ROSEMONT, Ill. --From economic malaise to coffee-bar customization, the trends surrounding the hot-beverage category continue to reshape the competitive landscape for convenience store retailers, according to opening session speakers at a recent CSP roundtable event.
Addressing about 100 attendees at CSP’s Hot Dispensed Beverages Meeting, opening-session speakers spoke about how cross-channel trends and customers’ financial concerns may impact the way convenience retailers go to market in the coffee and hot- and cold-dispensed-beverage categories.
In terms of the economy, David Henkes, vice president of Technomic Inc., Chicago, did not paint a rosy picture. He said Technomic’s survey numbers from January 2014 show consumers are not spending more, and “when they do spend, they’re careful to search for value and indulge only when it makes sense.”
Political gridlock, Obamacare and an uncertain job market creates distress, he said. “When you talk to consumers, there’s still not that optimism to accelerate a business case [for new initiatives].”
On an individual level, primary concerns include household financials, grocery prices, health care and gas prices, Henkes said.
But for c-stores, a number of trends bode well, especially with regards to hot-dispensed beverages. Henkes named several including:
- Hot beverages are big business.
- Beverages drive traffic.
- Hot beverages provide incremental sales and profit growth.
- Higher-end hot beverages help c-stores compete with other channels.
- The morning day-part is critical, but others are emerging.
- Hot-beverage customization is appealing.
- “Branded” coffees are growing, including c-stores’ own proprietary brands.
- Consumers want flavor.
- Seasonality impacts hot-beverage sales.
- Sustainability resonates.
Kevin Higar, an author and foodservice consultant, agreed with many of Henkes’ points. The ability to customize a coffee purchase with mixes, toppings and any number of additional condiments is on trend. As an example, he gave a retail store that specialized in hot chocolate, with customers able to develop any number of options, include a s’mores drink.
In addition, customers appreciate offers they can relate to, Higar said, speaking to an idea he called the “satisfaction gene.” He noted a food-truck operation that took photos of customers’ dogs and created a dish around that dog’s personality. While elements like appealing flavor profiles are important, so is knowing the customer and making him or her feel “like you’re they’re best friend.”
The conference was held in Rosemont, Ill., March 11-13, and covered topics from travel-cup ideas to brewing equipment.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.