The C-Store Coffee Craze

The April 2017 Category Close-Up in NACS Magazine says that 79% of coffee purchasing decisions originate before the convenience store is in sight, per NACS Convenience Tracking Program data, which reinforces the importance of staying relevant in the minds of customers. Additionally, a recent GasBuddy foot traffic report found that stores with excellent coffee ratings in the app received 12.5% more traffic between 5:00 am and 10:00 am than those with below-average ratings.

Today’s leading brands and stores aren’t just selling a good cup of joe; they’re directly challenging the coffee shops. They offer amenities like indoor and outdoor seating, artisan drinks such as cold brew and espresso; and in a recent test of iced coffee by Business Insider, the winner wasn’t Starbucks or Dunkin’ Donuts—it was 7-Eleven.

This raises a question:

Are convenience stores becoming the new coffee shops? 

According to NPD Group Inc, traffic growth to large coffee chains is slowing and traffic to small coffee chains and independent shops is declining. Consumers are noticing the growing number of other options available to them, including gas station convenience stores.

In 2017, hot dispensed beverages were the second largest category in convenience store foodservice at 14% of sales. The quality of coffee at gas stations has improved as well. Of the stations in the U.S that have ever received a coffee review in the GasBuddy app, more than 75% received positive reviews. Additionally, coffee was voted the “favorite food and beverage item in the gas station” according to a recent GasBuddy survey.

When purchasing coffee at foodservice outlets, consumers prefer specialty coffee beverages over regular coffee. Specialty coffee servings orders at foodservice outlets overall represent 44% of orders, and regular coffee, 40%. Specialty coffee holds 71% of servings ordered at coffee shops, and regular coffee represents 29% of servings.

“Coffee has been a go-to beverage in the U.S. for a very long time, but it has evolved over the last 10 years,” said Darren Seifer, food and beverage industry analyst at The NPD Group. “Today’s consumers are looking to elevate and personalize their coffee experience with new flavors, recipes, tastes, appliances and accessories.”