Quality, Variety impact hot beverage sales

by: Angela Altass

When it comes to hot beverages, consumers are looking for quality, good taste and variety. “Customers want quality and variety,” says Marc Rex, director, Fresh and Foodservice, Canada, Core-Mark. “It’s important to have the roast levels and the blend descriptions of coffee available.”

People, especially millennials, are also more interested in looking for certifications and knowing where the coffee they are drinking is coming from, says Rex.

Coffee is the foundation of any food service program, says Rex. Core-Mark recently launched two new coffee programs – Arcadia Bay Select and Timothy’s Coffee Programs. which provides customers with quality tea, coffee and cappuccino. Core-Mark’s Arcadia Bay coffee program marries fine varieties of coffees from around the world with an attractive marketing/POS and equipment partner program. Timothy’s coffees are Rainforest Alliance certified with light, medium and dark roasts available.

When it comes to marketing your hot beverage program, Rex emphasizes that cleanliness should be top of mind.

“Make sure your hot beverage area is maintained properly,” says Rex. “The condition of your store, inside and out, is important. A customer is not going to make it over to the coffee station if they have to go through a bunch of clutter to get there. Make sure your store is clean and organized.”

Coffee is the most popular beverage among adult Canadians, says Lesya Balych-Cooper, president of the Coffee Association of Canada.

“Coffee is even more popular than tap water,” states Balych-Cooper. “There are fluctuations over time but coffee consistently holds the most popular beverage spot with adult Canadians.”

Espresso Based Beverages

Both hot and cold espresso based coffee beverages are the fastest growing in popularity, adds Balych-Cooper.

“I think the biggest thing that I would say to convenience store retailers is to find a way to provide hot and cold espresso based beverages,” she says. “The espresso based specialty coffees grew from 13 per cent in 2013 to 23 per cent in 2017. It’s the largest growth area in coffee. If you have Americanos, cappuccinos, cold brews and nitro brews – those are the more popular ones in terms of rapidity of growth right now. These are growing very quickly. Coffee is a $6.2 billion industry in Canada and that means a lot of dollars when it grows that fast.”

Having a coffee has become an occasion, says Balych-Cooper.

“When you go into a place that serves coffee, you find a real community of perhaps seniors or people who are going to work and stopping for coffee and a chat with friends on the way,” she says. “Quality of the beverage has become more important. People used to look at price but now it’s very much more than a price point and the wonderful thing about coffee is that there’s something for every taste profile.”

There is a great deal of variety regarding coffee beverages, notes Balych-Cooper.

“In our most recent coffee trends study, we saw that most consumers are saying that they are much more or somewhat more likely to buy coffee when there are four things: when the level of roast is specified, it’s grown on farms that treat workers well, it’s grown in an environmentally stable way, and when the company supports the communities in which the coffee is grown,” states Balych-Cooper. “Millennials, the people who are under 35 years of age, are now the largest age cohort in foodservice. They are influencing everything that takes place in foodservice. They want choices and those choices have to include decaf.”

The Coffee Association of Canada welcomes new members and is interested in reaching out to convenience stores regarding their coffee programs.

“I think there’s a great deal that we can do to help consumers know that they can go to their gas station or convenience store and have a tremendous cup of coffee,” states Balych-Cooper.

Today’s consumers are willing to spend more for a good coffee, says Amy Brown, marketing manager, Franke Coffee Systems.

“According to the Allegra World Coffee Portal, today’s coffee consumers are driven by good taste and the freshness of their hot beverages,” says Brown. “Not only is taste and freshness of utmost importance, but also the ability to customize their beverages. Today’s innovative equipment is the perfect fit to take a convenience store’s core coffee program to a differentiating offering to compete with coffee giants in their marketplace.”

Franke Coffee Systems just released the A800 Fresh Brew, a bean to cup brewer in which the machine grinds whole coffee beans for each cup of coffee brewed.

“The A800 Fresh Brew produces a better tasting, fresh product and reduces product waste,” says Brown. “The machine features up to three coffee blends per machine, with consistency in cup quality through Franke’s innovative technology.”

Coffee Consumption Increasing

Consumption of coffee continues to rise, says Brown.

“According to the 2018 National Coffee Association’s National Coffee Drinking Trends Report, daily coffee consumption is at the highest level in six years, with 64 per cent of US consumers drinking coffee daily,” says Brown.

Coffee and hot beverages is an extremely important category, says Woody Stelnicki, managing director, Petroleum, Calgary Co-operative Association Limited.

“In 2017, many co-operatives in Western Canada, including Calgary Co-op, launched our private label coffee brand, Co-operative Coffee, at all our gas bar locations,” says Stelnicki. “As a part of this, we completed upgrades at all our locations that included equipment, counters and re-identification of coffee areas.”

Calgary Co-op gas bars sell only fair trade organic coffee and has participated in Fair Trade Coffee Day in May for the past nine years. Co-op gas bar locations have been selling fair trade coffee since 2007 and Stelnicki feels that consumer interest in organic and fair trade coffee continues to increase.

“Each year, the proceeds from the sale of fair trade coffee for that day are donated to different fair trade initiatives, generally for improvements in a fair trade coffee producing community,” says Stelnicki. “We participate in Fair Trade Coffee Day as it gives us another opportunity to give back. With Fair Trade Day, we give back to those communities that are responsible for providing us with such a high-quality product.”

Next to coffee, cappuccino is the biggest selling hot beverage at Calgary Co-op. When it comes to satisfying the hot beverage consumer, Stelnicki says that quality and value are important.

“Freshly brewed coffee that is hot and ready to,” is what customers are looking for, he says. High standards relative to the facilities, coffee areas and equipment – making sure everything is clean and well kept – is vital, he states.

Stores should do a periodic check to ensure that the volume of coffee that their brewer is yielding is correct, notes Tom Humphreys, petroleum operations manager, Peninsula Co-op, Saanichton, British Columbia.

“A 2.5 oz frac pack of coffee should be yielding about 65 oz or 1,820 mls,” says Humphreys. “If you aren’t getting the correct yield it will change the coffee quality and lower your gross profit.”

Most consumers will choose a coffee brand based on habit and routine, says Gene Grimm, marketing specialist, Van Houtte Coffee Services.

“They will naturally gravitate towards a brand they know and love because they have tried it many times and enjoy its consistent flavour,” says Grimm. “This means no matter where they are, their morning cup of coffee always has the same great taste. This is why brand recognition is a large factor that drives consumers into a location. Marketing these brands through POS material inside and outside a convenience store environment can help bring the consumer to your coffee station and ultimately buy a fresh cup of their favourite hot beverage.”

Van Houtte Coffee Services, a division of Keurig Canada Inc., is working closely with its mother company to focus on completing its conversion of all K-Cup pods to a recyclable format by the end of 2018.

“We currently offer more than 150 different varieties of K-Cup pods and are always introducing new selections including new brands, flavours and seasonal offerings,” says Grimm. “Our branded programs are always in development to help our client’s drive more customers into their locations.”

Van Houtte Coffee Services recently launched REVV coffee in K-Cup pods in two new flavours: Afterburner and Turbocharger.

“These amazing new products will give you that extra kick to fuel your day,” says Grimm. “Rich, smoky and bold flavours will have you cleared for takeoff. This brand is not for the faint at heart as it adds an extra kick to your morning cup of joe.”

Convenience store owners are looking for a service provider who can provide a quality product, timely service, variety of equipment and products, with tiered pricing to suit all budgets, and marketing/POS support tailored to their needs, says Grimm.

The term traditional has changed over the years regarding coffee, notes Grimm.

“It used to mean served out of a glass pot and warmed on a burner,” he says. “This trend is now extremely rare, if not obsolete in most convenience store locations. Thermal server technology has enabled c-stores to keep their coffee fresher and hotter to enable the taste quality to remain more consistent. This means less coffee being wasted, as well as less customer complaints.”

New Trends

With new trends on the market, the traditional coffee program offering sometimes isn’t enough to get all consumers to come into your store, says Grimm.

“In recent years, we have seen a large trend for more fair trade and organic options,” says Grimm. “From a public environment standpoint, we’ve found customers are looking for a fresh, consistent offering but also with enough variety. Trends for milk-based and espresso-based beverages are also on the rise across Canada and convenience stores need to quickly seize these growing trends and transform them into business opportunities.”

Advances in equipment and servers have allowed more coffee to be brewed at a time, freeing up staff to perform other duties, notes Grimm.

“With a bean to cup, single serve type of equipment to complement the offering outside morning rush hours, you get the perfect combination to offer fresh-brewed quality coffee all day and night,” says Grimm. “Choosing the right service provider to partner with the client is key to ensure the equipment and technology is always up to date.”

Ensuring that coffee is always fresh and hot will help drive repeat business back in the door, notes Grimm.

“If consumers have a bad cup and it’s their first time, you likely won’t see them buy a cup at your store again,” he states.

Coffee Program Success Factors

Gene Grimm, marketing specialist, Van Houtte Coffee Services offers the following key factors for success with your c-store coffee and hot beverage program.

Grimm states that some of the most successful programs Van Houtte Coffee Services has partnered with over the years all had the following in common:

• Dedicated staff responsible/accountable to the program and ensuring freshness and quality at all time;
• A clean and well organized coffee station with professional branding and signage;
• An easily visible, well-lit coffee area within the c-store;
• A consistent brand and blend offering so customers know what they can expect and not be disappointed from one visit to another;
• A variety of roasts, blends, and other hot beverage options (such as teas and hot chocolate) to cast a larger net;
• Fun promotional initiatives or loyalty programs to encourage trials and repeat purchases.
• A store manager who understands what great coffee means, who values the quality of his coffee program, and recognizes its importance for his customers.