Convenience stores are expanding their brew programs and condiment offerings, allowing guests to customize each cup.
By Heather Henstock, Contributing Editor.
Jerry Weiner watched in awe as a customer crafted coffee to her specification at a Rutter’s Farm Store. She combined three coffee varieties in her cup and added at least five different creamer flavors from the condiments bar.
“She even put whip cream and sprinkles on top of that,” said Weiner, vice president, foodservice for the York, Pa.-based convenience store chain, which operates 56 stores. He introduced himself to the customer in her mid-thirties and asked if her personalized coffee is the same every time she makes it. She smiled and said, “Oh no, it never comes out exactly the same.”
For this Rutter’s customer, like many c-store patrons, the appeal isn’t the consistency of the coffee beverage. It is the customization.
Most c-stores have embraced the consumer’s desire for customization by offering broad coffee and condiment selections and stations for customers to prep their cups the way they like. C-stores are improving coffee quality in line with greater demand for gourmet varieties and taking great strides to use filtered water to ensure flavor consistency from store to store. Some operators push the coffee envelope further by promoting higher-caffeinated brews and functional ingredient additives.
With c-stores putting much focus on the coffee category—consumers stop to buy coffee at c-stores more than they fill up their cars—according to the National Association of Convenience Stores (NACS). The association, which recently released its 2010 State of the Industry report, found that average store sales of coffee, cappuccino and specialty coffee reached $56,221 last year, representing about 90% of hot dispensed beverage sales.
“We’re in an era of options,” Weiner said. “People want to personalize everything. I find it in the food and certainly in coffee and fountain drinks. Everybody is making things the way they want it, and they become very particular about it. It becomes their beverage or their sandwich, salad or whatever they’re consuming.”
Rutter’s sells seven different coffees, available 24 hours a day. Most condiments, which include milks, creamers, whip cream, and caramel and chocolate syrups, are merchandised in a self-service cold well.
Aside from satisfying demands, condiments help convenience stores compete more effectively with the likes of Starbucks, Dunkin’ Donuts and other coffeehouses by leveling the playing field on niche flavors.
Wilson Farms, for example, embraces the customization movement by offering a broad selection of coffee varieties, cappuccino and a large assortment of creamers, sweeteners and whip cream at its stores throughout Buffalo, N.Y. Giving customers the opportunity to make their coffee exactly how they want is the main message in Wilson Farms’ coffee marketing.
“At Wilson Farms, you’re the ‘mixologist’ when it comes to your morning cup of coffee. Add a little of this or a little of that, and don’t forget to top off your cup with our 100% whip cream,” the company advertises in stores and on its Website.
Coffee Condiments Key
Nearly three-quarters of consumers add something to their coffee, according to a recent annual poll by the National Coffee Association (NCA). The association asked consumers what they added to the coffee beverage they consumed yesterday. Just 26% took their coffee black. The rest added some variety of sweeter, milk/creamer or both. (See sidebar to the left for a complete breakout of coffee additives.)
With the majority of customers adding something extra to their coffee, an organized, well-stocked and well-maintained coffee condiments bar should be a high priority for c-stores.
“If there’s something that can go in coffee, we try to carry it,” Weiner said. “We took the same approach with coffee as we did the rest of the foodservice program by putting a lot of options in front of customers and letting them do what they want.”
Moving beyond creamers and sweeteners, some convenience stores have explored functional additives, such as vitamins and herbs. 7-Eleven, Thorntons Inc. and Village Pantry are among the c-stores that have tested vitamin boost shots or infused “energy coffees.” 7-Eleven’s Fusion Energy coffee, for example, contains ginseng, guarana and yerba mate—herbs linked to boosting energy and sharpening mental alertness.
A Beverage for All Dayparts
With so many ways to doctor their java, Americans are consuming coffee for more than just breakfast. C-stores have a clear advantage by meeting this 24-hour coffee demand. High time for coffee sales in c-stores remains about 5-10 a.m. However, the percentage of coffee sales after that time slot has increased significantly. Rutter’s, for example, generates 38% of coffee sales after the morning rush. Other c-store chains report similar growth in coffee sales during afternoon and evening dayparts.
“Because customers can mix and match in so many different ways, coffee has become an afternoon liquid snack,” Weiner said.
Another trend c-store operators should note is a resurgence of younger coffee drinkers, according to the National Coffee Association. In the 2011 NCA study, 40% of those in the 18-24 age group said they drink coffee daily, up from 31% in 2010 and echoing 2009’s 40%. For those aged 25-39, 54% said they drink coffee each day, up from 44% in 2010 and ahead of 2009’s 53%.
Among the 18-24 group, gourmet coffee consumption leaped to 26% versus 19% in 2010. Among the 25-39 year olds, it jumped from 21% to 32%.
“Among the younger age group, coffee has taken on a larger role,” said Joe DeRupo, NCA’s communications director. “Coffee has become not only a morning beverage, but one that comes in many varieties that is consumed during different times of day and serves different purposes.”
All age groups are seeking higher quality coffee, more variety and perhaps a little more caffeine. TravelCenters of America (TA), Cumberland Farms and Shell Food Marts are among the c-store chains dabbling in higher-caffeinated coffees. TA describes its TA Extreme as a highly-caffeinated, dark roast gourmet blend and said drivers have dubbed the brew as “the 500-mile coffee.”
The higher caffeinated coffees debuted in c-stores about three years ago with much fanfare, but operators report sales have leveled, especially with the growth of two-ounce energy shots. The high-caffeine brews seem to work best when marketed in stores that serve specific niches, such as college towns or stores that cater to long-haul drivers.
Coffee Drinkers Loyal
Whatever the niche, most customers who purchase coffee from a c-store came to that store intending to buy a brew. Eighty-six percent of coffee purchases are planned, and 7% are purchased on a deal, according to new data from NPD’s Convenience Store Monitor. Consumers of coffee and other dispensed beverages are high frequency buyers who represent 68% more visits than the average convenience store customer.
“The fact that the buyers of coffee and other dispensed beverages are defined differently than the typical convenience store visitor presents an incremental opportunity for c-stores,” said David Portalatin, executive director of industry analysis at NPD. “If a convenience store can deliver on what dispensed beverage buyers are looking for in terms of product quality, a rewards program, and a clean and bright store, it can attract a loyal new customer base.”
C-stores are striving to do just that with their coffee programs. Along with increasing quality and variety with their coffee, they are focusing on what c-stores do best: fast service. Thorntons in Louisville, Ky., for example, amps up its coffee staff during the busy morning rush. Among the highlights of the company’s revamped coffee program, which it is implementing this year, is the addition of coffee hosts and hostesses to greet and serve coffee customers.
By focusing on their strengths of speedy service and coffee customization, c-stores are attracting a loyal following of coffee drinkers. Stellar store-level execution of each coffee program along with smart brand marketing and merchandising can make coffee an even bigger draw for c-stores.
What Consumers Add to Their Coffee
Nearly three-quarters of Hot coffee customers polled by the National Coffee Association (NCA) said they added one or more condiments to their morning brew. Here are the most popular condiments and the percentage of customers that added them to each cup.
Liquid creamer or dairy creamer, 31%
Artificial sweetener, 17%
Half & Half, 14%
Whole milk, 10%
Reduced fat milk, 9%
Fat free/skim milk, 5%
Liquid nondairy creamer flavored, 15%
Liquid nondairy creamer unflavored, 2%
Powdered creamer, 15%
Didn’t add anything, 26%
Source: National Coffee Association’s 2011 Trends Data.