CSD: The Coffee Battle Brews
By Erin Rigik
a special arrangement, presented here for discussion is a summary of
an article from Convenience Store Decisions magazine.
store operators need to focus on meeting consumer demand for a quality
cup of coffee as McDonald’s, Dunkin’ Donuts, Starbucks and Caribou Coffee
all announced plans to step up their brew programs to reel in consumers
during a tough economy.
war escalated in May as McDonald’s embarked on a national advertising
campaign to position its McCafé line at the front of consumers’ minds.
At the same time, Dunkin’ Donuts began promoting its 99-cent lattes and
50-cent iced coffees. In addition to its instant coffee launch, Starbucks
is offering an ad campaign of its own, touting quality. “Beware of a
cheaper cup of coffee. It comes with a price,” one recent Starbucks ad
warned. Caribou is offering a medium cup of Caribou blend coffee for
$1 on Mondays.
fighting back to keep their core customers from straying by investing
more in hot dispensed beverage programs and recognizing them as a critical
component of the morning daypart.
the Starbucks consumer and those in search of a stronger, dark brew,
7-Eleven recently added Brazilian Bold to its coffee bar and earlier
this month announced a new iced coffee program. The new coffee is the
same price as all other 7-Eleven hot dispensed beverages and offers a
value-priced alternative to coffee houses and doughnut shop brews.
that many young coffee-drinkers prefer a strong, rich flavor, so we developed
a coffee to fit that flavor profile,” said Paul Pierce, 7-Eleven’s senior
director for merchandising.
Inc., which has 353 stores in Wisconsin, Minnesota and Iowa, offers eight
flavors of coffee daily, including chocolate macadamia nut and hazelnut,
which all are very popular in the morning daypart. In addition to speaking
directly with consumers, using store checks to see what is selling and
gathering information from suppliers can help determine the types of
coffee offered already successful in the market place.
Once you know
what consumers want, using limited-time-only items is a way to drive
new flavors for two to three months, whether to create excitement with
a holiday flavor or to test out new blends before adding them to the
line. Some 29 percent of retailers have increased the use of limited-time-only
items compared to last year, according to a CSD/Balvor Foodservice
Retail Survey in March 2009.
is typically a planned purchase, c-stores tend to reward customer loyalty
with club or punch cards that offer a free cup of coffee after a certain
number of purchases. Some 26 percent of retailers increased the use of
punch cards for hot dispensed beverages compared to last year, according
to the CSD/Balvor survey. One way to encourage additional purchases
is with bundle meals, offering coffee with a muffin or breakfast sandwich.
Question: How can convenience stores better compete in the coffee
category with quick-serve restaurants, doughnut shops and coffee
chains? What advantages do c-stores have that they should be emphasizing