CSP Magazine

Foodservice/Packaged Food: Dispensed Beverages 2015

C-Store Dispensed-Beverage Trends

Product Evaluations conducted an online and telephone-based survey of 150 c-store operators—67 independents with one to 10 stores, and 83 chains with 11 or more units—on behalf of CSP in January 2015. Each of the interviewees in this Annual Trend Report was a purchase decision maker at the store level and offered foodservice items not packaged by a manufacturer.

Eighteen percent of the retailers in the sample have a “limited dedication” to foodservice, meaning they offer four or fewer food items. Nearly half—or 49%—of the operators have a “moderate dedication” to foodservice, meaning they offer three to nine items, while 33% have a high dedication (10 to 15 items).

Below are beverage highlights from the survey, revealing where retailers have established offers—brewed coffee and/or cold dispensed—as well as a few segments with growth potential.

Most Commonly Offered Beverages

Almost all retailers participating in the 2015 CSP Annual Trend Report offered brewed coffee, regardless of the depth of their overall foodservice offer. Among those with “high dedication” (as measured by the number of items they sell), specialty hot teas and milkshakes were more common than those with more limited offers.

The average number of beverage items offered by retailers in the CSP survey: 3.9.

Food itemSampleHigh dedicationModerate dedicationLimited dedication
Brewed coffee96%96%96%96%
Dispensed cold beverages89%90%92%82%
Specialty coffee drinks84%90%88%63%
Dispensed frozen drinks65%66%70%52%
Specialty hot teas29%50%25%4%

Source: CSP-Product Evaluations Annual Trend Report

Top Growth Prospects

Most c-store retailers in the CSP Annual Trend Report expect sales increases for brewed coffee, milkshakes and specialty coffee beverages in the coming year.

Beverage itemPercentage of retailers expecting increase
Brewed coffee39%
Specialty coffee drinks32%
Dispensed cold beverages31%
Dispensed frozen drinks24%
Specialty hot teas22%

Source: CSP-Product Evaluations Annual Trend Report

Percentage of Sales of Hot-Dispensed Beverages by Day of the Week/Month

DayPercent of sales

Source: Management Science Associates

CONTINUED: Dispensed Beverage Menu Trends

C-Store Beverage Menu Trends

Technomic’s MenuMonitor c-store database features menus from 40 retailers in the United States. What follows is a snapshot of their dispensed- and packaged-beverage offerings in 2014 as part of their wider foodservice program.

A quick explanation of terms: “Penetration” measures the “reach” of a product on a menu or of operators offering an item. For example, as shown in the chart below, cappuccino made up 1.4% of all items on the menus at retailers in the MenuMonitor database during second-quarter 2014.

Meanwhile, 19.7% of all c-store hot-beverage items in the database were cappuccinos. And 82.5% of the 40 operators in the sample have cappuccino on their menu.

Hot Beverages at C-Stores

Coffee, cappuccino and hot chocolate were the most common hot dispensed beverages found on the menus of c-store retailers in Technomic’s MenuMonitor sample.

ProductMenu incidenceTotal menu penetrationHot-beverage menu distrbutionOperators offeringOperator penetration
Coffee/filtered coffee471.9%26.4%40100.0%
Hot chocolate/cocoa281.1%15.7%2767.5%
Hot tea140.6%7.9%1435.0%
Other specialty coffee110.4%6.2%922.5%
Specialty tea40.2%2.2%410.0%

Source: Technomic Inc. MenuMonitor, Q2 2014

Cold Beverages at C-Stores

All retailers in Technomic’s MenuMonitor sample offered CSDs and fountain drinks on their foodservice menus, with iced tea and iced coffee the next most common cold beverages.

Product categoryMenu incidenceTotal menu penetrationCold-beverage menu distrbutionOperators offeringOperator penetration
Arnold Palmer10.0%0.7%12.5%
Energy drink150.6%10.8%820.0%
Flavored water30.1%2.2%37.5%
Iced coffee180.7%12.9%1537.5%
Iced tea210.8%15.1%1947.5%
Milk/chocolate milk30.1%2.2%25.0%
Other nonalcohol beverage40.2%2.9%410.0%
Soft drinks/fountain drinks481.9%34.5%40100.0%
Sports drink70.3%5.0%410.0%

Source: Technomic Inc. MenuMonitor, Q2 2014

Customer in Focus

High volume does not necessarily mean high octane when it comes to coffee. Research by Mintel shows that 52% of “high-volume” coffee consumers—those who drink coffee more than once per day—are interested in coffee with 10%, 30% or 60% caffeine levels. Meanwhile, 30% of these coffee consumers wish that ready-to-drink bottled coffee were available with a lower caffeine content.

Customer in Focus

Among all generations, millennials show the lowest rate in ownership of multiserve drip coffee makers, according to 2014 research by Mintel. In fact, 51% of millennials own an old-fashioned coffee pot, compared to 59% of Gen Xers, 70% of baby boomers and 67% of “Swing Generation” Americans. Millennials rank just behind Generation X in ownership of single-cup coffeemakers and are most likely to own a single-serve drip coffee maker.

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