How to Win the Battle of the Brews

Suddenly everybody’s a coffee expert, even the neighborhood pharmacy. So what are c-stores doing to maintain customer loyalty as the competition over brewed beverages heats up?

By Marilyn Odesser-Torpey, Associate Editor.

Et tu, Walgreens? With the opening earlier this year of a new Upmarket Café in Walgreens’ new Chicago flagship store, shoppers can have a barista brew up a coffee concoction while they wait for the pharmacist to fill their prescriptions.

The last thing convenience stores need is more coffee competition, but some of these retailers are keeping their java-loving customers happy— and loyal—by using state-of-the-art brewing and holding technologies, focusing on staff training and getting creative with promotions.

In September, Rutter’s Farm Stores debuted a barista-staffed format, offering an expanded menu of ground-and-brewed-to-order, hot and cold, regular or decaf espresso drinks. The format was initially introduced in two of the chain’s 57 locations—one in a downtown college area, and the other on a heavily-traveled major highway, said Vice President of Foodservice Jerry Weiner. Within a few weeks, the coffee bar was installed in nine additional stores.

“Eventually, we would like to roll out this concept to every one of our stores that has the space for it,” said Weiner, who partners with S&D Coffee for its brew program.

With its variety of eight flavor shots and multiple toppings and sauces, the coffee bar was designed to make Rutter’s a destination, not only in the morning, but throughout the day, whenever customers might be in the mood for a treat. Weiner also expects the new format to appeal to younger and female customers.

This is not the York, Pa.-based chain’s first foray into the gourmet coffee arena. Weiner explained that he tried a similar concept about 12 years ago (“before coffee was cool”), but found it difficult to find the equipment that would deliver the speed and quality consistency Rutter’s required.

“Since then, the grinding and brewing technologies have dramatically improved, and there are a myriad of equipment options,” he said. With the new technology, the prep time for preparing a freshly-brewed high-quality espresso drink is under two minutes.

Back to Basics
While a growing number of aficionados are craving cappuccinos, Americanos and other espresso-based specialty brews, the majority of customers are simply looking for a great cup of regular Joe, said Dave Jenkins, co-founder of Inverness, Ill.-based marketing and research consulting firm CustomersDNA. In a recent study, the firm found that regular coffee still accounts for 63% of hot beverage sales, while specialty coffees account for 25%, chocolate drinks 7% and teas 4%.

“Being competitive at the a.m. daypart may not require an exhaustive list of specialty coffees, but you do need customers to know that you offer a great cup of coffee,” Jenkins said.

Circle K, another S&D Coffee customer, spent months conducting in-store testing of equipment from various manufacturers to find one that would not only prepare coffee to the company’s standards, but would also maintain its just-brewed aromas and flavors throughout hold periods.

In mid-September, the southeastern U.S. chain announced a partnership with Wilbur Curtis to put the manufacturer’s Gemini brewer with Intelli-Fresh technology into Circle K’s 6,000 U.S. stores.

“Coffee is the undisputed anchor of the a.m. daypart, but it’s easy to get lost when rationalizing equipment selections against key operational considerations,” said Trey Powell, director of national procurement U.S. for Couche-Tard/Circle K stores. “The Curtis platform enables our teams to deliver on the promise of truly premium Circle K coffee—brewed fresh and ready for guest customization.”

Powell described the Intelli-Fresh system as “operator friendly,” because it maintains pre-programmed serving temperatures by gently warming the liquid with intermittent bursts of heat. “This ensures a consistent and predictable temperature throughout the brew’s hold time,” he explained.

Automatic holding temperature maintenance is also a key feature of the $7.5 million brewing technology, Soft Heat by BUNN, that Altoona, Pa-based Sheetz is rolling out to its more than 400 stores in Pennsylvania, Ohio, West Virginia, Maryland and North Carolina. And Wawa, also based in Pennsylvania, made what the company’s Fresh Beverage Category Manager Mendy Meriwether, called “a big change from our store and customer perspectives” by replacing its traditional glass pots with thermal carafes.

Just as important as the right equipment is the right staff training, said Judy Dudte, food concepts division manager at Englefield Oil’s Duchess Shoppes throughout Ohio and West Virginia.

Employees are required to read and sign a “promise sheet” pledging to ensure consistent coffee freshness by dumping and cleaning the pots every 30 minutes, writing on each pot the time when it was brewed, setting a timer to remind them of the expiration time and keeping the coffee condiment bar filled and fresh,” Dudte said.

To prepare Rutter’s employees for their new barista role, the chain brought the equipment manufacturer in to conduct an “intense three-day training,” Weiner said. Eventually, he expects Rutter’s in-store personnel to handle the trainings.

Constantly creating buzz about your brew through promotions is another way to keep customers excited about and connected to your brand, Jenkins said. “And that means more than just running a promotion for a week, or even six months. It means constantly reinforcing the message through advertising, product development and food-pairing promotions.”

Both Kangaroo Express and Louisville, Ky.-based Thorntons, for example, use the Internet and other social media to stay connected with customers. On their Websites, both companies invite customers to come up with their own signature hot drinks using the flavor shots, creamers, toppings and other fixings available in the stores, then post their recipes to Facebook.

For its Bean Street Coffee, Kangaroo is running a contest with a $50 gift card prize to encourage recipe postings. It also offers special text-messaged deals and free refill alerts to customers who become members of its “Roo Club.” Meanwhile, Thorntons posts recipes for gourmet combinations on its Website, and made a YouTube video giving step-by-step instructions for making mint coffee.

“Loyals” Are Hungry for Value

Customers who make McDonald’s their primary coffee or breakfast stop are a loyal bunch; more so, in fact, than those who buy their brew at Starbucks and Dunkin’ Donuts, found a study by Inverness, Ill.-based marketing and research consulting firm CustomersDNA.

More than half of polled customers who purchased coffee at Starbucks said they also regularly visited Dunkin’ Donuts or McDonald’s for a hot beverage and/or breakfast over the course of a month. About the same number of Dunkin’ customers admitted to visiting Starbucks or McDonald’s. However, 62% of McDonald’s customers were identified by the researchers as “loyals” who did not visit either of the other two competitors during an average month.

Analysis of why they remain so loyal to the Golden Arches pointed to value and hot breakfast offerings. “A hot breakfast at a good value is a trump card for McDonald’s,” said CustomersDNA Co-founder Dave Jenkins.

“Coffee is just half of the equation, breakfast foods are a big part of the decision process and McDonald’s has developed a strong following with its breakfast offerings,” Jenkins said.

The study tracked the hot beverage-buying activities of 15,000 quick-service customers across all three major meal occasions and hot-beverage-purchase-only occasions over 12 months.


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