CSP Magazine

Made to Order

QuickChek, Rutter's lead pack of c-stores pondering in-store coffee baristas.

If coffee lovers will stand in line at aStarbucks to pay $4 or more for a customized cup of java, espresso or blended drink—a trend that surprised even the most forward-thinking marketers—will they warm up to a c-store offering that replicates the coffee shop experience, minus Starbucks’ ambiance?

That’s the hope of several large chains in the midst of expanding their self-serve coffee bars to include a fullservice barista who can brew and blend made-to-order hot and cold beverages.

The timing is supreme for the convenience industry to make its move, considering the popularity of specialty drinks. The explosive growth of coffee shops over the past decade has spurred the convenience channel to transform the thermal pot into its breakfast portal as more coffeehouses continue to open nationwide. The Specialty Coffee Association of America reports about 10,000 coffee cafes and 2,500 specialty stores operating in the United States, with chains such as Starbucks representing 30% of all coffee retail stores.

Piggybacking on this wave, the nation’s nearly 150,000 c-stores are making a sizable contribution to total U.S. coffee sales, netting $2.85 billion for 2012, placing the industry third in total coffee volume behind coffee shops and burger restaurants, according to a report by Study Logic, a Long Island, N.Y.-based foodservice research firm that shared this data exclusively with CSP.

And within the c-store channel, a small group is aiming to replicate the success of these specialty brew crews by launching onsite full-service barista bars, aiming to turn a profitable category into a c-store destination.

Wawa claims to be the first c-store to have tried the barista concept two decades ago. The attempt wasn’t successful at the time, likely because consumers just weren’t ready for a customized coffee option—at least not from a convenience store. But Wawa is giving it another go as it rolls out a major expansion in Florida, a new market for the Pennsylvania-based chain.

This year, Wawa will introduce full-service barista bars in each new store it opens in the Sunshine State: 25 locations by the end of 2013 and 100 in the next five years. While a company representative was not available for comment on the new program, the bold move indicates renewed confidence that the chain sees baristas as part of a new, more customer-centric experience. Altoona, Pa.-based Sheetz has gotten into the barista act, including the coffee preparers in many of its new North Carolina sites. Coffee advisor Andrew Hetzel, founder of Cafe makers LLC, likens a c-store barista program to having a chef onsite to prepare fresh food. “Providing a barista allows the potential to provide a freshly prepared, expanded menu of beverage offerings that are valuable to discerning clientele,” he says. “

Coffee can and should be a profit center at any retail location, not a loss leader or cost of doing business.”

While prosperity potential is great, upfront costs and quality consistency should be considered, Hetzel cautions. For smaller chains and independents that lack multiple tiers of command, the investment can be more difficult to manage.

Retailers who want to add barista bars to their stores need to consider many factors before diving in, according to those who are in the middle of such an undertaking. It’s a commitment with risks, including the initial investment, finding space, training employees and dedicating personnel, not to mention moving beyond a basic cup o’ joe and making specialty drinks such as an espresso or blended smoothie.

“It’s important to remember that coffee is a perishable food product, not a powdered ‘just add water’ beverage,” Hetzel says.“The challenges of operating a barista bar are similar to those one might encounter with a restaurant, and you are essentially running a coffee shop in your convenience store.” Top issues of concern are the fresh food ingredients that will be offered (suppliers, logistics and water quality), menu details (understanding your product and customer) and logistics of preparation and serving (training employees to execute with speed, consistency and customer service).

“Specific equipment to purchase and the layout of a coffee bar are usually the areas given the most attention by those new to specialty coffee offerings,” he says, “but these issues are simple by comparison.”

Executives with Rutter’s Farm Stores and QuickChek have barista build-outs fresh on their minds: Both chains are in the middle of transforming existing self-serve coffee sections into made-to-order beverage bars in their stores. So before deciding to offer full-service barista options, take the advice of retail leaders who are clearing the path for others.

Tight Squeeze

For starters, Hetzel says expenses can range from tens of thousands of dollars to $350,000 or more per store for initial build out.“Upfront costs can vary substantially depending on the complexity of the program, quality goals of the operator another location-specific issues,” he says, cautioning that monthly maintenance and upkeep must also be factored in.

While neither chain would release estimated cost figures per store to implement the programs, Jerry Weiner, vice president of foodservice for York, Pa.-based Rutter’s Farm Stores, and Mandy Steindl-Kwiecien, category manager for Whitehouse Station, N.J.-based QuickChek, don’t downplay the monetary investment required to introduce baristas.

Businesses, says Steindl-Kwiecien, must consider the cost to build, including working out the plans; obtaining permits and moving through the permit process; the purchase of construction materials and labor costs; upgraded or new machines and blenders; refrigeration capability; and storage space.

“Then you have the costs of marketing, which for us included photo shoots, art, signage, menu panels and incorporating the new menu into our touch screen system,” she says.

Other costs to consider: the type of machines, hours of operation, range of product offerings and adjacencies with other in-store categories.

At press time, Rutter’s was in the final phase of rolling out a chain wide barista program in 33 of its 57 stores, all located in Pennsylvania. The chain tested the barista bar in two stores last September, swiftly expanding the program to nine more stores by October. By February, Rutter’s decided to move forward with the barista bar concept in the remaining stores selected for the program based on availability of space. The expanded drink menu includes espresso drinks, frappes, lattes and fruit smoothies.

“Not all of our stores could accommodate the 9-foot space required for the new espresso machines and blenders,” says Jerry Weiner, vice president of foodservice for Rutter’s. “I have to admit it took some creativity to make room in the stores that did get the bars. Luckily, we didn’t have to eliminate any items, but some items were relocated within the stores.”

QuickChek is testing its new HandCrafted Drinks barista program in two New Jersey locations, each selected for different demographics. One is more of a commuter store on the highway, and the other a neighborhood store with more foot traffic. “We see a strong need for a barista program based on our observations of the competitive market, what our consumers say they want, and beverage trends in the coffee category,” Steindl-Kwiecien says. “We knew we wanted to be in the business, so the test was to assess how we were going to get there and move forward.”

While none of the challenges Quick-Chek encountered along the way have taken the company by surprise, finding the space in stores clearly requires thought and creativity. In the two test sites, space was created by rearranging the bakery sections rather than eliminating items. Many of QuickChek remaining 132 stores, however, lack the physical space to accommodate the kiosk (even as an addition to the existing coffee sections), leading the team to explore alternative layout options.

Baristas in Training

Hetzel says adequate staffing and training is a critical issue at the onset of a new barista program and throughout the lifetime of the operation of any coffee shop. He cautions retailers to recognize that when adding an espresso beverage program to any convenience store, they are essentially starting a coffee shop within another business.

“Menu complexity and quality goals determine the skill and performance level of staff. Is your barista a push-button fast-food machine operator or a knowledgeable and skilled preparer of espresso beverages?” Hetzel says. “Each business operator must decide on a mix of investment in people, machinery and operating system to reach company goals.”

He says the term “barista” is loosely defined, sort of like the word “cook,” which can used to describe someone flipping burgers at the local diner or the sous chef at a five-star restaurant.

“One can learn to mimic the motions of preparing coffee in a few minutes or hours, but ask any regional or national barista champion how much time goes into training for their craft and I suspect he or she will have worked as a barista for years, plus several hours of practice each day for weeks leading up to competition,” Hetzel says.

For the convenience environment, he suggests a training program that sufficiently reaches the learning goals appropriate for the job function: “In some circumstances, a four-hour course and some job aides are exactly what are needed to do the trick.”

Both Rutter’s and QuickChek allow consumers to place their customized beverage order via a touch-screen ordering system at the barista bar. Using this kind of system alleviates some of the labor time required to take orders verbally from customers. Although the baristas provide 24/7 access to customers, stores need only a full-time designated barista during the busiest times of day. For QuickChek, those peak times are a.m. rush and an afternoon spike in snack purchases, which include cold blended drinks.

The key to efficient staffing for both chains is the common practice of crosstraining employees so they can rotate the role of barista as needed. Rutter’s relied on its ingredient and equipment suppliers to train store employees on how to serve as barista. The chain paid for two initial sessions to educate the store employees at the test sites, then those Rutter’s employees trained other employees, then stores trained other stores, and so on. Weiner says this system was a cost-effective way to bring employees up to speed on machines, various drink ingredients and customerexpectations. QuickChek took a different approach, according to Steindl-Kwiecien. And she would know: She was the primary trainer for the chain’s two test sites, setting up initial instructional visits followed by weekly and then monthly visits to review operations to assist with any gaps in knowledge. How did this category manager qualify for QuickChek barista trainer? Her knowledge was acquired by working with equipment and ingredient suppliers.

“We figured it was important we understand how to use the machines and make the drinks if we were going to provide consumers with the products they want,” she says, “so naturally I picked up everything needed to know along the way and have been able to pass it on to our employees.”

Foodservice Mentality

Stores that have a solid foodservice program in place likely will find the transition to an in-store barista service smoother than those that don’t, says Weiner. “Rutter’s has an extensive food offering available with kiosk ordering screens, as well a shot and cold grab-and-go items,” he says.“Our kiosk items are already made fresh to order, so adding a beverage made-to-order service wasn’t foreign to us.”

Because both Rutter’s and QuickChek already had touch-screen systems in place for their foodservice offerings, they were able to adjust their existing systems to include the new, expanded beverage menus. Although it requires some technological expertise, it’s one less hurdle to jump.

Steindl-Kwiecien agrees that starting a barista program is easier if a store understands how foodservice operates:“Whether you are offering food made to order or drinks made to order, your team already has the skills needed, and they easily translate across the categories.

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