Coffee. It’s not just a morning beverage anymore.
That’s one of the key opportunities for convenience stores presented by representatives from Costa Coffee Tuesday at CSP’s Outlook Leadership Conference in Rancho Palos Verdes, California.
In fact, a quarter of all coffee sales are now come in the evening or late at night, according to Tim Warner, general manager of Costa US B2B, Atlanta.
“That’s an entirely new opportunity,” Warner said.“Again, these sales aren’t also gallons of coffee, hot and wet. These are now small, 12-ounce drinks, espresso-based specialty varieties, which is great for us.”
That means convenience stores can charge more per cup, while also potentially boosting basket size by suggesting a pastry, breakfast sandwich or other item as a bundled offering.
“The rising demand for evening coffee signals that there is untapped potential,” he said. “There’s much more headroom available for us outside of that morning rush into multiple dayparts.”
There’s also an opportunity for convenience stores in personalization and customization when it comes to coffee.
“This is really a non-negotiable measure going forward,” said Joe Gaines, Costa’s senior director of sales for convenience retail.
Digital loyalty programs can help expedite this.
“Can you use past purchases to recommend the favorite coffee or a seasonal favorite that could come up?,” Gaines said. “Could you also use that to say, Have you tried our new breakfast sandwich? and pair it with a past purchase they made.”
C-store retailers who focus on operational excellence in their coffee programs will win the game, the two said.
Two-thirds of consumers say they won’t return to a retailer or restaurant if the coffee is disappointing even once, they noted, citing the National Coffee Association.
“Now that means the onus is on you guys to get it right the first time,” Warner said. “Consistency means knowing that your coffee is delicious every single pour.”
During the pandemic, we saw an increased consumer desire for “coziness,” the two noted. People bought fluffy blankets and candles, since they were spending so much time at home.
So, where does coffee come in?
“Coffee taps into what Costa’s research defines as the emotional currency,” Warner said. “And its not just coffee that delivers that feeling. Consider this: In (convenience retail), hot chocolate sales are 50% higher than they are in any other channel. Consumers are looking for that coziness.”
Marketing that strays from simply communicating value but, rather, evokes a feeling, will win with consumers here, they said. Position coffee as a little luxury.
“The definition of convenience is changing,” Warner said. “It’s no longer just about speed. Today’s consumers want immediacy, yes, but also emotional value combined with premium quality. These shifts aren’t just challenges, they’re huge opportunities, opportunities for coffee, in particular, to take a starring role in the convenience channel.”
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