Move over hot coffee, there’s a new java category in town, and it’s heating up the coffee market in convenience stores, despite being chilled.
Trends continue to shift toward iced coffee, cold brew and other specialty coffee drinks. And c-stores are taking notice—a 57% year-over-year increase in the number of iced-coffee items on c-store menus has been the result, according to Technomic’s MenuMonitor.
“Younger consumers are looking for the next big thing,” says Christopher Scott, corporate director, fresh & foodservice at Core-Mark International. “In the convenience channel, hot coffee is no longer enough, and at Core-Mark, we’re dedicated to being ‘trend-forward’ for our customers, which means offering new, popular, sought-after options like cold-brew.
In addition to cold-brew, more consumers are looking for specialty, upgraded coffee experiences, and retailers are stepping it up. At Maverik, for instance coffees offered include specialty blends from Brazil, Colombia and India—consumers can choose between six hand-picked, premium coffees. The store also sells specialty cappuccinos in flavors like pumpkin spice and bananas foster.
And at Rutters, a York, Pa.-based chain, consumers can choose from six different coffee blends with more than 35 flavor combinations, with various milks, creamers, sugars and syrups. The brand is also pushing for sustainability—all proceeds from its Bogota Sunrise blend go toward improving rural farms and communities.
Cold brew is coffee that is steeped in cold water over a period of time—typically 12 to 24 hours. The result is a coffee with lower acidity than traditional hot-batch brewing that offers a smooth and refreshing taste. And for an even richer experience, cold-brew coffee lovers are turning to nitrogen-infused cold coffee.
“Cold brew coffee offers consumers a smoother, slightly sweeter coffee taste with a lower acidity than traditionally brewed coffee, making it popular among millennials and Gen Xers,” says Janie Page, director of marketing for Farmer Brothers, a coffee foodservice company based in Northlake, Texas. “The explosive growth and popularity of cold brew make it ideal for innovative solutions like new flavors, brewing methods and dispensing solutions. We are also seeing consumers choosing cold brew as a more natural replacement for soda and energy drinks.”
Investing in this new coffee type makes good business sense. Iced coffee represents about 4% of coffee sales for those c-stores offering that option, and cold brew represents 3% of coffee sales for c-stores offering that option, according to Technomic’s 2017 Away From Home Beverage Study.
Given the popularity of cold brew, the price point of the drink also is enticing. The average menu price for cold brew is 12% more than traditional iced coffees and 40% more than hot coffee, MenuMonitor data reveals. This translates into a 16-ounce cup of cold brew retailing for $2.49, compared to $2.19 for a same-size cup of iced coffee and $1.49 for hot coffee. Nitro cold brew, on the other hand, can retail for a whopping $3 for 16 ounces.
If retailers are interested in offering new products, they have a lot to look forward to in coming years.
“We are positioned to provide our retailers with exciting new innovations within the categories of cold-brew and iced coffees,” Scott says. “This is a natural extension of ready-to-drink products, which blurs the line between coffee, soda and energy drinks. We will continue to provide innovation within this category as well as others to help our customers/retailers be on or ahead of the trend.”
This post is sponsored by Core-Mark