store level.
Customer research and observation can also yield key insights.
“Weighing customer interest in a next-level program is important, perhaps accomplished through shopper intercepts, focus groups or other formal research initiatives,” said How To Crew member Donna Hood Crecca of Technomic Inc., noting that coffee can be positioned as part of a strategy to expand the store’s consumer base. “Are there consumer groups that you’d like to drive into your stores? If so, where are those consumers sourcing coffee?”
In addition to formal research, Crecca recommends operators visit area coffee outlets and observe who’s frequenting these outlets, what they’re buying, and what seems to be trending or missing.
Going from a good coffee program to a great program takes careful planning, financial investment and attention to detail. It’s important for operators to know how many additional resources will be required to expand their program and commit fully to that investment before kicking off the program.
“Many people mistakenly believe that taking something from average to very good to great is linear in nature. It’s not. It’s exponential,” said Mandeltort. “To go from good to very good is not twice as hard, it’s 11 times as hard. Also, understand that when you go to the next level, not every one of your customers may be thrilled with the move.”
Maurice Minno, principal of foodservice consultancy MPM Group and a CSNews How To Crew member, concurs. “Whenever a change to the current coffee program is considered, always consider your existing coffee customer base and retaining these customers as the program evolves to the next level,” he said, adding that operators should incrementally graduate current customers to the next-level offer. “Do not, under any circumstance, move your coffee program directly to the next level and alienate your existing customer base in the process.”
While enhancing the coffee product itself is integral to any next-level program, the customer service aspect of the coffee program is equally important to enhancing the overall image, our How To Crew experts agree. “Become coffee customer centric,” Minno said. “Focus on taking your coffee customer relationship management to the next level as well.”
Retailer experts on the CSNews How To Crew also emphasize the importance of training and retraining to ensure proper execution of the new and expanded program, as well as a focus on overall merchandising and presentation –– including graphics and signage –– pricing, and marketing and promotions to enhance the perception and value of the new program.
BEST MERCHANDISING PRACTICES
Operators using glass coffee pots should seriously consider shifting to airpots and/or thermal urns as they take their coffee program up a notch because these systems best preserve flavor, aroma and temperature, according to How To Crew members.
“Studies I have conducted show that consumers are more concerned with getting hot and fresh coffee than the vessels the coffee is dispensed from, but some feedback I have received states that consumers view glass pots as being somewhat outdated,” said How To Crew member Paul Pierce, a former foodservice executive at c-store chains 7-Eleven Inc. and MAPCO Express.
A solid coffee program should include regular, decaf and dark roasts, and expand from there. Some add-on options include flavored coffee (hazelnut and vanilla are the most popular), as well as organic coffee or Fair Trade coffee, depending on the customer base.
“Consumer research shows that you can get very high levels of consumer preference coverage (upward of 80 percent) by simply offering four different varieties of coffee,” Mandeltort said. “After that, the gains are incremental in nature.”
He also noted that operators often confuse variety with the number of options and flavors offered. Instead, operators should focus on a well-designed condiment bar and offer customers ample ways to customize their coffee with a wide variety of creams, milks, sweeteners, syrups, toppings, etc.