Q&A with Jared Stone, marketing manager, SEB Professional North America
What challenges are c-stores facing today with their coffee programs?
Jared Stone: There are various market headwinds that today’s c-stores face each day. Inflation, which hit its highest peak in the past 40 years, has caused retailers to raise prices to protect margins. When you add this to the mix of ongoing labor and waste concerns, pricing pain at the fuel pump and in-store traffic that has not recovered pre-pandemic levels, it makes profitability even more challenging than before.
How can c-stores position their coffee programs to be top of mind for consumers?
JS: Shoppers are utilizing their discretionary spending for only products they want and need. As a result, trip erosion is still occurring to where consumers will drive to a nearby QSR for their desired coffee. C-stores must ensure they are elevating their coffee programs to compete with the stiff QSR and coffee shop competition. If they do not, they are missing out on high margin cup sales.
What is the solution? Evolving their coffee offerings and providing consistent, quality coffee with every cup. Becoming the preferred destination will help c-stores become top of mind when consumers are needing their next pick-me-up at any time of day.
What can c-stores do to better compete with coffee shops?
JS: For retailers that want to grow coffee programs and cup sales, there are a few options. First, consider offering those menu items consumers want and expanding those menu items to reach demand for various demographics. Younger consumers, including Millennials and Gen Z, are drawn to iced coffee as well as espresso-based beverages. Also, people are looking for fresh, fast, and easy options to get what they need at any time of day.
Talk about the rise of iced coffee in c-stores and the opportunity this provides for coffee programs.
JS: There is a big opportunity in iced coffee, since people are looking for something more than what they can prepare for themselves at home. They want something to help them get through the day, and iced coffee and espresso-based beverages are trending due to this. This is a terrific addition to foodservice offerings that are contributing to major in-store profits. The convenience of iced coffee also plays a factor for the consumer that is constantly on-the-go.
Talk about the rise in foodservice within the c-store.
JS: Foodservice has shown to be a very profitable strategy for c-stores, contributing to a significant percentage of in-store dollars. C-stores can capitalize on this opportunity to bolster their coffee offerings with iced coffee and specialty beverages, to boost their coffee sales. Stores are reflecting this data as daily specialty coffee is at its highest in five years. It’s capitalizing on opportunities such as these that c-stores can stay ahead and become more profitable.