July 2014 - These days you can get a decent cup of coffee just about anywhere. Since the rise of Starbucks created a nation of coffee snobs, many convenience stores and quick-service restaurants — once known for watery, flavorless brews — have kicked up their coffee game with higher quality beans, more sophisticated brewing techniques, improved branding, updated equipment and better atmosphere.
Indeed, competition for consumers’ hot dispensed beverage dollars is at an all-time high. How can the industry make up for that lost ground? Click Here for the complete article.
Macs Canada and Circle-K US have launched a line of 26-ounce refillable 'EasyGo Drinkware' Mason Jar 'Froster' mugs with spiral fun straw! They are available at participating Macs and Circle-K convenience stores while supplies last.Dallas (May 12, 2014) – It was only a matter of time. They’re seemingly everywhere – on party supplies, clothing, jewelry, candy, decals, at ‘stache bashes, in party photo booths, even on cars and baby pacifiers. Now, mustaches are on Slurpee® drink straws too, the perfect accompaniment to this summer’s new, novelty Slurpee cup – a 26-ounce refillable, plastic Mason jar mug. Both on-trend Slurpee accessories, sold separately, are made for summer fun.. Click Here for the complete article.
May 2014 - ROSEMONT, Ill. -- Coffee can be strong both in taste and in its power to drive traffic and profits at convenience stores, as retailers attending a recent CSP roundtable meeting found out.
About 100 attendees at CSP’s three-day Hot Dispensed Beverage Meeting reviewed statistics covering the importance of coffee to the hot-dispensed category, as well as the important role coffee drinker's play with market basket size. Statistics from the Chicago-based Technomic Inc. also indicate that c-store retailers make less on what they sell, but realize greater margins than with other foodservice categories. Click Here for the complete article.
Apr 2014 - CONCORD, N.C. -- Forty-seven percent of millennia's drink more regular hot brewed coffee today than they did when they first started drinking coffee (versus 37% who say they are drinking more coffee drinks today), suggesting that young coffee drinkers have tended to "mature" over time, gravitating from sweeter drinks to brewed coffee as they age, according to coffee roaster S&D Coffee & Tea's new white paper, "Appealing to Young Coffee Drinkers Along Their Maturity Path." and 87% of the sample started drinking coffee (of any kind) by age 21. Click Here for the complete article.
Mar 2014 - JERSEY CITY, N.J. -- The rise of Millennials is good news for convenience store retailers because this generation likes to shop at c-stores -- and not just for the traditional categories. Millennials (those born after 1980) frequent c-stores more often than other consumers. Almost three-quarters of Millennials shop at a convenience store at least once a week, compared to 68 percent of total respondents. Click Here for the complete article.
Jan 2014 - “While the 2013 color of the year, PANTONE Emerald, served as a symbol of growth, renewal and prosperity, Radiant Orchid reaches across the color wheel to intrigue the eye and spark the imagination,” said Leatrice Eiseman, executive director of the Pantone Color Institute®. “An invitation to innovation, Radiant Orchid encourages expanded creativity and originality, which is increasingly valued in today’s society.” Click Here for the complete article.
Jan 2014 - For most coffee drinkers, the first beverage consumed in the morning is a cup of coffee. In fact 68% of them drink one cup within the first hour of waking up. This should tell you that coffee is still a growing consumed beverage in the U.S., and with 54% of the U.S. population over the age of 18 consuming coffee everyday, sales can only continue to climb. Click Here for the complete article.
Dec 2013 - JERSEY CITY, N.J. -- An old adage updated to the 21st century might suggest that "an app a day makes the customer stay." While seeing a new app a day in this industry is unlikely, it seems that each month another convenience store chain rolls out a mobile app with the intentions of engaging customers and building loyalty. Click Here for the complete article.
Nov 2013 - Convenience store operators who are cashing in on frozen dispensed sales are combining new and exciting flavors with popular promotions, good equipment maintenance and a strong foodservice offering. Frozen beverages are widely regarded as a high-growth category, and convenience store operators looking for more of a good thing are complementing their traditional sets with frozen dairy beverage programs. Click Here for the complete article.
Oct 2013 - Consumer demand is surging as operators continue appealing to new audiences with new flavors and product innovations. Everyone agrees that frozen beverage sales are strong and the outlook for the category remains extremely positive for the next few years. But the convenience store operators who are cashing in the most—and not only during the warm weather months—are the ones who combine new and exciting flavors with popular promotions, good equipment maintenance, a strong foodservice offering and a savvy understanding of social media. Click Here for the complete article.
Sept 2013 - With sales and profits slipping, c-stores should look for ways to improve the performance of their hot beverage programs. There’s a reason convenience store operators call coffee “black gold.” With profit margins at 60%, hot dispensed beverages is one of the most profitable categories inside of convenience stores — second only to ice. But selling them isn’t as easy as it used to be. Click Here for the complete article.
Aug 2013 - A seismic shift is taking place and every retailer is feeling the ground move. The venerable Baby Boomer generation is no longer center-stage for marketers. Although walking away from the Boomer cohort would be a mistake for marketers — they still control the majority of wealth and discretionary spending, after all — the up-and-coming Millennial generation can't be ignored either.
For convenience store operators, there are some significant differences between the two generations, and those should be reflected in go-to-market strategies and product selection. Click Here for the complete article.
July 2013 - On paper, cold dispensed beverages might not seem like a huge win for convenience stores. They account for just over 12% of sales in the foodservice category and less than 2.5% of overall in-store sales, according to 2012 NACS State of the Industry data. Two years ago, average cold dispensed beverage sales per store were less than $50,000. By comparison, average packaged beverages sales per store were nearly five times that amount. Click Here for the complete article. June 2013 - TULSA, Okla. -- QuikTrip Corp. was voted the most popular convenience store chain in a new study by Market Force Information. More than 7,600 consumers participated in the study.
The Tulsa, Okla.-based convenience retailer was followed by Wawa Inc., RaceTrac Petroleum Corp., Speedway LLC, ARCO/ampm, Casey's General Stores Inc., Circle K Stores Inc., 7-Eleven Inc., Valero Corner Stores (now known as CST Brands Inc.) and Shell Oil Co. to round out the top 10. Click Here for the complete article.
May 2013 - The 2012 color of the year, PANTONE 17-1463 Tangerine Tango, a spirited reddish orange, provided the energy boost we needed to recharge andmove forward. Emerald, a vivid verdant green, enhances our sense of well-being further by inspiring insight as well as promoting balance and harmony. Most often associated with brilliant, precious gemstones, the perception of Emerald is sophisticated and luxurious. Since antiquity, this luminous, magnificent hue has been the color of beauty and new life in many cultures and religions. Also the color of growth, renewal and prosperity, no other color conveys regeneration more than green. For centuries, many countries have chosen green to represent healing and unity.
"The most abundant hue in nature, the human eye sees more green than any other color in the spectrum," said Leatrice Eiseman, executive director of the Pantone Color Institute®. "As it has throughout history, multifaceted Emerald continues to sparkle and fascinate. Symbolically, Emerald brings a sense of clarity, renewal and rejuvenation, which is so important in today's complex world. This powerful and universally-appealing tone translates easily to both fashion and home interiors."
Apr 2013 –CATEGORY MANAGEMENT OUTLOOK REPORT 2013 -- Sales of coffee dominate sales of hot beverages, making up 83.3% of the total hot beverage market in the US. Coffee consumption is expected to increase through 2015 at an average annual rate of 2.7%, while tea consumption is expected to increase through 2015 at an average annual rate of 3.1%, according to the National Coffee Association's (NCA) National Coffee Drinking Study. Click Here for the complete article
Mar 2013 – NATIONAL REPORT -- Three-quarters of convenience store retailers use Facebook, and image building is their dominant strategy for the social media platform, according to a new social and digital media study conducted by Convenience Store News and Balvor LLC, a leading retail industry consultancy. That’s significantly more than the number that use digital platforms such as e-mail marketing (56 percent) and text messaging (51 percent). Click Here for the complete article.
Feb 2013 – Exclusive study shows highest sales since 2008!
NEW YORK -- The convenience channel's continued efforts to upgrade its coffee offering--considered by many the gateway to any successful breakfast foodservice offer--is paying dividends.
In data obtained exclusively by CSP Daily News, the convenience store industry reported its highest coffee sales in five years. A report by foodservice market research specialists StudyLogic, Long Island, N.Y., shows 2012 net coffee sales at more than $2.85 billion, placing it third in total coffee volume, behind coffee shops and burger restaurants. (Coffee sales include brewed, espresso and blending services.)
"This is an exciting time for c-stores," said Samuel Nahmias, executive vice president and COO at StudyLogic. "For the first time in five years, c-stores are finally growing their total hot beverage unit sales after the economy fell in late 2008. We are now back and above historical unit consumption levels. Click Here for the complete article.
Jan 2013 – Millennials are replacing their Baby Boomer parents as the power generation.
Brad Morris, senior manager of customer advisory services for Coca-Cola Refreshments, was walking through a large grocery store about a year and half ago when he spotted a young mother under 30 years old with her toddler and made two notable observations.
First, she was carrying a Coca-Cola product that was not yet available at the store and was most likely purchased from a convenience store. Secondly, as he tells it, Morris saw the young mother pick up a box of cereal, snap a picture of it on her smartphone — possibly reading the bar code or accessing nutritional information — and then place it back on the shelf.
Morris had just witnessed the new "It" consumer: the Millennial.
Click Here for the complete article.
I am a huge fan of your "EasyGo Drinkware" stainless lined travel mugs. I HAD 1 that I used daily for over 6 years!!! Somehow it just disappeared. I am interested in purchasing a mug. Looking forward to hearing from you ASAP. Thanks, Kathy Feste.
MME – We replied to Kathy that our ‘EasyGo Drinkware’ product line is available in large and small chain convenience stores nationwide.
Specials are brewing nationwide as convenience stores pour on the promotions to perk up profits from the coffee category.
7-Eleven Inc.’s fourth annual 7-Election Presidential Coffee Cup Poll, which lets customers vote by picking a blue donkey- or red elephant-themed cup, is in full swing. Meanwhile, Pumpkin Spice coffee has returned to Wawa Inc.'s stores, while Pumpkin Spice cappuccino is wooing The Pantry's Kangaroo Express customers through this fall. And promotions aren’t limited to a single season.Kangaroo Express is also enticing java lovers with its Roo Mug, a reusable Bean Street Coffee mug that debuted Oct. 3 and retails for $1.69 — the same price as an extra-large coffee. The first fill is free and refills are just 99 cents. Customers can build their own brew and share it with Facebook friends at www.beanstreetcoffee.com. Those who join The Roo Club can save even more by texting “ROOCLUB” to “THEROO” for deals like 49-cent coffee and free refill days.
The growing prevalence of coffee promotions underscores the important role this hot beverage plays in today’s competitive marketplace. As industry experts explain, coffee is key to driving store traffic and increasing profits in the process.
“McDonald's has upgraded its offering and other retailers like Subway have entered the breakfast market with quality programs,” said Dean Dirks, CEO at Dirks & Associates, a consulting firm that advises the convenience store industry on foodservice issues.
“Foodservice is the differentiator for c-stores and continues to be a growth engine. That includes hot coffee, which is a top 10 category just behind candy, and a top three margin category from a profit perspective,” added Paul Weitzel, managing partner at Willard Bishop LLC, who leads the consulting firm’s efforts to provide cost reduction and profit-building solutions to the grocery, convenience, mass, drug and foodservice channels. “Coffee is a trip driver and very important for satisfying the morning on-the-go shopping occasion...If done right, coffee can be one of the most important levers for loyalty.”
Wawa is taking differentiation a step further as it rolls out a new made-to-order hot and cold espresso beverage program this year to its 600-store chain. As reported earlier by CSNews Online, the made-to-order cappuccinos, lattes, chai and other beverages are part of the chain’s latest foodservice reinvestment initiative.
The new line is an extension of the chain's smoothies and frozen cappuccinos, which launched in 2010 along with a complete coffee section reimaging. While all employees are trained to make the new drinks, there are associates designated to be the lead on making beverages for each shift. Currently, its espresso menu offers more than 22 options, in addition to the smoothies and frozen cappuccinos.
By the Numbers
Driving store visits and building customer loyalty have become essential goals as demand for gasoline and tobacco products has waned, according to the recently released Nielsen report, “Growing Appetite for C-Stores.”
“While sales trends are crucial, trip and purchase incentives are equally important,” the study stated. “Consumers will respond strongly to promotions as seen by a 14 percent growth in promoted unit sales, which is over four times the rate of growth of non-promoted unit sales.”
Coffee promotions can help meet those goals—especially since coffee already is the top planned c-store purchase. Ninety-six percent of coffee buyers know they are going to buy a cup of coffee when they enter the store, and more than two-thirds of customers buying coffee at c-stores do so four or more times per week, according to information from Willard Bishop Consulting.
Despite the growing popularity of specialty hot drinks, traditional coffee still dominates in the convenience channel. In 2011, it accounted for three quarters of all hot beverage sales, according to the Convenience Store News 2012 Industry Report. Coffee including flavored, accounted for 75.2 percent of hot beverage sales, while cappuccino/specialty coffee comprised 16.4 percent of dollar sales in the category.
And coffee’s popularity shows no sign of slowing. Daily coffee consumption soared by seven percentage points in the past year, moving coffee ahead of soft drinks, according to the 2012 National Coffee Drinking Trends (NCDT) report from the National Coffee Association.
The NCDT also revealed that total coffee consumption jumped from 68 percent to 73 percent for past-week consumption and from 76 percent to 78 percent for past-year consumption, while gourmet coffee consumption moved from 37 percent of all cups of coffee consumed in 2011 to 46 percent in 2012.
Best Practices, Improved Sales
While special prices for mugs and refills and limited-time seasonal offerings are among the most popular strategies for increasing c-store coffee sales, there is room for improvement in coffee marketing campaigns.
Willard Bishop's Weitzel, for example, believes the power of seasonal promotions remains largely untapped. “Starbucks does the best job of this and has created great seasonal demand and excitement,” he said. “Right now, most coffee programs are straightforward with standard flavors every day. I think c-stores can learn from [Starbucks’ approach] and create their own seasonal offerings.”
Leading c-store executives recognize that improved coffee programs can boost coffee sales. They shared information about their companies’ best practices at the 2012 Convenience Store News Foodservice Summit <http://www.csnews.com/article-serving_up_foodservice_insights-2973.html> , presented in partnership with Tyson Foods, in March.
Wawa, for example, focuses on customization and employs a master coffee roaster who oversees the specifications of all its roasts — an approach that facilitates the product development process within its supplier relationship, said Mike Sherlock, Wawa’s director of foodservice.
Alimentation Couche-Tard Inc.'s Circle K stores are revamping coffee presentations, moving away from flavored coffees, and tapping into the “Make it Your Way” trend. "We're going to more robust varietal blends, limited flavors and offering customization,” Larry Brueggemier, director of foodservice development, said. Circle K is also replacing standard glass pots with soft heat containers — a move Dirks sees many retailers making because they can’t control the quality of the coffee in open glass pots.
Creating an in-store presentation that draws customers to the hot beverage section is also proving a profitable plus. Case in point: When Kwik Trip remodeled its hot beverage area and added an island-style layout, coffee sales increased 5 percent to 15 percent, depending on the store.
As Jim Bressi, Kwik Trip’s director of food research and development, stressed when summing up how to attract more coffee lovers to c-stores, "You have to make the customer believe it's a wholesale change for them.”
– I spoke to your customer service this morning about my coffee cup, I have had my 20 oz. Mercury coffee cup for almost 6 years, it was a DD for Dunkin' Donuts, I have been drinking my coffee out of this cup and no other, I even took it on vacations with me. This is by far the best coffee cup ever made. Well my cat Sox who I love very much jumped on my desk and knocked it off of my desk and the outside of the cup cracked. I had coffee in another cup this AM and just did not enjoy my coffee at all. I must say that 12/3/2012 is one of my saddest day of all. Please help me enjoy my coffee again and replace my cup I will pay what ever it is. Thank you so much. Michael A., Lyndhurst, NJ MME – We had ‘Sox’ cough up a replacement.– I bought one of your 20 oz wood grain mugs at a 7-11 about 8 years ago. I would have to say during the 8 years I have drank 5000 cups out of
this mug. I don't see where I could order another one straight from you. Would you happen to know of anyone that is selling the 20 oz wood grain mug?
Also, one of the things I like about your mug, I can drive from Saginaw Michigan to the Ohio Turnpike, about 2 1/2 hours and my coffee would still be hot!
James Schmidt, Saginaw, MI.
MME – We replied to James indicating the wood grain collection has been replaced by our popular Camouflage Mugs using ‘Next Camo ®’ licensed patterns. These same quality mugs are good for another 8 years/5000 cups - available in convenience stores nationwide. Good morning! I have had one of your 32oz cold insulated hour glass shaped mugs for years. This has become very sentimental to me because of all the fire incidents I have taken this mug with me up and down the state of California. The shape is what’s the huge plus because no matter where I have gone, the mug rides on my center fold down arm rest and never spills going around corners or on rough roads, which is about 80% of my firefighting roads I travel.
Today your EasyGo mug fell off my fire engine and the lid cracked in two. The rest of the mug is in great shape. The lid had a screw style attachment and swivel top to allow the straw to go into the mug. I would absolutely love to buy one of these lids, or a whole new mug if I knew where one would be located. I’m afraid my "old' firefighter mug might be an antique too. Oh yes it’s a red mug with engraved flames above the little EasyGo medallion that was on each side too. If there is any way you can help my search I would greatly appreciate it!
Sincerely, Rick–Captain Monterey Park Fire Department, CA“It’s great the convenience store community came together and raised over $7000 for ‘Team USA’ from proceeds on the sale of each travel mug.” commented Steve Schlotzhauer, President of Mugs Made Easy. “Moreover, we are happy that our ‘Team USA’ branded travel mug promotion was a success and well received by c-store customers across the country – thank you for helping support U.S. Olympic athletes – www.teamusa.org” Helping build a great coffee experience for your customer is what we’re all about.
Apr 2012 – I purchased one of your “Mugs Made Easy” mugs, a 20 oz. Mercury mug. I have had this mug for several years and must say it is the best mug I have ever had and I have owned many. This mug is very sturdy and will keep coffee warm for several hours. I accidentally dropped the mug (not the first time) and the handle broke. I cannot find this mug anywhere and would like to purchase a replacement. My niece even stopped at travel centers along the way to the beach and found a similar mug, but it does not come close to being the same quality mug. Again many thanks for your assistance. Justin – Greenville, TN
Mar 2012 – ALEXANDRIA, VA – Beverage purchases drive gas customers inside the store more than any other item, but new preferences are emerging, with consumers saying that more foodservice, more healthy options and more local involvement could all increase their spending at convenience stores, according to findings released today from the new 2012 NACS Consumer Fuels Report .
While nearly half (48%) of gas purchasers said that they never go inside the store, for those who do, they said that beverages (coffee in the morning, cold drinks the rest of the day) are a big lure, with one in four consumers (25%) saying that they regularly purchase drinks. A higher percentage said that they purchase drinks in the morning (33%), indicating that coffee is a solid traffic-driver for in-store sales. Also, younger consumers (ages 18 to 24) are much more likely to buy drinks: 43% of younger customers said that they buy drinks inside the store, compared to only 19% of those age 50 and older.
“Convenience and fuel retailers know that consumers are extremely price sensitive with respect to gasoline, and determining the link between gas and in-store purchases was a central question that NACS sought to answer in the 2012 NACS Consumer Fuels Report,” said NACS Vice President of Government Relations John Eichberger. “A retailer’s gas price is clearly the primary attraction for consumers to both buy gas and shop inside the store. That is why the gross margin (the markup) on a gallon of gasoline is usually only 5% to 6% — far lower than the markup on any item inside the store — and possibly the lowest margin percentage in all of retail.”
Retailers fight to get consumers to their gas pumps, knowing that they will travel to another location for a better price, translating into both a loss in sales on gas and in-store items. A retailer’s fuel margins are razor-thin — in 2010, 67% of convenience store revenues were from gas, but only 26% of profits were generated at the pump. NACS found that once a consumer purchases gas, retailers often have several options to get them inside the store.
While beverages are the biggest in-store traffic driver, foodservice is growing in popularity at convenience stores. More than one in four consumers (28%) said that they would be “very likely” or “somewhat likely to buy food at a convenience store. One in 11 consumers (9%) said that they had eaten food at a convenience store within the past day, while 43% had purchased food from a store in the past month.
Traditional snacking items in convenience stores remain the most popular food choices — over the past year, 29% of consumers purchased chips/salty snacks and 20% purchased candy bars, but healthy options are being sought by a growing group of consumers. Over the past year, one in 11 consumers (9%) had purchased yogurt, nuts or granola, 5% had purchased salad and 5% had purchased fresh fruit. Fruit is particularly popular in the West, with one in 10 consumers (10%) saying that they bought fresh fruit.
Healthier items do not yet dominate in-store sales, but the idea of having healthy options available is very important to consumers. Nearly two-thirds of consumers (63%) say that they would be more likely to shop at a store that offers healthy options. Community engagement is also important, with 61% of consumers saying that they would be more likely to shop at a store that supported the community. Reprint from 2012 NACS Retail Fuels ReportCanton, MA. – As the temperatures drop, the popularity of iced coffee is heating up. According to an independent survey commissioned by Dunkin' Donuts, an overwhelming majority (84%) of iced coffee drinkers claim they are drinking more iced coffee this winter compared to last winter. And, people are turning to ice for more than just a boost to make it through a winter day, as nearly two-thirds feel that iced coffee gives them a mental edge over colleagues at work.
Dunkin' Donuts conducted the survey during the last week of December 2011. Polling 500 iced coffee drinkers throughout the country, the survey examines the "cold hard facts" about iced coffee consumption, and how and why coffee drinkers are warming up to iced coffee during the winter.
Eighty-four percent (84%) of respondents say that they are drinking more iced coffee this winter than last winter. Eighty-six percent (86%) of respondents say that they are drinking more iced coffee this winter compared to three winters ago.
Meanwhile, 77% of respondent’s claim that iced coffee makes them feel more productive at work, while nearly two-thirds (64%) of respondents believe that drinking iced coffee gives them a mental edge over their colleagues.
Iced coffee drinkers also savor the flavor. According to the survey, 90% of respondents go for flavor in their beverage. The most popular choices for flavored iced coffee among survey respondents are French vanilla (30%), mocha (27%) and caramel (21%).
When do most people crave iced coffee? For iced coffee drinkers responding to the survey, the most popular time of the day is between 10 am and 2 pm (41%), followed closely by 2 pm to 6 pm (37%).
More than half of respondents (55%) say that they feel cooler and trendier by holding a cup of iced coffee. The percentage increases to 60% among younger iced coffee drinkers, age 18 to 24.
Dunkin' Donuts' survey also examined ways besides iced coffee that people get themselves going and keep themselves running during the winter months. Some of the top responses include:
Going to the gym (35%)
Planning a vacation (19%)
Watching the football playoffs (17%)
Watching new shows on TV (17%)
Receiving a tax rebate (12%)
“As the company that serves the most iced coffee in America, we've seen iced coffee consumption continue to rise steadily in winter months, with iced coffee now nearly as popular as the classic cup of Dunkin' Donuts' hot coffee even during the coldest time of year," said John Costello, chief global marketing and innovation officer at Dunkin' Brands. "As our survey results show, more and more people recognize iced coffee as the perfect way to gain some extra energy or a mental edge that can be so important for keeping running through the long winter days." Reprint from NACS Daily News
Jan 2012 – The hot beverage market continues to grow, with over two-thirds of coffee consumption being out of home. Don’t think that quick service restaurants haven’t noticed. QSRs have dramatically increased product offerings to include more hot beverages. McDonald’s, for one, has increased their McCafé offerings helping them increase their same store sales for 55 consecutive months. Even convenience stores are upgrading their hot beverage selection to try to compete with the quick service options.
Specialty Hot Beverage Operators currently make up 5% of the consumer spends in the Limited Service Market, of which over 11,000 are independent operators. Still, the market is dominated by the large chains like Starbucks that added an additional 17,000* units globally. (www.starbucks.com: End of fiscal 2010)
The hot beverage market doesn’t seem exciting on paper. After all, the chance a prisoner opts for a cup of coffee as a last meal over a juicy steak is pretty slim. However, a $14.4 billion market in a declining economy is simply something manufacturers cannot, and should not ignore. The hot beverage market is one of the few markets that have shown continued growth over the past 4 years. The global market for hot beverages (coffee and tea) is forecasted to reach $69.77 billion in value and 10.57 million tons in volume by the year 2015.
According to Cathy Kearns, General Manager at CHD Expert, "We have seen independent and chain coffee shops continue to dominate new restaurant net growth in North America. The Hot Beverage market transactions have nearly tripled between 2000 and 2011 whereas the Limited Service Foodservice transactions have decreased by 7% during the same period.”
Why is Hot Beverage market on the rise?
Future growth in worldwide coffee and tea industries is expected to rely on a few key factors – quality, health and convenience.
Widespread awareness of health benefits associated with hot tea continues to drive the beverage to new heights of popularity. Hot tea is one of the healthy beverages recommended by the American Journal of Clinical Nutrition. So go ahead and have that second helping of fries, just make sure to wash it down with a nice cup of hot tea.
Gourmet coffee continues to be a significant portion (37%) of total coffee consumed; indicating that consumers want to maintain coffee quality despite the economy. The constant demand for Coffee had helped it sustain extraordinary sales levels even in an uncertain economy. As the economy recovers, rising levels of affluence, consumer awareness and greater per capita consumption in developing economies, is slated to accelerate future growth. No matter the consumer age group, coffee consumption is on the rise:
40% of 18-24 year olds drink coffee daily, up from 31% in 2010
54% of 25-39 year olds drink coffee daily, up from 44% in 2010
An increase in consumption among younger drinkers demonstrates strong category loyalty, which suggests a solid customer base for future growth.
Whether it is a case for our cell phones, or the toppings on our pizza we want everything we have OUR way. Ordering coffee with two creams was a thing of the 90s, I’ll take a tall half-skinny half-1 percent extra hot split quad shot latte with whip. Thanks.
Reprint from Brad Bloom - CHD Expert www.chd-expert.com
Dec 2011 – How can I get some flame tumblers? I purchased 10 flame mugs from a store here in Utah 10 years ago. They discontinued selling them. I now have just one. Three were stolen by old girl friends. One was in a back hoe accident. Two were run over when I balanced them on my bumper. One I forgot on the top of Snowbird Ski Resort while camping. My brother’s daughters made two into boats at the lake until they filled up and sank to the bottom. Now how can I get more? I like the flame mug style. HELP!
Scott – Lehi, UT
Coffee is an important part of the profitable hot dispensed beverages category, which adds around $3,676 margin dollars per store per month, according to NACS State of the Industry data for 2010. Combined with cappuccino and specialty coffee - coffee accounts for the lion’s share of the category’s sales. Tea, hot chocolate and other dispensed beverages make up less than 3 percent. In 2009, coffee, cappuccino and specialty coffee sales per store neared $80,000. Download Article Click Here “It’s an incredible honor to be part of the United States Olympic family, and we look forward to introducing our ‘Team USA’ EasyGo Drinkware line", said Steve Schlotzhauer, President of Mugs Made Easy. “Moreover, we are happy that our ‘Team USA’ branded travel mug line will provide proceeds from the sale of each mug to help support U.S. Olympic athletes – www.teamusa.org” Helping build a great coffee experience for your customer is what we’re all about. Sept 2011 – Is McDonald’s stealing your coffee sales? – It’s irritating, really. Business people are told to have patience, that success often involves failure, humility, persistence and countless trips to the drawing board, right? Then McDonald’s comes along and
in less than two years, pushes the lid off our coffee programs. It’s not enough that Micky D’s ratcheted up its regular cup of joe, but the global giant had the nerve to usher in a line of frappes, mochas, lattes and cappuccinos. It even had the chutzpah to call it a café. And it worked. Download Article Click HereAug 2011 – Six ways to build millennials trust. - The millennial generation is changing the way companies are marketing themselves, due to millennials significant population and the profound changes in how they conduct their daily lives compared to any generation before. Your goal is to build their trust in your business. Millennials are the largest generation in U.S. history at more than 50 million and they identify technology as the differentiator between themselves and other generations. Download Article Click Here
July 2011 - HOUSTON – Getting a cup of coffee or another dispensed beverage is the single-minded mission of many high frequency convenience store visitors, and often they’ll grab a donut or something else to go with it, according to research by The NPD Group.
NPD’s Convenience Store Monitor, which continually tracks consumer purchasing behavior of more than 51,000 convenience store shoppers in the United States, reveals that 86 percent of coffee purchases are planned and 7 percent are purchased on a deal. Other dispensed beverages are also purpose-driven purchases, with only 14 percent bought on impulse and 13 percent on a deal. Consumers of coffee and other dispensed beverages are high frequency buyers who represent 68 percent more visits than the average convenience store customer.
“The fact that the buyers of coffee and other dispensed beverages are defined differently than the typical convenience store visitor presents an incremental opportunity for c-stores,” said David Portalatin, executive director of industry analysis at NPD, in a press release. “If a convenience store can deliver on what dispensed beverage buyers are looking for in terms of product quality, a rewards program, and a clean and bright store, it can attract a loyal new customer base.”
Coffee and other dispensed beverages represent 31 percent of unit purchases made in a convenience store, and of the dispensed beverage consumers, 33 percent are looking for coffee, 11 percent cappuccino or latte and 3 percent hot or iced tea, according to NPD. Typically, with the dispensed beverage incremental purchases are made amounting to an average visit of $6.83. Forty-five percent of consumers who purchase their coffee between 6 am and 10 am tend to also purchase donuts, gum, sweet rolls, sandwiches, breakfast sandwiches, snack cakes and cookies, reports NPD.
Dispensed beverage buyers are different than average convenience store buyers, who tend to be blue-collar males, 18-to-49 years old, according to NPD. Dispensed beverage buyers tend to be female, ages 35-64, white collar, Hispanic and from larger households. Coffee buyers tend to be male, ages 45-65, a mix of white and blue collar, strong military connection, smaller households and higher income.
“The fact that coffee and other dispensed beverages are purpose-driven purchases is a ready-made niche for any convenience store ready and willing to compete with QSRs and other retail outlets offering coffee and beverages,” said Portalatin. “If a convenience store is looking for a way in which to distinguish itself from its gasoline or other offering, dispensed beverages appear to be among the possible answers.”
Reprint from NACS Daily News http://www.nacsonline.com
June 2011 - SCOTTSDALE, Ariz. -- It's enough to make a coffee guru weep: Customers rate the variety of coffee additives as more important that the variety of coffee. In other words, if you don't have the right creamers, your beans don't matter that much. Dan Streetman, certified lead instructor for the Specialty Coffee Association of America (SCAA) and director of coffee for Irving Farms Coffee, didn't weep--but he definitely winced--when pointing out that factoid in the breakout session "Recipe for Great Away-From-Home Coffee" at the fourth annual FARE (Foodservice at Retail Exchange) conference.
Citing facts and figures from a WhiteWave Foods study on coffee consumers, Streetman detailed the reasons why a quality coffee program is a must-have:
Coffee is the third-most-consumed beverage in the world behind water and soda.
150 billion cups of coffee are consumed in the United States every year.
Consumers average 12 coffee drinks per week.
Only 11% of consumers say they never drink brewed coffee.
One-third of coffee consumers drink it multiple times per day.
The specialty-coffee segment is growing at 20% per year.
Based on the WhiteWave study, consumers have three demands for a coffee offering: Make it fast, make it fresh and make it mine.
And they mean fast: According to the study, customers want to leave their car, buy the coffee and be back in the car in less than four minutes. That sounds like a tall order. To achieve that, Streetman suggested placing a coffee display close to the front of the store, or at least visible from the front, so the customer doesn't need to waste time hunting for the brew. Along with visibility, adequate, neat prep space is crucial. Forty-nine percent said they would not return if they experienced a messy or unclean coffee area. That might mean having an extra person on the floor who's in charge of keeping the prep space tidy, Streetman said.
When it comes to freshness, Streetman (pictured) said, the key drivers for consumers are "absence of negatives." And "freshly brewed" is the most important factor when having a quality coffee experience, according to WhiteWave.
Consumers want coffee that:
Does not taste burnt.
Is freshly brewed--not old, "stale" pots of coffee.
Is not watery.
To avoid these negatives, Streetman suggested that retailers brew high-quality coffee, and brew fewer roasts more frequently. Most consumers are content with four roasts: regular, French, decaffeinated and Colombian.
To brew high-quality coffee, the three most important factors are:
A correct coffee-to-water ratio. The "golden cup" standard set by the SCAA for the coffee-to-water ratio is 3.5 ounces by weight of coffee to 64 fluid ounces of water.
A grind to match brewing time. Normal drip brewing takes 4 to 6 minutes. If the coffee is too fine, it will increase the brew's bitterness; if it's too course, it will be bland and watery.
Good quality water (because brewed coffee is 98% water). Technically, the sediment content of the water should be 75 to 250 mg/L of total dissolved solids. Streetman stressed the importance of a good water filter; spending thousands of dollars on high-quality coffee equipment is pointless if it's going to get clogged up by unfiltered water and the minerals it contains, he said.
Coffee's flavor degrades over time, and heating it destroys its flavor. If you're brewing coffee every hour, that's reasonable, he said; anything less is "fantastic."
And now back to that creamer statistic. Making the coffee "mine" is key, 72% of participants in the WhiteWave study said. The most appealing attribute for do-it-yourself coffee is "ability to customize." A big part of that is the variety of sweeteners, creamers and syrups on the coffee bar.
"When people think about coffee, they think about creamer," Streetman said. They would rather have more choices in additives than "outlandish flavors of coffee," he said. Also, 50% would consider not returning to a location to purchase coffee based on a poor creamer experience.
Reprint from CSP Daily News, July 1, 2011 - by Jennifer Bulat http://www.cspnet.com
May 2011 - University of South Florida researchers have found that consumption of coffee prevents the occurrence of Alzheimer's disease. According to the study, caffeine boosts the blood levels of a critical growth of granulocyte colony stimulating factor (GCSF) protein, which is usually decreased in patients suffering with Alzheimer's disease, reports medindia.net.
The researchers conducted a treatment on Alzheimer's mice and normal mice, which showed caffeinated coffee increased blood levels of GCSF. Although the study was performed in Alzheimer's mice, the researchers gathered clinical evidence of caffeine/coffee's ability to protect humans against Alzheimer's, which they are planning to publish soon.
The study states that average American drinks 1 to 2 cups of coffee a day, considerably less than the amount the researchers believe required to protect against Alzheimer's disease. The researchers believe that moderate daily coffee intake starting at least by middle age (30s - 50s) is required for reducing the risk of getting Alzheimer's disease, while starting it even in older age appears protective from the disease.
University of South Florida neuroscientist and lead author of the study Chuanhai Cao said," Caffeinated coffee provides a natural increase in blood GCSF levels and the exact way that this occurs is not understood."
"There is a synergistic interaction between caffeine and some mystery component of coffee that provides this beneficial increase in blood GCSF levels," Cao added.
Reprint from DBR http://hotdrinks.drinks-business-review.com
Apr 15, 2011 - Starbucks, Dunkin' Donuts and McDonald's can still count on a large percentage of loyal coffee drinkers, but recent research found that "roamers" still rule the roost. CustomerDNA, a marketing and research consulting firm, recently conducted a benchmark survey of the shopping habits of more than 15,000 quick serve restaurants. Its report, "QSRdna", found that 41 percent of Starbuck's customer visits are from customers who can be described as "loyals" who do not frequent any other coffee/breakfast chain during the average month. However, the report also found that 53 percent of customers can be described as "roamers" also visit either Dunkin' Donuts or McDonald's during the average month.
Similar patterns emerged at Dunkin' Donuts and McDonald's. Dunkin Donuts counts 42 percent loyals and 53 percent roamers; McDonald's had the most loyal customers with 62 percent visits by customers who do not visit either of the other two during the average month, according to the report.
"The significance of these patterns became clear when we found that the roamers purchased a hot beverage and/or breakfast nearly twice as often as loyals," said Dave Jenkins, CustomersDNA's co-founder. "During the average month, loyal customers of each of the three chains visited their favorite store 6.7 times, while the roamers averaged 13 visits per month. Capturing more of these sometime-customers to is key to winning the coffee/breakfast battle."
Reprint from Convenience Store News – Foodservice Retailing.
Mar 2011 - I wanted to share a story with you regarding my travel mug. This morning, March 24, 2011, I was getting ready to leave my garage for work, with a stop at the dog groomers on the way. One of my dogs decided not to get in the car so I placed my coffee mug on the roof of the car so that I could assist my stubborn dog into the car. After doing so, I backed out of the garage and proceeded up the street in front of our house when I heard a bang, clunk, clunk sound coming from the car roof area. I than remembered that was the location of my travel mug; no traffic was coming so I stopped the car and went to retrieve my mug. To my surprise, not only was the travel mug intact after its summersault off the top of my car, the lid was still in place, and I had not lost one drop of my morning cup of coffee. Great product! Keep up the good work. - Respectfully, Pastor John S. Weyant
Feb 2011 – Just sending this email to thank you for the great product you make. The EasyGo 20 oz. Sabre Tumbler is one of the best mugs I have ever had, other than a few other EasyGo handled mugs I've used in recent years. I really do like the 20 oz. Sabre Tumbler which I have had for about a year. It works perfectly in my vehicle I drive to work (about 100 miles a day) and in the side pocket of my laptop backpack which I carry 1-2 miles per day. Unfortunately, I recently broke the lid on my mug....no fault of your product but rather of me when putting backpack into car. I knocked the lid off and didn't notice until I was backing up my car and ran over the lid. Unbelievably from the top it looked OK but the bottom did not fair well with plastic crushed which the rubber gasket goes on and gasket tore making the mug unusable with the lid. I would like to see if I could get a replacement lid or check on cost of getting one. I have not been able to find anyone locally that has this mug or even another brands that is this size which will work for me. If possible I would like some info on a replacement lid. Thanks, Jason - Jasper, IN
Jan 2011 – Our Upscale Drinkware‘s high perceived value and quality make $3.99 / $4.99 and $5.99 retail price points a great deal for your customer. Add in a First Fill Free’ sticker option and POS ‘refill savings’ program – know your customer is doing the math and figuring out their new travel mug purchase will pay for itself within weeks. First Fill Free savings + Daily Refill savings = a free mug over time. Along with advertising dollars well spent! Who would of thought a travel mug has this much value – well our customers do so when that 10-15 second ‘Travel Mug Moment’ happens give us a call. Helping build a great coffee experience for your customer is what we’re all about.
Nov 2010 – Our new EasyGo Drinkware ‘Travel Mug Moment’ catalog offers over 50 drinkware styles from 12oz to 24oz / desk top to car cup friendly / double wall insulated to single wall stainless water bottles. Along with our new edition ‘Gourmet Collection’ catalog that features specialty coffee retail designs and sizes. MME has been creating drinkware solutions for over 15 years - so call today for an updated catalog.
Oct 2010 - I purchased a couple of your mugs locally about 5 -10 years ago and they have been the best coffee cups I have ever purchased. They have fallen off my truck going down the road, run through the dishwasher always, and beat up on jobsites and they will probably out last a Timex or a Bic Pen. Please let me know how or where I can purchase more.
Richard – Jacksonville, Florida
Oct 2010 - The NACS Show (National Association of Convenience Stores) took place October 5 to 8 at the Georgia World Congress Center in Atlanta. It is ranked as one of the 50 largest annual trade shows in the United States with nearly 22,000 representatives of the global convenience and petroleum retailing industry turning out, including 1,400 international attendees. There are 144,541 convenience stores in the United States — one per every 2,100 people. Cumulatively, their $511 billion in sales are similar to competing channels that are often thought of to be much greater, including restaurants $580 billion and supermarkets at $556 billion in annual sales.
The success of this year’s NACS Show goes beyond the numbers as the popularity of upscaling the convenience store ‘coffee bar’ surges. Mugs Made Easy and our ‘Travel Mug Moment’ emphasizes the importance of capturing the consumer’s attention with a well designed, great looking upscale travel mug.
Introducing 8 new 16oz travel mug designs, a new double-walled porcelain tumbler with silicone lid and sure-grip sleeve and a diamond plated stainless steel water bottle – MME remains the industry leader. So when that 10-15 second ‘Travel Mug Moment’ happens give us a call. Helping build a great coffee experience for your customer is what we’re all about.
Sept 2010 - Despite the country’s economic woes, hot beverage sales at convenience stores are increasing with more customers than ever reportedly trading up for high-end brews. You wouldn’t think something as simple as coffee could prove to be so complex a phenomenon—or one so indispensable to Americans.
Turns out America can see its reflection in a cup of coffee—its economic worries, its desires for variety and small-scale luxury, and even its hopes for a brighter future. All of that swirls together inside a disposable cup they pick up at their local convenience store.
The news out of New York and London in August, however, was less inspiring. JM Smucker announced it had raised its retail prices of coffee by 9%, even as wholesale costs had just reached a 12-year high, according to the Financial Times. “With unemployment still above 9%,” the Financial Times wrote, “it is uncertain whether retailers will pass along those increases to consumers, or whether an emphasis on private label brands will increase.”
Since early June, wholesale prices of Arabica coffee have risen more than 30%, a leap that analysts and category observers believe will continue.
Still, it’s a staple. National Coffee Association (NCA) figures released earlier this year showed that more than three out of four adult Americans drink coffee daily or regularly with convenience stores a preferred destination. So while the likes of Starbucks, Dunkin’ Donuts and McDonald’s are focusing a lot of their marketing dollars on coffee programs, convenience store are holding their own in this important category.
“Consumers stop to buy coffee more than they fill up their cars, providing convenience stores with a great opportunity to build loyalty and repeat sales,” NCA noted in its coffee report. The association, in conjunction with the Specialty Coffee Association of America (SCAA), found that more than 150 million Americans aged 18 and older drink coffee on a daily basis, with 65% of coffee drinkers consuming their hot beverage in the morning.
“Considering these stats, it’s no wonder that coffee is the No. 1 hot beverage of choice among convenience store customers, generating about 78% of sales within the hot dispensed beverages category,” said Don Montuori, publisher for Packaged Facts, a marketing research firm.
Packaged Facts found in 2010 that upscale coffee sales continued to be strong because consumers consider them a relatively inexpensive luxury.
“With the advent of the so-called ‘Great Recession’ in 2008, the central question facing the coffee market was whether a product that saw sales growth through upscaling could continue to progress in the face of a severe economic downturn,” Montuori added. “By and large, the answer is yes. Even if marketers must now scuffle for every percentage point of sales growth they get.” While the shift to upscale and specialty coffees diverges from overall trends of the economic downturn, “they interact with each other as customers circumvent cheap ground coffee, and instead make tradeoffs to stay within budget while indulging in premium beverages.”
Given that coffee is such a high-growth category that represents strong profit potential, it should be no surprise that the industry’s leading retailers are focusing a lot of effort to solidify their offerings. More often than not the program begins with studying what customers want.
“To me, coffee is about presentation and offering,” said Jerry Weiner, vice president of foodservice for Rutter’s Farm Stores in York, Pa. “That’s what it is. You create price/value, and you don’t have to get into these hot price battles with McDonald’s. In this market, over the past year they were promoting all cup sizes for just 69 cents— and then they went to $1 for any cup for the balance of the colder months. A lot of the competitors here went down into that valley to try to compete with them, and I just was not going to go there.”
Instead, the 55-store chain took a different approach, finding ways to add value proposition. “We wanted to get the price/value in the consumers’ minds, and that’s where the triple rewards came about,” Weiner said. “That proved to do the job, and of course now we’ve expanded that.”
Selling coffee effectively, Weiner insisted, is about visual presentation. “I’m constantly looking at ways to enhance the visual and make sure that we have a rather extensive offering, which I’m a big believer in.”
Both product and condiment offerings must be sizeable. “I think we’ve reached an era of customization in which people really want to have it the way they want to have it. It’s not just light and sweet anymore,” Weiner said. “They want to really add a lot of things to their coffee, and it isn’t just about having sugar and Sweet n’ Low. It’s long past those days.”
In order to differentiate your coffee program from your competitors’ and enhance your overall brand image, you need to be aware of and capture the emerging trends, said veteran foodservice operator and consultant Arlene Spiegel, president of Arlene Spiegel & Associates in New York City. Guests value, and will pay more for, products that clearly showcase these attributes:
• Quality, as evidenced by its single origin.
• Mindfulness, such as fair trade considerations.
• Occasions, which can be anytime during the work day—the key reason why the brew program must always be served fresh.
• Community. Some companies have found strong sales spikes when they tie in community programs, such as donating a quarter to a local food bank for
every cup of coffee sold.
• Health. Chains like Quick Chek and Rutter’s regularly advertise they use only fresh, filtered water in their coffee programs.
Furthermore, bundling coffee is a proven motivator for consumers. “Coffee needs to be positioned as a reward and piggy-backed with a great baked goods offering,” Spiegel said.
Community, as Spiegel defined it, can prove a major part of the blend. Throughout 2010, 7-Eleven has been collecting what will end up being more than $2 million to charities via its Coffee Cup with a Cause campaign. The charity-focused coffee campaign includes limited-edition 20-ounce coffee cups designed by entertainment and sports celebrities nationwide.
Customers are encouraged to fill those cups with any 7-Eleven hot beverage with the knowledge that proceeds will benefit the charity of the featured celebrity’s choice. According to Rita Bargerhuff, the chain’s chief marketing officer, the program “allows customers to directly support charities and causes that make dramatic changes to so many people’s lives.”
7-Eleven is providing a guaranteed $250,000 minimum donation to each charity.
Earlier this year, Knoxville, Tenn.-based Pilot Travel Centers kicked off a “best on the interstate” coffee promotion that integrated social media messaging. The company placed messages on its fleet of tankers heralding its first Facebook fan page and a new Twitter account, both aimed at promoting the company’s 2010 coffees.
“We are trying to tell the world about our great coffee program,” said Tim Purcell, Pilot’s director of merchandising. “Social networks are just another new method we are using to deliver our message.”
For a limited time, visitors to Pilot’s Facebook page could download a coupon for a free hot beverage and vote for their favorite Pilot coffee blend. Pilot had concomitantly introduced an in-store sweepstakes to further promote its coffee, with winners receiving free coffee for a year.
“I’ll tell you the truth,” said Weiner, “our biggest effort was when we did a triple rewards promotion and tied it into our rewards program, which is really about cents off a gallon of gas.”
Rutter’s customers always received a penny off gasoline when they bought the coffee, but when they went to a triple points reward aimed at increasing fuel gallons sold, it had a dramatic impact on coffee sales.
“Coffee sales based on cups sold per day spiked by more than 20%,” Weiner said. “We did that in January and February, but the important note was that we’ve had a residual impact of about 7% so far, and that’s been holding relatively true.”
Rutter’s first triple-reward program was so well received by customers that the results helped established a new strategy for the company.
By Howard Bell - Reprint from Convenience Store Decisions http://www.csdecisions.com/article/10655/coffees-popularity-surges.html
June 2010 – Starbucks and social media partners were able to bring together creative minds
from around the world to tackle a complex and important challenge.
“Our paper cups really represent our icon and unfortunately
they also represent one of our greatest environmental liabilities
in our customers’ eyes,” Jim Hanna, Starbucks’s director
of environmental impact, said at the announcement. “By 2015,
we want all cups to recyclable, be compostable, or reusable.”
Every year, 58 billion paper cups are thrown away, 20 million
trees are cut down to manufacture these cups and 12 billion
gallons of water are used in the manufacturing process. We
could also power 53,000 homes with the energy we consume with paper cups..
There were 430 submissions and these were updated on average of at least 3 times
in response to more than 5,000 ratings and 13,000 comments. We believed that
good ideas might come from anywhere, but now we also believe the same is true
of great feedback that helps make ideas better. Visit http://www.thebetacup.com/2010/06/17/the-finale/ to view the winning ideas.
Apr 22, 2010 – Tim Balazs – Environmental Communication Officer, joined hundreds of students
on campus celebrating Earth Day - April 22nd. Earth
Day 2010 was a great success and enjoyed a record number
of attendees! “It was really inspiring and hopeful
to see so many of today’s youth take an interested,
active role in exploring what choices an individual
can make daily to begin to repair a planet in peril”
said Tim. “The most refreshing aspect was the attitudes
of the students – it has become ‘cool’ to care for
the environment! Witnessing first hand the universal
interest of students and faculty to our simple message
- ‘Saving the planet one mug/bottle at a time’, illustrated
that we were on the right track” he adds. Mugs Made
Easy will continue to work with and support schools and organizations in a continuing
effort to educate people regarding ‘greener’ choices.
For more information on our EasyGo H2O Water Bottle
Project and EasyGo Green ‘Reduce•Reuse•Refill’ Travel
Mug initiatives please call Tim at 1.800.477.6667.
Apr 2010 – Email from a very dedicated environmental advocate.- THE ULTIMATE
RECYCLER. Hi there, I found one of your mugs at a park I
go to every morning to walk my dog. It was in good shape
and I LOVE my to go coffee mugs so I brought it home and
cleaned it up and I absolutely love the mug. I dropped it
and chipped the plastic but it still works fine. I was wondering
if there is any place to buy your mugs. Mine has nothing
on it and it is my fav color, blue, so it is perfect for
me LOL. I would like to get a couple more because they are
great mugs! Thanks for any info you can give me ... Jacki