The New Face Of Convenience Store Coffee: Part 1

 

Coffee is getting expensive. Due to an overwhelming drought that’s making it’s home in Brazil, (the world’s largest coffee distributor) and a fatal fungus that’s eating up half of America’s coffee bean fields, the prized morning beverage is running low; and it’s prices – sky high.

Coffee prices have risen 50% since last year. This news may sound catastrophic in essence – and for larger retailers, it is. Big coffee brands, like Starbucks, are up against a very shaky, and presumably distressing, margin until prices even out again.

But “higher coffee prices” is actually good news for smaller vendors – in particular, convenience stores. With the price of coffee a bit higher, and drinkers moving from big brands to bargain brands, convenience stores are presented with a wide, open window to fortify their coffee sales and grow their customer base. A dash of innovation and the right promotional tactics can send c-store coffee sales flying with the best of them.

Why Convenience Stores Have An Upper Hand

Coffee is gravely important to the structure of a convenience store. And although coffee covers a whopping 25% of c-store profits, the Mom and Pop shops were never really forced to sell their coffee. The java setup is usually perched in a corner, awaiting morning hoards of thirsty customers.

Now, with higher-end brands losing customers, and notorious chains like Dunkin’ and McDonalds scrambling to out-do each other, convenience stores are offered a glorious “in” to the fast and furious coffee market.

Transforming their coffee programs into more elaborate displays, with quality brews and assorted arrangements, can bring c-stores from “generic vendors” to “serious competitors.” So long as it’s centered on freshness, quality and creativity, with an emphasis in customer satisfaction, a c-store coffee bar is going to see major spikes in sales and major growth in clientele.

Steve Montgomery, President of b2b Solutions, believes c-stores should “remain competitive” in the current coffee market, but cautions to “follow, not lead.” McDonalds And Dunkin’, as household coffee names, will have greater share no matter what. But the primary driver of this market remains fresh, quality coffee at a reasonable price. If c-stores can up the anti on that, there’s no reason why they can’t maintain their chunk of the market.

Convenience Store Coffee Key To Success

The reason convenience stores can be so successful in the current coffee market is because:

A.) They’ve already established a loyalty with their customer base.

Serious, life-long coffee drinkers, who would rather pay a few cents more for a cup of joe, than enmesh themselves in the intricacies of cappa-frappa-caramel-ccinos, are c-store regulars. So, unlike with the bigger brands, there is no eminent threat of c-stores losing their customers.

B.) They offer an ideal alternative for price-conscious customers.

As prices divide consumers, once luxury-coffee drinkers are now on the hunt for lower prices. Value-focused brands, like McDonalds and Dunkin’, are honing in like guided missiles. Despite the efforts of these larger competitors, c-stores will always have the natural lure of cheap, convenient coffee.

It is the dawn of cost-effective brands in coffee sales – and c-stores can capture their fair share of the market so long as they’re playing the game correctly. This involves innovating with a fresh approach: higher quality brews, a more diverse beverage counter, and greater efforts in customer satisfaction.

In our next post, we’ll fill you in on the unique tactics c-stores are using to build their coffee sales! Re-fresh your cup and come back next week. In the meantime, our Java Geniuses are always available to answer any questions you may have. Click below if you’re ready to get a head start on your stores beverage bar, or you just want to chat coffee.

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