Prepared Food + Hot, Cold, Frozen Dispensed Beverages
Got coffeehouse passion? Here are some c-store strategies for the prime hot-beverage selling season
Convenience store customers everywhere have been waking up and smelling the rich improvement of coffee and hot beverage programs, now that the category is at the cornerstone of virtually all fresh foodservice initiatives and new store prototypes. Steering the offering in the direction of coffeehouse quality/loyalty is the ambitious goal of many in this new era of c-store java and its hot-beverage cousins.
"A complete hot beverage program could be considered a c-store must now, but only if you do it right," said Paul Servais, Kwik Trip Inc.'s retail foodservice director. "You have to have a quality program, great beans, great flavors and great condiments. We think of it as coffeehouse coffee without the coffeehouse price."
Speaking about CEFCO's "Your Way" hot beverage program, Brian Matlock, director of foodservice, similarly said, "It's like coffeehouse quality at a fraction of the price."
While many retailers in the convenience channel stick with a consistent program year-round, they recognize there are additional sales opportunities during the colder months. Kwik Trip, for example, sells 35 percent more cups of coffee in the prime winter season, according to Servais.
With that in mind, here are a few ways to leverage the hot beverage category during this especially opportunistic time of year:
â¢ Spice up the offering with limited flavors, varietals. Coffeehouse beverage customers look forward to the limited-time flavors of the holiday season, and so, too, will c-store hot beverage customers. Last autumn, Wawa introduced a Pumpkin Spice flavor in its cappuccino offering, and it was so successful that this year, it rolled it out as a limited-time coffee flavor, too, according to Mike Sherlock, director of foodservice.
"We've done other flavored coffees in the past, but this one really works, especially since we made it more of a theme within the store," he said. There are also limited-time pumpkin spice bakery items available as part of the flavor push.
Wawa's strategy includes bringing in new coffee varietals two or three times a year. "In the past, we brought in the 100-percent Columbian coffee; now it's a part of our permanent offering," Sherlock explained.
Overall, Wawa strives to limit the number of hot beverage varieties to eight or nine at any one time, substituting country-of-origin varietals out when a new one is brought in and evaluating them on a comparison basis.
"We want to make sure that when we bring in a new variety, it brings in incremental sales and grows the category overall."
â¢ Don't forget the accoutrements. Along with the usual cream and sweetener offerings, hot beverage accoutrements are expanding to include various spices, syrups, whipped cream and specialty sweeteners, all referred to now as condiments. The prime selling season is a good time to test out/trade out new offerings here, as well.
CSNews recently reported that Thorntons' condiment section was expanded in all stores to include PC-style creamers, bulk creamer, Coffeemate pump creamer and a "Hot Treat Center" featuring fresh whipped cream and chocolate, caramel, raspberry and white chocolate sauces.
Of course, space and maintenance of the section are always big concerns in c-stores, so the holiday time is a good time to test new condiments, offering them on a limited-time basis or only keeping year-round what works best.
Sherlock said Wawa is continually looking at condiments for areas of opportunity. "We constantly review what our choices are, making sure that if something new is brought in, we have enough customer demand for it."
â¢ Make sure the flow is optimal. Just in time for this year's prime selling season, Kwik Trip reconfigured the coffee bar space and flow in all its stores, expanding cappuccino heads, as well as the area where customers can set their beverage down and make "Great Coffee, My Way," as its cup slogan reads.
At a time when hot beverage traffic is at its highest, c-stores should make sure they have a good flow in the area, especially since most are completely self-serve for the customers.
At Wawa, "we empower our customers," said Sherlock, who noted that the company breaks the area into three sections: the brewing station, the pour station and the condiment aisle. Set up behind the counter, the brewing station is where associates brew the coffee and make sure they're keeping up with the pace of customer demand, ensuring coffee is at its freshest and also, interacting with the customers, especially during the important daypart, according to Sherlock. The pour station and condiment aisle are both geared to the customer servicing him or herself, and are ample and well-maintained for heavy traffic times.
â¢ Seriously limit free or deep cost-saving promos. The idea behind freebies or severely discounted hot beverage promotions is to promote trial, increase traffic, and say "thank you" in hard economic times, but this should be done on a limited basis. It is not to get customers to expect reduced prices that ultimately don't allow for good quality or profits on a daily basis.
In the past, Kwik Trip ran a 59-cent hot beverage special for weeks at a time, but the chain doesn't do it anymore because "it kills gross profit," said Servais. "The last time we ran it, we didn't have a huge increase in sales â current customers just got a better deal, which was nice for them, but it didn't increase the business at all."
Cumberland Farms recently brought back a free coffee program, but it is offered on a very limited basis. For three Fridays in November, the chain hosted "Free Coffee Fridays" at participating locations, offering one free cup per customer. The java giveaway was conducted to promote its "100-percent Arabica bean coffee," which costs 99 cents for any size on regular business days.
â¢ Work with suppliers to ensure consistency during specials. When special promotions or varieties are introduced, as they often are during the prime selling season, it's imperative that c-stores work with their suppliers/coffee roasters to maintain high standard levels, both in quality and supply. "So as the volume rises, we work with them to make sure the same standards are in place," said Sherlock.
He added that a good supplier relationship is imperative from a product development standpoint, too. "It's extremely important that our team works closely with the coffee roasters themselves, making sure we can bring innovation to the category."
â¢ Keep watch on the brewing competition. Many forward-thinking retailers keep close watch on other channel competition, as well as on beverage manufacturer news, and brew their new ideas and flavors from there.
One retailer to watch is Dunkin' Donuts, which recently announced a new, permanent addition to its beverage menu: Mint Hot Chocolate. Also, its lineup of seasonal flavored lattes includes new Cinnamon Swirl and returning holiday favorites such as Peppermint Mocha and Gingerbread. As always, all varieties of Dunkin' Donuts coffee and lattes are available hot or iced.
For comments, please contact RenÃ©e M. Covino, Contributing Editor, at [email protected].
A profile of U.S. coffee drinkers:
- American coffee drinkers consume approximately 3.1 cups per day on average.
- The average cup size is 9 ounces.
- Fifty-two percent of Americans over the age of 18 drink coffee every morning.
- Thirty percent of the population drinks coffee occasionally.
- Sixty-five percent of consumers add sweetener.
- Coffee drinkers will spend $164.71 per year on coffee, on average.
- While women indicate that coffee is a good way to relax, men say coffee helps them get their job done.
- Women are generally more concerned about the price of coffee than men.
- Of the 100 million U.S. daily coffee drinkers, 30 million drink specialty beverages such as lattes, cappuccinos and mochas.
- The average price for these specialty drinks is nearly twice that of a regular brewed coffee.