Java Jolts Beverage Sales

According to a recent study from the National Coffee Association, more coffee-drinkers than ever before say their favorite brew improves mental focus and provides health benefits. Not surprisingly, consumption of coffee now surpasses that of soft drinks—and while the gap is still narrow, daily consumption of coffee is pointing directionally higher.

Young adults are the fastest-growing group of java fans, consuming an average of 3.2 cups per day as they seek a variety of blends from which they can choose, facts that comes as no revelation to Wilson Farms’ category manager Richard Pajak.
“Today’s consumer is definitely more educated than in the past, especially about different types of coffee blends and countries of origin,” Pajak said. “Fair trade or rainforest select, they’re looking for a higher grade than the home-brewed Maxwell House blends of the past. “

Pajak credits advertising for consumers’ growing awareness of different types of coffee and the socioeconomic implications of drinking it—behaviors that led Pajak to introduce fair trade coffee last year and rainforest selections this year.

Higher-Quality Brews Ahead
In the coming years, Pajak sees a more discerning coffee consumer who will be more demanding of higher quality, as well potential for more fat- and sugar-free offerings driven by consumers’ growing awareness of healthy eating.

Pajak’s Williamsville, New York-based company typically runs different limited-time coffee offerings every quarter. Last year’s offerings, in addition to the fair trade, included a highly-caffeinated extreme blend—the only one that became a permanent fixture in the company’s repertoire, which usually numbers six different blends.

“We do a full market review quarterly to make sure we’re on point with consumer trends, then evaluate each promotional item after its promotional period,” Pajak said.

The biggest booster for coffee sales at Wilson Farms is offering coffee and breakfast baked-goods combos, sandwich combos and even pairing coffee with gum or mints. “In our competitive market, we are running slightly up to flat,” Pajak said. “We’ve been challenged this past year with some competitive influences in the coffee market, specifically Tim Horton’s and Dunkin’ Donuts, and the rise in coffee advertisement from McDonald’s.”

For 2009, Pajak predicts consumers will be looking for a higher blend—especially in cappuccinos—than the sugar-based “bubbacinos” most c-stores currently offer. “That’s really where McDonald’s is looking right now,” he said. “They’re offering a mid-café in many of their stores.”

Condiments Gain Strength
Coffee marketers are clearly targeting young adults. “I see a lot of non-teens buying coffee as well, but marketers are certainly targeting that group,” said Jerry Weiner, vice president of foodservice for Rutter’s Farm Stores in York, Pa. He described the marketing push toward adolescents and young adults as a natural offshoot of marketing energy and highly caffeinated drinks—a trend Weiner accommodated by having two hot caffeine beverage dispensers in Rutter’s 50-plus stores.

“On one side we’ve got the highly caffeinated coffees,” Weiner said. “I also put in a separate machine for hot energy products that are highly caffeinated and powdered cappuccino products in their highly caffeinated versions. I have to say, my highly-caffeinated coffee is our No. 3 item, higher than I would have given it credit for, right behind the Colombian and our regular coffee.”

Rutter’s has already offered a “green” coffee, and Weiner—who constantly looks to offer all the hot beverages anybody could want—is about to introduce a fair trade blend as well. “I’m not exactly sure where fair trade will fall once it hits, but my belief is it’s going to be pretty high on the list as well,” he said.

Weiner takes the same “cover all the bases” approach with condiments, providing every coffee additive a dedicated java drinking customer could possibly want, including sugar in the raw, powdered and liquid sweeteners and a full complement of flavored syrups, sprinkles and marshmallows—plus nine different flavored creamers in addition to all the milks and whipped cream.

“The idea is that whatever you want in your coffee, it’s available at our stores,” Weiner said. “I’m trying to take that same approach on the product side by having an array that covers pretty much the entire gambit of consumer desire.”

Don’t Forget Decaf!
While the emphasis is on exotic flavors and extreme caffeine, older customers often seek a decaffeinated product, perhaps because they become more sensitive to caffeine as they age. “Our decaffeinated fountain products always do better in stores with older demographics,” Weiner said observed. “Those are usually not very successful with younger customers.”

One concept Rutter’s is testing right now is its own freshly-brewed iced coffees. “We brew our own iced tea, so we already have the equipment we needed to brew cold coffee,” Weiner said. “There’s a big push for cold coffees now, and I think it’s going to be something that will set us apart.

McDonald’s and Dunkin’ Donuts both push iced coffees, and Starbuck’s probably sells as much iced coffee as they do hot, Weiner pointed out. “There’s certainly a consumer demand for that type of product line. I’m looking for that to be a pretty big piece after we get out of the winter months,” he said.

In Idaho, Oasis Stop ‘N Go category manager Troy Willie said his customer base willingly samples every hot coffee beverage and accompanying condiment the company offers.

“I often hear the comment from customers that they value being able to customize their coffee the way they like it—with all the toppings, syrups and fresh cream,” Willie said. “They tell us they appreciate the value when compared to the price of a standalone coffee shop. Of course there will always be the customer that wishes to steer through the dressed up coffee bars and expanded choices for a regular coffee and we accommodate them as well.”

Rewards Drive Sales
Each Oasis Stop ‘N Go location offers four core coffee blends that remain unchanged and are also consistently found in each of the company’s stores in the same position. Store managers then either experiment with offering a fifth coffee blend or rotate a flavored coffee in their sets.

“We did bring back seasonal flavors of cappuccino beverages, one new flavor and another flavor returning from last year that was very popular,” Willie said. “The seasonal flavors have a positive impact on sales and help maintain a fresh program. We have also discussed offering a green coffee but have not made the commitment yet.”

In addition to seasonal flavor offerings, Willie uses “any size” and combo promotions to keep coffee sales perking, and has targeted his best coffee customers with loyalty offers through the company’s KickBack Rewards card.

“Our offers are supported through signage both inside and outside of the store, and by outside media including radio and billboards,” Willie said. “We have branded our coffee, expanded and upgraded our coffee bars, placed new equipment, and dramatically expanded offerings. Feedback from our c
ustomers and employees has been an important part of this evolution, and I’m enthusiastic about our results and future opportunities.”


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