C-Stores and the Resurgence of Beverages in a Post-COVID World

ROSEMONT, Ill. — Consumers see coffee and other hot beverages as a necessity.

So said R.J. Hottovy (pictured), head of analytical research at Los Altos, Calif.-based location-analytics company Placer.ai, at the recent CSP Dispensed Beverages Forum in Rosemont, Ill.

Hottovy discussed what has and hasn’t changed with hot-dispensed beverage programs as the pandemic subsides in Adapting to the Changed Consumer: What Coffee’s Post-Pandemic Resurgence Means for C-Stores.

“Urban locations still matter despite work- and school-at-home preferences,” Hottovy added.

However, other aspects have changed, he said.

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Visit times are still below pre-pandemic levels, bolstering the importance of convenience. “It’s not shocking, but people are staying in locations less, which reflects the more convenience offerings people want, more drive-thru, takeout,” he said.

“We didn’t see big spike in short visits until 2021,” he added.

The change to late morning visits (9:00 a.m. to noon) appears to be permanent.

Trade areas expanded for many specialty coffee chains and continue to evolve because of increased drive-thru penetration and gas-price inflation.

Seasonality is an opportunity for cold- and frozen-dispensed beverages.

Drive-thru coffee is here to stay.

“Drive-thru coffees is one of the real breakthroughs of the pandemic,” Hottovy said. “More are getting into the drive-thru game.”

May 2021 saw the beginning of a resurgence in coffee nationwide, Hottovy said, adding it was at that time that data on visits turned positive while overall dining remained negative. “People are seeing coffee visits as an everyday luxury,” he said.

In addition, urban locations still matter, he said, as consumers return to work. Starbucks visits from fourth-quarter 2019 to fourth-quarter 2021 fared better in city vs. suburban locations in five metro areas presented. In the Chicago market, for example, growth was 6.6% in city branches but down 0.4% in suburban locations.