Believe it or not, 54% of consumers are visiting coffee shops at least once a week, according to Technomic’s 2016 Bakery & Coffee Café report. And when they visit, they’re often looking for gourmet coffee options rather than the old school drip coffee. In fact, the demand for gourmet, cutting edge coffee drinks has increased across all channels— including convenience stores. Technomic’s 2016 Beverage report stated that 89% of consumers say that beverage quality plays a critical role in their decision to patronize a convenience store.
Knowing this, c-stores have been working hard to upgrade and update their coffee offerings—including cold brew and even nitro coffee, offering premium bottled coffee drinks and more.
And consumer interest in purchasing coffee at c-stores is going strong, with 42% reporting having purchased coffee in a c-store, according to a 2016 report from market research firm Mintel. In fact, the CEO of Dunkin’ Donuts, Nigel Travis, has called out c-stores as the primary reason for the restaurant chain’s struggle with afternoon traffic, pointing to c-stores’ shift from cigarette, e-cigarette and fuel programs to higher-margin food and coffee programs as the culprit.
That being said, c-store bakery snack sales grew 3.2% year-over-year in 2016, according to IRI. With that growth in mind, retailers should consider offering high-quality baked goods to complement their upgraded coffee drinks. Believe it or not, pastries, donuts and muffins represent more than 1.5 billion dollars in c-store sales, IRI reports. Grow your bakery and coffee categories with these strategies learned from bakery and coffee cafes.
Offer a variety
The types of baked goods patrons seek out at these cafes most frequently include pastries, bagels, muffins and doughnuts, so offering an enhanced variety of these options at c-stores could be key to drive traffic.
Muffin choices should include popular standbys such as blueberry, chocolate chip and banana nut, and bagel offerings can include plain/egg, cinnamon swirl, blueberry, everything and onion—and of course, be sure to offer cream cheese options as well. For items such as snack cakes, the top flavors are chocolate, carrot, cream, vanilla and strawberry, according to Technomic’s MenuMonitor.
C-stores should also consider adding seasonal flavor options around the holidays. Technomic’s 2016 Bakery & Coffee Café report finds that within bakery and coffee cafes, 42% of consumers say that seasonal menu items encourage them to make a purchase. Retailers should use that information for their own product mix, as offering timely LTOs can help boost sales. It’s interesting to note that Starbucks’ seasonal Pumpkin Spice Latte has been a runaway hit for years, and Dunkin’ Donuts offers Halloween- and Christmas-themed donuts every year to entice customers.
Expand Options beyond the Bakery Case
While the bakery case is the hotspot for pastries in bakery/coffee cafes and c-stores, c-store retailers should also consider offering their customers a wider variety of wrapped pastries that are more portable, as more than half of customers agree that when it comes to c-store food, portability is key, according to Technomic’s 2016 Snacking Occasion report. Although immediate consumption outpaces those “save it for later” occasions, 60% of consumers say they are purchasing packaged goods, including 48% of consumers who say they choose packaged baked goods, according to Technomic’s 2017 Foodservice Handbook.
And unlike bakery-cafés, c-stores have the ability to offer wrapped pastries not only adjacent to the coffee bar, but also at key interruption points around the store, enticing customers to grab a sweet treat as they shop. This comes in handy particularly in the afternoon when customers are more likely to succumb to their sweet tooth, as studies show consumers are more willing, and more successful, at rationalizing a treat later in the day.
Offering a variety of wrapped pastries at all hours of the day can increase basket size to give c-stores an edge over bakery-café competitors.
Bundle items to boost interest
Another way to boost basket size is through bundling products at value pricing. In fact, 49% of consumers—including 62% of millennials—say that they’re likely or extremely likely to visit a foodservice location for a combo meal. This is likely because millennials are swayed by the convenience and lower cost of a combo meal versus paying for each item separately.
Bundling can also encourage purchases of snacks during beverage-only orders if they’re offered at a lower price—52% of consumers visiting a coffee or bakery café say that during visits they were planning only to buy a beverage, lower snack prices could drive them to purchase a snack in addition. In c-stores, this concept can be applied to almost any pair of complementary products.
And what couples better than a fresh coffee and delicious pastry? To boost sales at c-stores, operators should consider offering combination deals round-the-clock that include a baked good and a coffee drink. This appeals to consumers who are looking for a good value—and when choosing where to dine, 79% of consumers say that value is important or extremely important, according to Technomic’s 2017 Value & Pricing report.
A great example of effective bundling is a promotion Starbuck’s ran earlier this year that offered customers a breakfast sandwich (bacon, egg and gouda or sausage, egg and cheddar) and a Grande hot coffee for just $5—appealing to those value-conscious consumers. C-store retailers should consider offering similar deals to entice their customers to buy more.
All in all, c-store retailers should consider looking to coffee and bakery cafes for inspiration when it comes to product assortment and promotions, as more recently some of the lines have started to blur between channels. Follow these tips to elevate the complementary coffee and bakery programs in your c-store.
This post is sponsored by Prairie City Bakery