Hot-beverage programs excelling in coffee and moving beyond.
Who’s the Customer?
Done right, a hot-beverage program will attract just about everybody, but there are a few standout demographics, says Tim Powell, principal and c-store practice lead for Technomic Inc., Chicago.
A hot-beverage program might attract more women—or might encourage them to buy something when their spouse stops by for gas or a snack. And it could attract more mothers, who can offer hot chocolate to the kids and pick up a tea for themselves. It can also convert the casual c-store user into a more frequent customer, Powell says.
More women can be drawn to a hot beverage program if a convenience store has healthier items, says Sharon Porter, director of sales and marketing for Insight Beverages, Lake Zurich, Ill. It’s vital to have hot and iced tea, and a new offering is frozen tea, served out of frozen dispensed machines.
Packaged Facts’ research suggests women are already more likely than men to get hot tea, hot chocolate and cappuccino at a convenience store, says David Morris, managing consultant for Packaged Facts, Rockville, Md. “This provides ammunition to continue to enhance the variety and quality of these beverages,” he says.
And if you offer plenty of flavored coffees, you’re likely to attract a Hispanic customer, Powell says, “because they are looking more for flavored beverages.” Hispanics are an easier demographic to draw into a hot beverage program, he says, because half of them go to c-stores at least once a week and a quarter go twice or three times.
The National Coffee Association shows this demographic has the highest coffee consumption—76% said they drank coffee the prior day, compared to 64% of Caucasians. And almost a third of Latinos said they consume a gourmet coffee drink daily. Considering Latinos are a demographic that’s growing quickly, it makes sense to target this group.
All Drinks Need a Sidekick
Caffeine’s good, but sometimes it’s better with a snack. Breakfast sandwiches, granola bars and baked good are all popular, and at Pilot Flying J, fresh oatmeal is, too.
Oatmeal sales are growing, says senior category manager Whitman Harson, “especially where we have started offering fresh-made oatmeal (in 145 stores) with toppings.”
It’s served straight out of the soup bar in those stores; in others it’s available in packets so customers can make it themselves with hot water. “It ties in really well for a breakfast,” he says. “It’s important to have things that go with coffee.”
Also popular are breakfast sandwich combos, which are available 24/7. These are particularly popular with holders of Pilot Flying J’s loyalty card, because they get a discount on a breakfast sandwich when purchasing a coffee.
Add-ons to coffee sales are “a natural progression,” says Tim Powell, principal and c-store practice lead for Chicago-based Technomic. “It’s a growth area.”
Combo meals provide very fast speed of service and a perception of value and variety, says Darren Tristano, executive vice president for Technomic. And the best ones, he explains, can be personalized, “giving customers the ability to pick and choose.”
Combos are a driver for Landmark Industries’ hot-beverage program. The chain combines coffee with its Jimmy Dean breakfast program for a slight discount.
“And every now and then we throw a manufacturer coupon in—buy a coffee and get an energy bar or breakfast bar for free,” says Sonny Talje, category manager for foodservice, “and we’re working on ‘Save 75 cents on any one Altoid tin when you buy any coffee, any size.’ Every now and then we do a coupon. It does help sales.”