Profits by the Cupful

By keeping up with the latest technologies and consumer preferences, convenience store retailers are continuing to make strides in hot dispensed beverage popularity and profitability.

Marilyn Odesser-Torpey • Associate Editor

C-store retailers are adding excitement to the hot dispensed beverage category with bean-to-cup coffee machines, a variety of options, limited-time offerings and promotions.

2021 and 2022 were big years for hot dispensed beverage upgrades for GPM Investments’ convenience stores.

In addition to its traditional brew stations, the company installed bean-tocup equipment in 525 of its approximately 3,100 company-operated stores and dealer sites, which are located in 33 states and Washington, D.C.

“We have received overwhelmingly positive reviews from our customers on the bean-to-cup additions,” said Jim Rastetter, category manager at GPM Investments, a wholly owned subsidiary of ARKO Corp., which owns several convenience store brands, including fas mart, Roadrunner, Scotchman, BreadBox, Young’s, Li’l Cricket, Apple Market and Jiffi Stop.

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“Since their installation, the bean-to-cup stores are outperforming the stores that still have only the traditional coffee program,” he said.

Familiar branded cappuccino flavors such as Hershey’s Hot Chocolate, Cinnabon and Heath Bar add to the appeal of the hot dispensed offerings and sell well, he noted. Rastetter also attributed a recent “significant” boost in coffee trial and sales to a 99-cent-per-cup deal that is available to members of its fas REWARDS loyalty program.

“Our fas REWARDS members get great deals on coffee and food bundles,” he added. “Right now, we are offering a deal with any size coffee and a banana for $1.50 or with a tornado for $2.50.”

Fas REWARDS members also enjoy free coffee throughout the year for special events such as National Coffee Day and during the stores’ “Twelve Days of Christmas” celebration.

Customers like to know the origins of their coffee, he said, and the stores include a backstory with each of its five blends. For example, the current house blend is a high mountain arabica light to medium roast from Central and South America. The decaf is a Rainforest Alliance Certified roast, and a third coffee is a 100% Colombian dark roast.

“Fifty percent of our blends are now sustainably sourced,” he pointed out.

Two flavored coffees — hazelnut and pecan — are also in the mix. The pecan coffee started as a limited-time offer (LTO) and, Rastetter explained, is particularly popular with customers in the Southeast and mid-South. The company is currently working to identify new and unique LTO roasts the stores can implement over time.

FAST FACTS:

• Bean-to-cup coffee has become a favorite among c-store customers.

• Limited-time offers keep coffee offerings fresh and exciting.

• Loyalty card deals can help c-stores promote coffee sales.

Options Entice Customers

Like GPM stores, La Crosse, Wis.-based Kwik Trip and Kwik Star convenience stores offer both traditional drip and bean-to-cup coffee options at their combined 846 stores in five states.

“From testing, we found that many guests prefer drip coffee during the morning rush when they just want to grab a cup and go,” said Paul Servais, retail food service director for Kwik Trip. “Later in the day they’ll go for the bean-to-cup.”

During the height of the COVID-19 pandemic, guests were choosing more ready-to-drink (RTD) coffees and teas. Since then, a growing number have been coming back to hot dispensed, so sales are growing in that category, Servais noted.

Under the proprietary Karuba brand, the stores offer six varieties of coffee each day. They are a signature house roast, dark roast, Colombian, decaf, hazelnut and a rotating LTO. The LTOs are seasonal and change four times a year.

Loyalty card members can get a free cup after 14 coffee purchases.

To promote their coffee, the stores offer a deal with a breakfast sandwich. Social media comes into play when a new LTO is introduced.

In addition to the regular roasts, the stores also offer Karuba Gold self-serve espressos, cappuccinos and lattes made from powder. To promote these beverages, the stores take $1 off the price every Monday. Some guests mix nitro coffee half and half with their lattes.

“Guests like the premium Karuba Gold options, but the real growth is in old-fashioned coffee,” Servais noted. CSD