Coffee drinkers have more options than ever before, creating higher expectations for coffee bar programs.
This insight comes from Becca McDonald (pictured left), senior manager, category leadership, at Denver-based Danone North America, who spoke earlier this week at CSP’sConvenience Retailing University in Nashville. She was joined by Janelle LeMay (right), senior director, category leadership.
McDonald rolled out five trends impacting convenience-store coffee, along with data from CSP sister research arm Technomic, Buzz and Mintel:
Increased competition with quick-service restaurants (QSRs): 61% of c-store operators identify QSRs as competitors to their foodservice program. In addition, 40% of American adults bought a coffee from a QSR in the past month versus 33% at a c-store, according to data from November. Also, about five in 10 away-from-home coffee drinkers agree that coffee options in c-stores are limited compared with QSRs.
Rising prices for consumers and operators: 80% of consumers are concerned/very concerned about the impact of rising prices
Blurring daypart consumption: 33% of Gen Z and millennial coffee drinkers state they drink coffee in the afternoon and lunchtime
Shifting coffee expectations: 63% of c-store customers find it important/very important to be able to customize their food and beverage order in c-stores
Younger generations are fueling coffee and beverage growth: 14.7 is the average age Gen Zers have started drinking coffee; millennials started at age 17
“There is a significant jump in consumers drinking coffee earlier,” McDonald said. “It’s not always very coffee forward, it’s a lot more creamer forward—and sweetness—but still, they’re getting into it early, and they primarily enter through cold beverages.”
She added that younger generations want coffee their way. While the 63% overall above say customization is important/very important, that percentage is 69% for those 18 to 34 in age, according to Technomic. Thirty-seven percent of c-store customers would buy self-serve beverages more frequently if their c-store offered a larger variety of condiments and toppings, McDonald said, while 56% of c-store hot dispensed beverage purchasers customize their drink every or nearly every c-store visit.
In addition, technology has transformed the ordering experience and is shifting coffee expectations, McDonald said. For example, citing 2024 data from several sources:
- 37% of those who bought a coffee from a foodservice venue used an app to place the order in the past week, up 13 points from 2020
- Drive-thru coffee purchases increased 6 percentage points versus 2020
- 54% of coffee drinkers ordered through a drive-thru in the past week
- Delivery purchases for coffee increased 30% versus a year earlier
C-stores can win in this environment, however, McDonald said:
First, get the fundamentals right and overcommunicate this to consumers:
- Have a convenient location and fast ordering. Showcase an optimized flow with speedy payment options
- Have high-quality coffee, and communicate this message with signage/advertising
- Have affordable prices; stand out with compelling pricing and promotion tactics
Second, bring the coffee shop and QSR experience to the c-store with beverage customization and a variety of formats:
- Use limited-time offers to drive value and excitement to coffee beyond price
- Capture younger audiences with broader specialty coffee offerings and value-added additives (plant-based milks, flavor-forward toppings)
McDonald also shared the following chart on creating an optimal coffee bar flow:
Other highlights from McDonald:
Use signage to communicate “craveable” coffee to consumers. “Smooth,” “fresh” and “rich” are the most impactful coffee claims, she said, followed by “roasted flavor/aroma,” “medium roast” and “sweet flavor/aroma (e.g., vanilla, brown sugar, caramelized).
Drive volume at c-stores by offering coffee loyalty programs that include bonuses and promotions with food pairings. She added that 64% of QSR and c-store past-week coffee drinkers are more likely to visit a c-store that has a coffee bundle deal, according to a Danone study. Also, 42% of away-from-home coffee drinkers consume their coffee with a meal or snack.
Offer customization and variety, which are critical, she said. Convenience and price are not enough to retain loyalty and satisfaction.
Lean into customization to allow coffee drinkers to be their own barista on the go at a value to marketplace competition. Only 11% drink their hot coffee black, and only 13% drink their cold coffee black, according to a Danone study. Also, 8% of hot coffee drinkers and 25% of cold coffee drinkers use a flavored syrup.
Offer plant-based coffee additives, which are increasingly popular across all age ranges and regions nationally.
Include LTOs, which deliver value beyond price and are an effective way to draw shoppers, particularly younger consumers, into c-stores. Half of c-store operators use LTOs, according to Technomic.
Know that espressos, lattes, cappuccinos, cold brews and frozen blended coffees are trending with younger coffee drinkers.
Consider offering premium/specialty segments of coffee, which are driving growth for QSRs. C-stores can look to QSRs for menu offering enhancement.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.