If convenience-store retailers want to update their coffee program, they should make sure that they’re working with their customers and understanding what they’re looking for—and bringing in the right products.
This advice comes from Steve Kapple (pictured left), senior category manager, dispensed beverages, at Ankeny, Iowa-based Casey’s General Stores, who was one of three retailers in a session on transforming convenience coffee at the National Association of Convenience Stores (NACS) show in Chicago on Oct. 16. “And then if you’re bringing a whole new program in, you got to really analyze that part of it and make sure that you are going after your target demographic, and you’re not putting something out there that is not going to drive that person” into the store.
A few years ago, Casey’s saw it was not getting the results it expected from its traditional coffee platform, Kapple said.
“So, we spoke to our guests, and they told us that we were not hitting their expectations,” he said. “While we had several options for them to choose from, they basically came back and told us that we had a very narrow profile of roast and blends and flavor profiles.”
Because of this, Casey’s started the process of transforming its coffee in November 2023, “and that first step was identifying a supplier partner that brought a strategic approach to optimizing our assortment,” Kapple said.
“Working with them and utilizing data and analytics, we identified the flavor profiles that were going to maximize our incremental reach with our guest,” he said. “So, we used guest validation and we landed on eight different blends that really gave us that broader spectrum of roast, caffeine and flavor profiles that they were looking for.”
In January, “We launched Casey's Darn Good Coffee with increased marketing and to really drive our guests back to our coffee bar,” Kapple said. “And this time, we did that extra work to involve the guests up front, and we built a program that they accepted right away. We’re seeing really good results with this program, and our coffee is now meeting that high standards that we expect to have with Casey’s, as well as what our guests expect.”
Kwik Trip
Micah Rupprecht (pictured center), director of category management, foodservice, at La Crosse, Wisconsin-based Kwik Trip, talked about the main challenge Kwik Trip faces today: leakage in the segment.
“We need to maintain or grow our hot beverage cups when there’s corner-store coffees and national-brand coffees kind of popping up everywhere,” he said. “So, when you consider how large all our territories are, there’s competition literally every day opening up on the street.”
He added that these competitors are able to operate in a small footprint with smaller overhead.
“They’re able to offer a lot of competitive drinks and marketing inside of that footprint,” Rupprecht said. “So, we’re trying to keep as many cups as we can inside of our store.”
He said Kwik Trip also is faced with “the challenge of we’ve put a lot of our time into building a customer based on a good value, so we’re offering what we think is a great product at a great value.”
However, he said he sees a trend in dispensed beverages in general where these are “turning into kind of accessory purchase. The customer is interested in trying the new, different coffee shop in town.”
“We know we offer similar products,” Rupprecht said. “We know we offer a better value, but we’re still losing some of that cup purchase to a different location, and so we’re trying to maintain the loyalty of that guest who knows us for value but also be recognized as the retailer who can do the premium offerings as well.”
Kapple added that there’s also leakage into different categories.
“You see people gravitating toward energy or other items to get in that morning boost or whatever they’re looking for,” he said.
OXXO
Ximena Reynoard (pictured right), director of foodservice, OXXO Mexico, said the main challenge for OXXO, owned by Monterrey, Mexico-based Fomento Economico Mexicano S.A.B. de C.V. (FEMSA), is “that we have so many local coffee shops right now, and so many regional coffee shops.”
“If you see the price point, they’re closer to what we can offer,” she said. “They have very good quality like us, and that’s why we need to be aware of them all the time.”
She added that OXXO, which recently marked its one-year anniversary in the United States, must continue to tell customers the differences that OXXO, as an entire convenience store, can bring to them that coffee shops cannot.
Another challenge is space, she said.
“In Mexico, we have very small stores, not like in the U.S., so we need to be very, very creative of how we can use vertical spaces in order to have the complete solution.”
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