As craft and specialty coffee continue to take off around the country, cold coffee beverages are finding their place in convenience stores. This emerging arena offers growing opportunities for boosting sales and profits in the dispensed-beverage category.
The popularity of cold-brew coffee, in particular, has exploded in recent years, according to research firm Mintel. Retail sales of cold brew saw a whopping 115% growth from 2014 to 2015, reaching $7.9 million in sales. This growth has been steady since 2010, increasing 339% through last year.
Still, cold brew remains just a small part of the overall cold-coffee trend, with other options such as iced coffee and even frozen formats continuing to gain traction. For c-stores, this is an opportunity that shouldn’t be ignored.
In fact, c-stores already are recognizing the power of coffee profits; second only to foodservice at 23%, 16% of c-stores say they plan to add or make improvements to their coffee program this year to improve profit potential. With the right equipment and techniques, c-stores can add or improve the quality of their iced and cold coffee offerings to tap into even more hot profits.
Shifting Consumer Trends
While it might be difficult to pinpoint the exact reasons for cold coffee’s most recent success, researchers point to younger generations as the driver for this trend.
Although 24% of consumers overall currently drink retail-purchased cold-brew coffee, older millennials, ages 29-38, stand out as the largest consumer group of this product. Mintel research indicates that these consumers are almost certainly interested in cold-brew coffee, because 37% of these consumers enjoy trying new styles of coffee preparation.
In other cases, it seems millennials and even younger Gen Z consumers are replacing sugary sodas and energy drinks with cold-coffee beverages because of a perceived health halo. Others might have been drawn to coffee in general first through cold products vs. hot beverages, which are most often preferred by older consumers.
Even though cold-brew coffee continues to enjoy its moment in the spotlight, iced coffee offers another cold-coffee alternative, and one that tends to be more easily handled by c-stores. The trick to offering better iced coffee than perhaps in years past is selecting the right equipment for the right technique.
“While cold brew represents a small portion of the overall category, our research indicates curiosity about trying a new style of coffee is driving current consumer demand,” Elizabeth Sisel, beverages analyst at Mintel, has said. “However, this may foretell future challenges for the beverage; when a newer coffee brewing method begins to trend, it may easily overshadow cold brew’s current popularity.”
Types of Cold Coffee
Cold-brew coffee uses a steeping method vs. hot water extraction, which can produce a slightly sweeter taste. Filtered, cold or room temperature water is blended with freshly ground coffee beans and steeped for 12 to 24 hours, then filtered out. The resulting concentrate can be diluted with additional filtered water and/or served over ice. Equipment needs are minimal; only a bucket and a filter are required, though some commercial versions offer larger sized, stainless-steel containers
When it comes to iced coffee, there are various ways to brew the beverage. In the flash-chilled version, coffee is brewed in a more traditional format using hot water and then flash-chilled using special equipment.
In the Japanese method for brewing iced coffee, ice is placed in the serving pot and the brewer is adjusted to prepare the coffee as normal, but with less hot water dispensed. The ice in the pot offsets the lesser brew volume water. When it melts, it replaces the missing brewed water thereby preventing an over-extraction of the coffee.
C-stores with combo-brewers already have the capability to offer Japanese-style iced coffee; these brewers use a recipe that concentrates the coffee by reducing/eliminating bypass water during the brewing process. The resultant brew can be chilled in a cooler, and then dispensed over ice.
Keg dispensing is a newer way to serve cold coffee beverages, but few c-stores have yet to get in this game. This type of brewing requires the user to use the cold-brew method, then transfer the beverage to a chilled keg that is then refrigerated. A nitrogen-propelled draft system is used to dispense the coffee that gives it a rich, beer-like effervescence and creamy head. This is typically served alone or occasionally over ice.
Operators who can capitalize on creative ways to meet these growing trends have great potential to drive new sales and expand their customer base. By incorporating new tools and innovative techniques, c-stores are in a better position than ever to reap more hot profits from their cold-coffee offerings.
This post is sponsored by Curtis Coffee and Specialty Beverage Equipment