Forecourt Trader - 30 years at the heart of the fuel retailing community

Coffee's steaming ahead

You can't drive anywhere nowadays without seeing a giant Costa coffee cup standing outside a store. The brand's popularity seems to know no bounds as earlier this year Costa was named the 'Nation's Favourite Coffee Shop Brand' for the eighth year in a row. And according to Allegra, the firm behind the survey, this eighth win saw Costa galloping even further ahead of its rivals. As Forecourt Trader went to press, it was announced that Coca-Cola was buying Costa from Whitbread, so it will be interesting to see what plans the global soft drinks giant has for the firm.

Meanwhile, one of the many forecourt retailers who has chosen Costa is Garry Gibson from Jet Cooper Brothers in Newmains, Lanarkshire. He explains: "We had a small coffee machine from a local company before and although it did reasonably well and the drinks were very cheap, we felt that we needed to go for a better-known brand." After speaking to other dealers who had installed Costa units, Garry decided that the market leader was the best choice. "Coffee is a trend that's here to stay on forecourts and we feel that a Costa hot drinks offering helps attract new customers and drive up forecourt footfall.

"We now sell around 1,400 cups every month, which is just over double our sales from the old machine and we've been very impressed with the unit so far. Customer feedback is great."

Garry says he's restricted in terms of the link offers he can run, but has implemented some non-food offers. "Through Jet, for example, we've introduced our own coffee loyalty card so, while stocks last, customers receive a Jet-branded travel mug when they buy five hot drinks."

Of course, Costa is not to every retailer's taste or indeed, consumer's liking, so it's good to see a choice out in the market.

Tchibo offers its To Go self-serve coffee systems as well as its new, more premium Smokin' Bean concept.

Tchibo going well

Mark Dean at Jet Trueman's Heath Filling Station in Wythall, South Birmingham, introduced a Tchibo coffee machine in November last year. Mark explains: "We actually already had a coffee machine but it was a very basic pull-and-go system that was hardly used. We'd been opening the site at 7am on weekdays but I decided to switch to a 6am opening and knew that coffee would attract customers on their way to work. Ours is a very small site and 95% of our customers are from the residential area around us so it was a bit of a gamble.

"I did a lot of research and decided to go with Tchibo as the freshly ground coffee tastes far superior to other leading suppliers. I opted for a large, full cabinet machine that offers a wide range of white coffee, americano, cappuccino, flat white, caffè mocha, caffè latte, hot chocolate and hot water for tea."

Mark says the gamble has definitely paid off: "We've become a 'destination' for people to come and grab a cup of coffee in the mornings. They're not necessarily buying fuel, but almost every coffee customer will pick up something else in store. We've attracted a lot of new customers by offering coffee."

He admits that he didn't think sales would be as good as they are. "We're regularly selling around 20 cups a day during the week," he explains. "Peak times are early morning through to noon. The unit is positioned just as you enter the store and it's well advertised via a 2m poster and a giant coffee cup on the forecourt lawn. I'm yet to decide whether to offer any link deals, but am looking at possibly 'coffee and a croissant' and 'coffee and a chocolate bar' deals."

Mark says that if any dealers are considering introducing a new or better coffee machine they should look at their weekday morning customers first of all as most customers make their coffee at home over the weekend.

"That said, we have 42 stables within a two-mile radius of the site so by making the people there aware of our coffee offering, we sell lots of hot chocolates and cups of tea on Sundays when they finish riding. If dealers can attract local customers at the weekend rather than commuters or transient trade, then it's definitely worth considering introducing a machine."

He also recommends retailers do their research and make sure they taste the different brands' coffees: "If you and your staff don't like it, it's unlikely your customers will!"

Meanwhile, Adam Salvidge from Local Fuels has 12 sites, two of which have Tchibo's new Smokin' Bean concept Newmarket and Lewes, which are opposite each other on the busy A27. He says: "We've been exclusively with Tchibo for a number of years and when we saw the plans for the Smokin' Bean concept we immediately decided we wanted to try it because it was unlike anything else on the coffee-to-go market."

Adam describes Smokin' Bean as a premium coffee shop experience part rustic, part industrial, but very inviting.

Indeed the story behind Smokin' Bean is an interesting one. Paul Chadderton, managing director at Tchibo, explains: "We had a team of interns and young graduates who had to identify gaps in the coffee market and come up with a fresh and exciting concept. "We wanted something more artisanal and more accessible than other coffee offers but it was also important that we protected the planet. The sourcing of fair trade coffee from a co-operative, for example, was really important as well as the 100% biodegradable and compostable cups."

Sustainability was one of the things that sold Adam on Smokin' Bean: "The sustainability side of Smokin' Bean made a lot of sense to me, especially the fact that the cups are 100% compostable and the coffee is triple certified (Rainforest Alliance, Fair Trade and organic). If you try it you can definitely taste the difference.

"There is a very slight price premium but people who care about quality and sustainability don't mind paying that." However, included in that premium price is a free shot of espresso or syrup so consumers get the chance to personalise their drink.

Adam says it is going 'fantastically well'. "Our Newmarket site is a new-to-industry site and sales from Smokin' Bean were tremendous straight away. At Lewes we had had Tchibo self-serve but when we switched to Smokin' Bean, we saw a 20-30% increase in cup sales." They currently operate a loyalty card, which is very popular and are planning on launching a hot meal deal.

Adam has gone for Tchibo's profit share model and is very happy with that. "Margins are better for us and because of the premium pricing we benefit from that too."

Chadderton says with Tchibo there is no outlay from the retailer, the concept has free installation so retailers start earning profits immediately and those profits can be as much as 60%.

When it comes to which of Tchibo's concepts would suit a particular site, rigorous site assessments are made looking at space available, store profile and which offer would best suit the retailer and their customers.

Tchibo To Go is in around 800 outlets while Smokin' Bean is currently in 37 locations. Chadderton says there's been a lot of interest in it but he's keen to make sure it goes in the right locations, which explains the assessment process.

Tchibo Gourmet takes up 600mm x 700mm space whereas Smokin' Bean requires just under one square metre. Smokin' Bean is a modular unit so retailers can have one machine or add a food unit or add a second machine whichever suits their operation. And Tchibo can provide a full range of snacks for the food unit, all of which go well with coffee.

All that's needed is a three-pin plug socket and water connection; there's no need for drainage. Chadderton says it's very simple to get up and running and staff get training on the day of installation.

A full range of pos is available to promote Smokin' Bean and Chadderton says promoting it on the pole sign always works well. Large wooden chalk A-boards are also available. And he's keen to promote the free add-ons: "We want customers to have that extra shot or that syrup so we actively promote this. It's all about enhancing the consumer experience," says Chadderton.


The low maintenance option

Lauren Tyler, marketing manager at eXpresso Plus, says that if you don't have the space or resource to build your own coffee shop, partnering with a coffee specialist can be a low maintenance option to creating your own self-serve machine.
"eXpresso Plus is a national coffee-to-go provider specialising in off-the-shelf and bespoke solutions, and is a particularly good choice if you want to introduce a high-quality brand into your store. We work with Lavazza, Nescafé and PG Tips to provide a choice that no other coffee-to-go providers can."
Tyler says that with the eXpresso Plus model, you lease or purchase the machines and keep all profits yourself, meaning for every cup you sell you keep 100% of the income. "Using our commercial calculator, you could earn as much as 65% net profit per year (based on a Lavazza Eleganza model). And as well as providing solutions for high footfall sites, our machines cater for those selling as little as eight cups a day, whether that's through the Nescafé&GO or Lavazza Prontissimo Nano."
Although all of eXpresso Plus's coffee solutions serve tea, the company can also provide PG Tips' PG2Go machines, ideal for those forecourts that may already have a coffee machine in place that doesn't serve tea.
Rob Malek, managing director of Roundswell Services, has seen his tea sales increase since installing a dedicated machine. "A quality branded hot drinks offering is critical to make our site a destination stop, for both distance drivers and the local commuter, encouraging incremental spend," he explains.


Coffee cup storm dying down

There's been a lot of publicity about disposable coffee cups and the fact that many of them are difficult to recycle. However, the big coffee brands are keen to do their bit for the environment and are looking at solutions. Following a successful year-long trial with some of the UK's largest users of paper coffee cups (Costa, Starbucks, McDonald's and Caffè Nero) waste management firm Veolia has set a target to collect 120 million coffee cups for recycling in 2019, which is a 300% increase on this year.
The main challenge to date has been the plastic film lining the paper cups, which means they are rarely recyclable.
In 2017, Veolia started rolling out special recycling bins to help with the emptying, stacking and collection of paper cups to be sent for recycling. In this system, coffee cups are segregated in store to prevent contamination, ensuring a smoother, more effective process. Veolia is already supporting Costa on its cup-recycling programme that aims to recycle as many disposable cups as it sells by 2020.
Meanwhile Starbucks has announced that it is testing a 5p paper cup charge across all 950 of its stores in Britain, following a three-month trial in London. The charge will see all stores add 5p on to the cost of any drink purchased in a paper cup in a bid to further encourage customers to bring in a reusable cup.  Customers using reusable cups already receive a 25p discount off any Starbucks drink, aimed at reducing paper cup waste. In addition, Starbucks has announced plans to eliminate single-use plastic straws globally by 2020, making a new Starbucks straw-less lid standard on all iced coffee, tea and espresso beverages.
At Applegreen, the company is switching to using a fully recyclable paper cup across its estate. It is using the reCUP recyclable paper cup, which is made by CupPrint. The cups use EarthCoating, a fully recyclable lining engineered to be processed easily through traditional paper recycling equipment.
Finally, Tchibo's new Smokin' Bean concept makes much of its sustainability credentials, which include the use of 100% compostable cups. Managing director Paul Chadderton says: "We put one of our cups in the ground for 10 weeks along with some other brands of cups. After 10 weeks, there was hardly anything left of ours but others were still in tact."

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Weekly retail fuel prices: 20 May 2019
RegionDieselLPGSuper ULUL
East135.9360.77140.55130.16
East Midlands135.28141.26129.82
London135.21142.69130.48
North East134.06140.71129.20
North West134.87139.96129.27
Northern Ireland131.95135.90127.71
Scotland135.09139.31129.71
South East135.9463.57142.34130.70
South West135.01139.53129.65
Wales134.52138.23128.74
West Midlands134.83141.89129.64
Yorkshire & Humber134.1257.70141.27129.10

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