Costcutter Supermarkets Group category director, Mike Owen, believes coffee-to-go offers a great opportunity to drive basket sales across food-to-go throughout the day from breakfast to late night pit stops. "For some retailers food-to-go represents over 20% of sales, which clearly demonstrates the value of the category. Regardless of the time of day, there is always a demand for hot drinks and food-to-go.
"To increase the attraction of food-to-go, we encourage retailers to run a range of in-store offers and meal-deal solutions, such as lunch and breakfast bundles, which include a hot drink."
Costcutter retailer Roger Westrope, owner of North St Garages in Haverhill, Suffolk, chose to have Costa coffee in his store because it’s a popular and trusted brand.
"Coffee-to-go is very important, especially within our new food-to-go concept, which we installed last year. Consumers expect a quality food-to-go range in forecourt locations and a premium coffee offering is central to that. The Costa brand is so well known, it is instantly appealing to my customers.
"We’re located on the main road in the town, with a sports complex and leisure club on one side, a housing estate on the other and factories and retail park behind, so a high proportion of our shoppers are commuters, many of whom work in the local factories and industrial estates. We also have some regulars who come in for coffee a couple of times a day."
Costa Coffee installed Roger’s machine and take a percentage of sales on a sliding scale, based on how many cups he sells per week he typically sells 100 cups a day. With such high sales, it’s important to keep the coffee area clean and tidy. "As well as being regularly deep cleaned, we always have a member of staff working in the food-to-go area," says Roger. "They constantly monitor the coffee machine, ensuring any spillages are cleaned up immediately and generally keeping the area spotless.
"It’s a very easy machine to operate, with a touch screen display for customers to easily view the range of speciality coffees available. Latte is without doubt the most popular coffee, followed by flavoured lattes including vanilla, caramel and salted caramel. Cappuccino is the second most popular option, again followed by flavoured cappuccinos. In terms of size, the most popular is regular. All regular coffees are £2.30 and large £2.60."
Roger says Costa has just introduced a loyalty app where customers simply scan a QR code on his machine to accrue points, which can then be redeemed in Costa stores. "Hopefully in the future, customers will be able to redeem in our store," he says. "We offer a coffee meal deal, where shoppers can purchase either a regular or large coffee and add a sausage roll or bacon & cheese turnover for an additional £1."
While Costa has a huge share of the forecourt coffee market, Nestlé is hoping to shake things up with its new Nescafé Azera pod. Its aim is to offer a convenient high-speed self-serve experience, and Nestlé says the machine ensures product consistency in every cup. The pods are already in Tesco and WH Smith Travel outlets and Nestlé hopes to get them into the wider forecourt market soon.
The pods measure 2452mm high x 900mm wide x 726.50mm deep. Water into the units can be bottle or mains fed, and they also require a two x 13amp electric supply.
Nestlé says that the flexibility of the Azera pod means it can be placed as a stand-alone vending solution, or can be used as part of a larger bespoke branded coffee shop-style space.
They offer a wide range of barista quality coffees made using roasted beans and fresh milk as well as the functionality to include extra shots and syrups, free of charge.
The system runs on a revenue share basis with all consumables except for milk, supplied by Nestlé’s distribution partner.
Meanwhile, Tchibo’s Smokin’ Bean coffee concept continues to be well received in the marketplace. The company is updating its website to include a new testimonial video from satisfied retailers, which can be seen at www.smokinbean.co.uk/retail. Here is some of what they have to say:
Former Forecourt Trader of the Year winner David Charman from Parkfoot Garage in West Malling, Kent, says: "We had been with Tchibo for several years and when we heard about Smokin’ Bean, their new sustainable and ethical coffee-to-go brand, we knew we had to have it.
"It stands for so much more; triple certified coffee, compostable cups and we can offer our customers free flavoured syrup and free espresso shots to offer a stronger coffee. Since upgrading, our bottom line has improved by 70% and has helped increase our total basket spend."
Richard Roberts, MD of Shell garage Trident Honda in Chertsey, Surrey says: "We wanted a new ethical coffee-to-go supplier for our forecourt store. Smokin’ Bean is ahead of the curve, offering a sustainable product and 100% compostable cups. The free installation process was very easy, and we are continuously supported by the quick turnaround of the engineers. Our cup sales data is monitored by the in-built coffee machine telemetry.
"Since installation we are on track to more than double our profit for the year."
Wayne Harrand, head of retail at MPK Garages, says: "As one of the Top 10 independent forecourt groups, we needed a coffee partner that focuses on growing our business as well as theirs. Smokin’ Bean stood out against other brands, it’s sustainable and offers great margins.
"Our customers love it and it shows through the significant sales uplift in our food-to-go sector. Since changing from Costa Express to Smokin Bean, our cup sales have increased by over 60% providing a significant increase in overall sales, coupled with a stronger cash margin."
The Smokin’ Bean units start with the Coffee Point which measures under 1m sq and only 2m high. For more of a ’wow’ factor there is the Single Cafe Destination with a width of 1.6m and height of 2.3m. With this option retailers can add on a snack display to encourage impulse sales. And for retailers who sell more than 80 cups a day, there’s the option of the Double Cafe Destination with two machines.
The Smokin’ Bean website includes a ’calculate your profit’ section so you can see how their solution would work for you.
There’s no doubting the upselling that can be done with coffee-to-go whether it’s a sausage bap at breakfast time or a muffin for that mid-afternoon snack.
Paul Maxwell, marketing manager UK at Aryzta Food Solutions, says the company’s partnership with Seattle’s Best Coffee provides retailers with a range of self-serve solutions that delivers both great-tasting hot drinks and a great customer experience.
"The Seattle’s Best Coffee units provide highly visible branding creating a destination in-store. The innovative self-serve coffee machines feature the latest technology with integrated touch screen devices and fully automated technology to produce consistently high-quality beverages."
The coffee solution integrates two stands to hold both morning products and afternoon sweet treat products such as cookies, muffins and doughnuts, enabling retailers to increase their basket spend and upsell to shoppers while they are waiting for their coffee to pour.
Says Maxwell: "From 2pm onwards, traditional food-to-go and drink-to-go missions begin to slow down, however the treat mission continues to hold up as shoppers look to treat themselves during the afternoon and early evening. Research shows that 42% of in-store bakery shoppers buy due to ’temptation’.
"By positioning a range of counter-top and floor-standing units near to a coffee offering, retailers can generate additional impulse sales."
Iced beverage sales boom
Iced beverage sales grew by 14.3% in 2018 to reach £395m, according to Allegra’s Project Iced UK 2019 report, and they are forecast to reach £449m this year. Project Iced found that over 170 million iced beverages are served in UK cafés every year, but most of this trade occurs during the summer.
The under-30s are the biggest consumers, with 45% of this age group buying an iced beverage every week. The report found that this younger demographic is also more likely to purchase iced beverages outside the core June-August sales window.
Cold brew coffee has been key to ice drinks’ success. Initially limited to innovative specialty cafés, cold brew is now widely available in the UK, with mainstream market potential continuing to grow. Project Iced says that while cold brew sales remain a fraction of hot coffee, growing availability across the UK’s three largest café chains Costa Coffee, Starbucks and Caffè Nero has significantly contributed to cold brew’s broader market penetration.
Another growth area is ready-to-drink (RTD) cold coffee thanks to high profile launches from Costa Coffee, Lavazza and Union Hand Roasted Coffee. These products join a plethora of brands already available including Starbucks, Nestlé, Alpro, Sandows, and Jimmy’s.
Often containing fewer calories and less sugar than blended iced beverages, RTD products can appeal to increasingly health-conscious UK consumers. Half of those surveyed for Project Iced said they would purchase iced beverages more often if they were healthier.
Allegra founder and CEO, Jeffrey Young says: "While more work is needed to widen seasonal demand, a robust and diverse iced beverage offer is essential for operators wishing to remain firmly on the pulse of UK coffee market development."