Earlier this year, Top 50 Indie the Chartman Group was named as the first independent retailer to install three Costa Express machines at one of its sites. And on the day the third machine was installed at the company’s Winning Post site just outside Exeter, the three machines served 350 cups in total.
Costa is so popular that it already has over 4,000 Express machines on sites across the UK and that number just keeps on growing. But what’s the criteria for getting your hands on one of these sought after bits of kit?
Murray McGowan, managing director of Costa Express, says it varies: "We look at the size of the shop, sales, footfall and the other products the retailer sells but there are no hard and fast rules. We are looking for sites with high sandwich and hot food sales and those with a free-to-use ATM are favoured."
The standard machine takes up just one square metre of space. The retailer has to provide this space plus the fresh milk Costa provides everything else. And the deal works on a revenue share basis. The big selling point is that the coffee from an Express machine is the same as customers would get from a high street Costa outlet. "The same coffee beans are used with fresh milk so customers are guaranteed quality," says McGowan.
Putting machines out in the market on the scale that Costa has could be seen as a risk, perhaps damaging the brand name if retailers and their staff are not disciplined enough to keep them working at all times, however Costa has that covered.
"We remotely monitor the machines so we can tell if they’re not working. We can then phone a site and say you need to top up the milk or we can see that there’s a mechanical issue and send someone out," says McGowan, adding that the in-service rate of all the machines at any one time is above 99%.
He says it’s a good idea for retailers to nominate a ’coffee champion’ who can be responsible for the machine.
And as well as remote monitoring, there are visits from Costa personnel: "Someone from our Brand Excellence team will visit sites once a year while one of our field engineers will visit once a month to ensure everything is working as it should."
McGowan says the best place for an Express machine is in a high footfall area within eye-shot of customers entering the shop.
But before they’ve got inside, it’s important to use the pos that’s provided to show you have a machine the giant Costa cup is often a particularly welcome sight for weary drivers.
He says a recent sales initiative is for retailers to have empty cups by the till for anyone who has missed the Costa machine on their walk through the shop. "Till staff can then ask if customers would like a hot drink and this can really drive sales growth."
Some machines take the money but most are pay at the till. McGowan says this is not a problem: "The cups are quite big so staff can see when customers have them and most people will take a drink and then pay at the till."
Retail price is the same across the vast majority of sites the only exception is motorway service stations, where prices are likely to be higher.
Costa has a loyalty card but it cannot be used in conjunction with Express; McGowan says they are looking into that. "What forecourts can do though, is operate schemes where you buy five coffees and get the sixth free or do a bundle deal where you get coffee and a breakfast roll or a croissant for a price. Water sells very well with coffee so a deal on that is worth considering too."
Some operators, such as the Chartman Group, are so successful with Costa that they need more machines to keep up with demand. "If you’re serving north of 100 cups a day, then an extra machine could unlock additional sales,’’ says McGowan.
Most of the machines in circulation at the moment don’t offer tea but Costa does have a newer one, which not only offers tea but also syrups so consumers can enhance their coffee.
And McGowan’s confident there will be more and more Express machines across the UK: "Coffee shop culture is now part of UK life and self-serve has grown off the back of that. There’s a lot of headroom for growth in the UK and we’re excited about what we can deliver."
Obviously Costa Express is not the only offer on the market. In 2012 Westomatic developed the Sigma Touch, described as the first standalone vending machine with a touch screen and this year the firm has upped its game by developing a coffee kiosk that it says will rival any Costa Express.
The coffee is made from Douwe Egberts’ espresso beans. Tony Smith, national sales manager for Douwe Egberts’ owner JDE Professional, says the unit can offer the optimum quality espresso shot that, combined with milk granules and served in an insulated paper cup, would easily sell for £2 or more and compete in quality terms with any high street coffee operator.
The stylish black machine features a 19-inch fully interactive HD touchscreen, sugar and stirrer compartments and sipper lid holders. And, as well as coffee, it also offers three syrup shot options and three tea choices.
Meanwhile, motorists visiting the 24-hour Magor Services at J23 and J33 of the M4 are making the most of the 100% Arabica coffee being served from the five Tchibo To Go systems. Since being purchased by Rontec in 2014, and partnering with Tchibo, the sites are averaging an impressive 365 cup sales per day.
At J23, two Tchibo To Go systems were initially installed but this was quickly increased to three because of customer demand. Jane Broomfield, category manager at Rontec, explains: "Initially we had two of the Piccolo systems installed but it soon became apparent during busy periods that to keep queuing to a minimum we’d need another machine and we haven’t looked back."
Prominent signage is displayed on site and Tchibo encourages retailers to run dual branded promotions with food-to-go items. "At Tchibo, we understand the importance of building a partnership with retailers and work with them to not only to increase their coffee sales but their overall basket spend." says Peter Brooks, head of concepts at the company.
Further south, a Budgens forecourt located between Shepton Mallet and Yeovil installed the Expresso Plus Lavazza machine in September 2014 and hasn’t looked back. Its installation means customers can enjoy a wide range of hot drinks including coffee, tea, soup and hot chocolate.
Owner Tom Taylor, comments: "We chose Expresso Plus as Lavazza has a reputation for high quality coffee and offered a viable alternative to the Costa brand. The machine gave us the flexibility to offer customers a wide range of other hot beverages including tea and soup. Ninety-nine per cent of feedback from customers has been excellent.
"If you’re a convenience store and forecourt you have to have a coffee machine customers expect to find one and it is a great driver of other in-store purchases," Tom continues.
"When you’re trying to run a business you want as little aggravation as possible, Expresso Plus has so far provided an excellent service and it genuinely feels like a partnership rather than a retailer/supplier relationship."
Expresso Plus managing director, Manish Shah, adds: "It’s great to hear that Tom is reaping the benefits of the Lavazza machine. With the coffee and hot drinks market growing so rapidly, it’s so important for businesses to be able to offer a quality product to customers."
Earlier this year, Expresso Plus launched the Lavazza Eleganza hot beverage tower machine. This offers a range of hot drinks including fresh leaf tea, hot chocolate and a variety of bean-to-cup coffees. Customers can also customise their drinks with flavoured syrups and they can even specify the strength of their tea.
Shah says retailers have to sell just nine drinks a day to break even under the company’s leasing scheme.
The Eleganza also gives retailers the opportunity to display advertising on the 19-inch screen imbedded in the machine. This can include any drink and food to go offers, in-store deals and any other promotions the store wishes to highlight. This function can be controlled by the retailer via their central computer.
As well as Lavazza, Expresso Plus offers Nestlé branded machines. "Lavazza is our more premium offer," says Shah, "where shoppers will be happy to pay £1.50 to £2 for a cup. But you might be trading in area where people aren’t prepared to pay that for a coffee, in which case our Nescafé Gold Blend or Alegria machine might be better for you."
He says which one is right for you depends on your location. Lavazza is massive in Italy and known to more discerning drinkers here but Nescafé is popular globally and may resonate better with your shoppers. So wherever your location and whatever your customer base, you should be able to find a coffee solution to suit your business.
PG TIPS Tea-to-go
Not everybody likes coffee some people prefer to stick to good old tea. If you want to offer your customers a decent cuppa then Expresso Plus has the solution with its PG2Go machine which uses PG Tips tea.
Expresso Plus managing director, Manish Shah, comments: "Tea is personal. People like to make their tea exactly how they want it and with PG2Go they can make it to their own specification."
For many consumers, PG is synonymous with tea so having a PG Tips-branded machine in your store is bound to be a winner. Shah reckons it looks great standing next to a Costa Express machine, especially as most of the Express machines currently on the market don’t offer tea. The self-contained unit has pockets to store the tea bags, sugar sticks, stirrers, cups and lids. And, as well as standard tea, there’s the option to offer herbal varieties too.
You can buy or lease the machine and Expresso Plus supplies the consumables and pos. If you order by 2pm, you’re guaranteed next day delivery.
Who’s buying what?
According to research firm him!, 52% of forecourt retailers see hot drinks-to-go as a main driver of footfall to their store. But what do shoppers think?
Him! interviewed 20,000 shoppers for its Convenience Tracking Programme 2015 and found:
5% of shoppers will buy a hot drink-to-go at a symbol forecourt a figure that’s risen from just 1% in 2012 and looks likely to grow further
7% will buy a hot drink from an oil company branded forecourt
22% of shoppers had bought hot drinks from an oil company forecourt in the previous three months versus just 8% from a symbol forecourt.
Hot drink shoppers are slightly younger than the average convenience shopper 34% are under 35 years
They are more likely to be male 60% versus the 44% average
They’re also more likely to be ABC1 and working full time
10% are in store to buy breakfast; 18% to buy lunch; and 38% specifically to buy a drink-to-go
70% of shoppers who buy a hot drink-to-go will also buy other products with confectionery, hot food-to-go, sandwiches, soft drinks, tobacco and bread the top categories.