Caffeine Rush

Hot-beverage programs excelling in coffee and moving beyond.

By  Amanda Baltazar, Freelance writer

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It’s midday, and the coffee urge has Ted passing three c-stores en route to his local Starbucks, where he plunks down $6 and change, then returns to his car and goes back to his office.

This wasn’t a social trip with friends or a pause for chilling out. This was a sale each convenience store could have had—but didn’t.

Yet that might change. A recent operator survey by Chicago-based research firm Technomic reports 50% of convenience-store retailers said they would like to expand their hot-cappuccino program. Another 28% are interested in introducing an espresso-based program, and 32% want to expand their hot-cocoa program.

In the decade since the industry began embracing fresh-brewed coffee as a breakfast builder, the c-store channel appears primed to expand into gourmet blends.

And there’s money to be made in hot beverages. At CSP’s recent FARE (Foodservice at Retail Exchange) conference in Chicago, Tim Powell, principal and c-store practice lead for Technomic, pointed out that in 2012, hot dispensed beverages constituted more than 30% of all c-store foodservice sales, generating $3.5 billion in sales. And these hot-beverage consumers rarely buy only coffee.

“Beverage is often the impulse driver when it comes to coming into a convenience location,” says Sharon Porter, director of sales and marketing for Insight Beverages, a manufacturer of dispensed-beverage solutions based in Lake Zurich, Ill. “It’s often the impetus for other purchases, so it’s important to get that customer in.”

And hot beverages—coffee in particular—have wide appeal. According to the National Coffee Drinking Trends study released earlier this year by the National Coffee Association, 83% of American adults drink coffee—and it’s a daily habit for 63% of us.

Go Gourmet

Convenience stores, says Powell, need to become a destination for coffee. One way is through gourmet coffee.

“Specialty beverages are becoming more mainstream,” says Mike Sherlock, vice president of fresh food and beverage for Wawa, Pa.-based Wawa. “Starbucks started the trend and changed consumer tastes.” Driving this category are cappuccinos, lattes and choices of flavorings and types of milk, he says.

Consumers believe they deserve these small treats through the day, Sherlock continues. And because the drinks are a pick-me-up and an indulgence and can be customized, they’re an easy way for convenience stores to appeal to many demographics at once.

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