Major convenience store brands are finding new opportunities by revamping their coffee offerings. 7-Eleven, Wawa, and Casey’s are using promotions and investing in technology to offer customers more and better coffee options.
The appeal of investing more in coffee for C-stores comes in part because they are in a strong position to take advantage at this time. That is because coffee drinking outside of the house has returned to pre-pandemic levels. A paper published in September by the National Coffee Association (NACS) states that approximately 36% of survey respondents had had coffee outside of the house the previous day.
It’s All Part Of A Plan
We recently wrote about the trend of C-stores trying to compete with QSRs in the hot food space. Taking market share away from QSRs seems to be a priority. Coffee is the next frontier of their battle.
With margins over 66% for coffee, according to the NACS, it’s easy to see why driving increased coffee sales would be appealing. Part of the challenge is that to compete with QSRs, C-stores will need to offer plenty of drink optimizations. Some stores have partnered with coffee venders who specialize in setting up installations for retail operations. For instance, Costa Coffee offers multiple types of machines for different types of retailers, from a touch-screen dispenser that can be set up as a fully self-serve option to the Smart Café. (cstoredive)
Coffee Sells Donuts, Or Do Donuts Sell Coffee?
7-Eleven has spent a little over a year upgrading and updating their coffee stations. This has been a part of their larger plan to upgrade foodservice options in stores.
Previously they focused on bulk dispensers with maybe a couple of specialty machines. The new approach includes iced coffee options with flavorings, as well as new bean-to-cup coffee machines. The upgraded coffee service is expected to be in all eligible stores by the end of 2025.
7-Eleven created a $3 deal that included a donut and a large coffee. Stores saw a boost of over 6% in hot beverage sales per store. The promotion ended up having a bigger impact on sales of donuts. That might suggest that those buyers were already getting their coffee from 7-Eleven, or that better coffee encouraged more donut sales…
Upgrade and Promote!
Casey’s has gone all-in on providing the customization options that are essential to compete with QSRs.
The new program, Darn Good Coffee, includes eight new flavors: Casey’s house blend, 100% Columbian, French roast, “Rooster’s Call” high-caffeine roast, salted caramel toffee, light roast, decaf and the limited-time toasted pecan blend. (restaurantdive)
Wawa has used its new coffee offerings as the lynchpin in pulling customers into its rewards programs. With those rewards, customers are buying coffee significantly more than other foodservice items.
Moreover, the company shared that rewards customers are buying one hot coffee per second, or 60 per minute. Even if every single one of those was Wawa’s smallest coffee size, 12 ounces, that’s almost 3 million gallons of coffee a year to rewards members alone. (restaurantdive)
A New Era For Convenience Stores
The push to upgrade coffee in C-stores reflects a continuing effort to take market share from QSRs. So far, it appears to be working. While coffee has always been important to C-stores, the popularity of customized and high-end coffee drinks may provide part of the key to growth for the entire industry.
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