Consumer reasons for choosing convenience-store foodservice and prepared beverages are evolving.
The top reason, up 2 percentage points to 31% from 2023 to 2024 is convenience, but a close second is cravings at 30%, up 1 point from 2023, said Robert Byrne, senior director of consumer research at CSP sister research arm Technomic, Chicago, who spoke last week at CSP’s Convenience Retailing University in Nashville on Dispensed Beverages: A Regional Read.
Cravings are on the rise thanks to younger generations, primarily Gen Z, Byrne said, noting their habits and their cycle of increased dependence on foodservice just to get them through the day.
Many in these younger generations are not particularly inclined to learn how to cook, “but they love to learn how to prepare their own beverages because that’s fun,” Byrne said. “Each generation is increasingly reliant on foodservice, which is a good thing. What it means is that those need states, particularly among the younger cohorts, they’re looking for foodservice to solve for more diverse need states for a more broad type of occasion.”
Placing third in c-store consumer need states is better for you/real, wholesome ingredients, at 17% in 2024, down 2 points from 2023. Fourth is comfort/a simple meal, at 13%, unchanged from 2023, and experience/social connection, at 8%, down 2 points from 2023.
Yearly changes from where c-store customers source beverages are:
- Cold dispensed: 44% in 2024, up 4 points from 2023
- Hot dispensed: 30%, down 1 point from 2023
- Frozen dispensed: 16%, down 1 point from 2023
- Made to order: 11%, down 2 points from 2023
- Name-brand restaurant: 6%, down 1 point from 2023
- Other: Unchanged at 3%
Byrne pointed out the regional differences in hot dispensed occasions:
“In the South and in the West, you have a younger guest,” Byrne said. “Hot dispensed beverage: younger guest. What’s going on? The simple fact is that they do purchase hot-dispensed beverages and are not exclusive to just the iced, nitro and cold-brew formats.”
Byrne added, “I would suggest that a lot of them who are doing this are probably parents of young children as well.”
In research for a presentation a few years ago, Byrne found that hot beverages are a better caffeine delivery mechanism than cold beverages.
“I think parents learned this pretty early on that hot coffee works way better than ice coffee when trying to keep up with kids,” he said, adding that people do age into hot coffee.
“It is absolutely true if you look at millennials 10 years ago and you look at millennials today, the proportion engaged with hot coffee has grown, so it is not necessarily specific to one generation,” he said. “There are life stages that play a role here.”
In hot dispensed, Byrne also noted:
Formats are in play across regions: Traditional drip rules in the Northeast and Midwest, with the South and West more open to expanded coffee types. Meanwhile, younger (primarily Gen Z) consumers in the West and South will leverage roller grill with hot dispensed in the a.m.
Be aware of “better for you-ish”: Healthy offerings continue to evolve as the primary morning need state. Protein-heavy morning options appeal to more than just males.
There’s a made-to-order food opportunity: Premiumization of customized items can boost check while differentiating a foodservice program. Customization also contributes to satisfaction and guest loyalty.
In cold dispensed, Byrne said:
Consider a notable female skew: Flavor variety plus clean, natural/nothing artificial will resonate. Monitor competitive developments: Women are more likely than men to seek innovative/unique drinks.
Have craveable positioning: Lean into unplanned/spontaneous occasions driven by cravings. Cold, sweet and carbonated are consistently most craveable. Promote craveable food items as a combination to further entice the impulse consumer.
Byrne also said that the importance of ice and cups at a convenience store cannot be overlooked. “I have been in so many meetings where people say they don’t know why people don’t like their drinks,” Byrne said, adding: “Your cups leak.”
Another problem: The lack of 30-ounce cups specific to a rewards promotion to get a discount were unavailable, so the customer couldn’t get the discount. “That’s a problem,” Byrne said. “That’s somebody who might not be coming back for a little while.”
Finally, in frozen dispensed:
Vary flavors by region: Significant demographic skews are present. There are traditional, indulgent flavors in the Midwest, while young, affluent buyers in the Northeast and West will seek novelty. Hispanic/Latino parents in the West will seek tropical flavors.
Know that big spenders also are more satisfied: In addition to an above-average spend, overall satisfaction ratings are significantly highest among frozen purchasers. The intent to recommend is also significantly stronger among these customers.
Pair frozen dispensed with handhelds: A higher spend indicates a willingness to build the basket with any foodservice food. Also, frozen dispensed consumers are sourcing food items from across the c-store.
“Regional distinctions and the understanding of those things are going to allow for better targeting of your guests: specific flavor profiles, specific occasion dynamics, things that you can know about,” Byrne said. “They’re going to help you to build a better platform, and you want to begin by determining whether or not you are targeting that existing customer or whether or not you’re looking at trying to capture a new guest into your stores.”
There’s a big push to get folks into a c-store’s app, “and that’s great,” Byrne said, but “that’s a really hard way to reach that untapped guest, that person who isn’t coming in. So, you have to think about your marketing efforts a little bit more broadly. Digital is awesome and that gets your engaged guests a little bit more engaged if you’re doing it right, but what about those people who aren’t your digital guests already? What about those people who aren’t in your loyalty program? They’re in your stores, they’re pre-planning purchases. What’s your opportunity to continue to message, ‘Hey, we got it all, and we got it really good’ to those people? This is very important to think about.”
Byrne added that one size does not fit all.
“We all are very different types of consumers,” he said. “Just think about your brother, your sister, your mom, and think about how you share a lot of demographic characteristics—and you couldn’t be more different when it comes to your approach to food and beverage purchases.
“People want to individualize their experience, they want to go beyond customizing and personalizing, they want to individualize,” he said. “They want it to feel and look like them and authentically be that. It’s hard to kind of be your authentic self and try to appeal to everybody, so some of the brands that do really well don’t bother.”
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