The UK’s love affair with coffee shows no sign of cooling down. Indeed, according to Mintel data, the UK’s coffee shop market has grown by 37% since 2011, rising from £2.4bn to £3.4bn. However, despite the perceived dominance of specialist coffee retailers, as many as 44% of Brits buy their hot drinks from non-specialists. In fact, 53% of people surveyed by Nestlé Professional buy coffee-to-go, with 23% buying it from forecourts and 19% from convenience stores.
Simon Baggaley, category manager at Nestlé Professional, believes the new ’hyper-convenience’ trend is having a great influence on the coffee-to-go market and where consumers buy their drinks from.
He describes ’hyper-convenience’, in part, as being able to access our favourite food and drink anywhere, any time, at the swipe of a screen or the touch of a button. He explains: "In today’s 24/7 culture, fast-paced technologies such as take-away apps, touchscreen vending, smart ordering and contactless payment are driving a convenience revolution that is changing the way we eat and drink. Coffee-to-go is just a small part of the hyper-convenience trend, but one that presents forecourts with a big opportunity. To stay relevant, products and services must seamlessly fit into people’s busy and complex lives and provide a consumer experience that is straightforward and fuss-free."
Baggaley says the latest generation of coffee machines mean coffee is no longer just the preserve of the coffee shop. "Barista-style drinks can now be achieved at the touch of a self-service button, which allows forecourts to capitalise on the demands of the hyper-convenient consumer without needing to continuously invest in staff or training costs.
"Our research shows that consumers feel quality (33%) and taste (30%) are among the most important factors when it comes to on-the-go coffee, both of which are easily delivered with the right machine. What’s more, nearly half of people surveyed look to customise their coffee, with over a third (36%) choosing a skinny variant. So, considering which machine will suit your customers and site is key. With the right technology, non-specialist venues that offer takeaway barista-style coffee can grab a cup of the coffee market. As convenience becomes the deciding factor, the market will continue to face intense competition from retailers, bakery shops and forecourts, which are now competing in terms of price, and even geographical reach."
Costa Express has, of course, been a massive success in forecourt stores, bringing the coffee chain’s renowned quality to consumers nationwide at the push of a button. However, not every site is right for the concept, and not every forecourt retailer wants the Costa brand. Some, like Nick Baker of NJB Services (five Jet forecourts in the North East), want something a little different. Nick launched Cheeky Café coffee, a blend developed for him by an independent artisan coffee roasting company to provide a unique, delicious taste. Mostly based on African coffees, it is designed to please a broad customer base while offering a taste profile that is a little different from the norm. The blend is a rich mixture of predominantly Kenyan, Ethiopian and Ugandan coffee, supported by some premium Java and Brazilian origins. The taste profile is sweet with a little citrus zing and a deep mocha/choc hit.
Cheeky Café coffee is now available in all five of Nick’s Jet forecourts, with each site having its own customised bean-to-cup coffee machine to fit the available space. In two of his stores Abbeyside and Newton Park Nick has also introduced Cheeky Café seated areas, which are proving extremely popular.
Nick says: "The days of forecourts only offering vending machine instant coffee or basic coffee pods are long gone. The world has moved on to bean-to-cup units from high profile big- coffee brands offering customers more choice than ever before. We’ve reached the point where there is almost an expectation (among consumers) that forecourts will offer a selection of high-quality hot drinks day and night. What was once a ’nice to have’ has now become a ’need to have’ essential component of the modern forecourt shop.
"My Cheeky Café coffee has really taken off in a big way and has certainly exceeded my expectations. It was always a risk to introduce my own coffee brand when there are a number of really big brands that consumers expect to see on a forecourt, but it was a risk worth taking.
"The machines offer cappuccino, latte, espresso, flat white, mocha and hot chocolate. Each site also has a Cheeky Cha tea machine with Yorkshire tea and in the Newton Park and Abbeyside cafés I’ve also introduced a Cheeky Café barista coffee machine.
"For me the most important factor for success is the positions of the machines in the store. All of my coffee machines are in prime position in the customer flow towards the tills. Customers don’t have to look for the coffee they can’t miss it! Just a few years ago coffee was a destination within forecourt shops, but now it’s so mainstream that it’s all about visibility and impulse purchases."
Pricing is also key and the Cheeky Café hot drinks are very competitively priced compared to other high street coffee chains at £2.20 per cup for a regular and £2.40 for a large. There is also a Cheeky Café loyalty scheme where customers buy five drinks and get the sixth free. Nick says this is proving popular across all five sites.
"Coffee is without doubt a footfall driver, particularly at certain points in the day when customers are coming in-store specifically to pick up a coffee. And it’s not always the fuel customers who are picking up a hot drink with their fuel. Some of my sites have quite a lot of walk-in customers who come in just to grab a coffee on their walk to work or lunch break," explains Nick.
He says sales are really good. "If I take Abbeyside as an example (we re-opened in April after a complete knock-down and rebuild), we’re currently selling 600 cups per week, which equates to £70,000 per year at a profit of 200%. Hot drink sales at Abbeyside equate to 5% of total shop sales and with its Cheeky Café now up and running I anticipate it will add a further £50-£70,000 of hot drink sales annually."
Stuart Cufflin, transport and retail contracts manager at Jet, echoes Nick’s comments when he says that in the past, customers would not have had high expectations of the hot drinks options available at forecourts. He continues: "But that’s all changing as savvy forecourt operators up their game in recognition of the vast commercial opportunities that hot drinks present.
"According to the Association of Convenience Store’s ’Forecourt Report 2016’, 70% of forecourts now have a coffee machine."
Consumer demand for high- quality coffee prompted Jet to join forces with Expresso Plus in 2015 to introduce a coffee-to-go initiative for dealers.
"Our dealers can opt for a Lavazza or Nescafé Expresso Plus coffee machine, both of which serve up espresso-style speciality drinks and fresh leaf tea a British favourite. When dealers sign up, they automatically receive £2,000-worth of free drinks," says Cufflin.
He adds that a number of Jet dealers have successfully introduced their own hot drinks loyalty cards, which prompted the oil company to include a hot drinks promotion in its first Marketing in a Box initiative, which ran in 2015.
"Marketing in a Box is a different style of promotion which aims to provide dealers with choice and freedom. Dealers choose from a selection of promotions to fit with their own marketing activity.
"Due to the popularity and success of the hot drinks promotion first time around, we’ve included it again in our latest Marketing in a Box initiative. The concept is simple customers pick up a hot drinks loyalty card in participating Jet forecourts and receive one stamp for every hot drinks purchase. Once they have collected six stamps they receive a free handy travel mug. Our aim is to drive forecourt footfall, encourage additional shop sales to complement the hot drinks, and build long-term loyalty by creating new habits among daily commuters and commercial vehicle drivers."
Jim Funnell, owner of Jet Houghton in Leicester, installed a new coffee machine just over a year ago and when Jet announced the range of promotion packages, he opted for the hot drinks one as he thought it would help push sales. "Jet gives you the flexibility to start the promotion at a time that suits you so we started it on July 12 and it’ll run it for a total of 12 weeks.
"So far, our customers have been very positive about the initiative and are looking forward to being rewarded for their loyalty with a free insulated cup. We’ve definitely noticed some customers coming in specifically for another drink to fill up their loyalty card.
"Coffee, and hot drinks in general, are an important part of our forecourt offering as customers are aware of the dangers of fatigue when driving and will specifically stop to rest and refuel at a site they know sells a good quality product."
Caffia Coffee Group says the Franke A600 Self-Serve Bean-to-Cup machine is ideal for forecourt stores. It has an intuitive touchscreen for drink selection, which is much like an iPad, where consumers can choose a flat white, cappuccino, caffe latte, americano or espresso from beans and fresh milk. It also offers hot chocolate, mocha and latte machiatto.
It’s an advanced Swiss-made coffee system, which needs only a three-pin socket (plus one for milk fridge). It suits medium-to-heavy use sites serving 150-200 cups per day.
Jack’s Beans - now available across 61 forecourt stores
Jack’s Beans is available across the UK, from Glasgow to Penzance, across 363 stores of which 61 are forecourts.
Freda Cronk, head of brand and marketing at brand owner Connect, says a Network Support team visits all Jack’s Beans coffee shops regularly and the feedback they receive is that retailers are proud to have the machines in their stores: "They’re seen as high quality and easy to maintain. They also comment on how they like to get to know their ’coffee regulars’.
"What sets Jack’s Beans apart is the fact that we are a home-grown, quality UK brand with a focus on supporting local UK shopkeepers. We use only Fairtrade coffee which we buy direct and which supports growers. We call this our ’social democracy’. This, as well as our highly competitive commercial terms and great tasting coffee at a great price, is what makes us an attractive prospect for retailers."
Supporting this, Jack’s Beans uses only top- quality, high-tech spec machines which are the smallest full bean-to-cup coffee towers available. Their space-saving design is just 0.5m wide, 2.3m in height and 0.8m depth.
"Currently, some of our retailers, especially forecourts, are selling 15-45 cups per day as part of multiple purchases," says Cronk.
"Jack’s Beans coffee tower is a definite attraction and the retailer benefits from a broader sale at the till, especially bakery items. In addition, consumers from our recent survey called our freshly ground, barista-style coffee, great value coffee at £2 (cheaper than other brands) and a great taste which is on a par with other global brands."
Offering an easy hot and cold drinks solution
Denby Drinks Company is now offering forecourt convenience stores a range that includes Ciao Coffee and Mr Slush machines. The company reports that symbol group stores already using these machines have seen a huge increase in beverage sales as a result.
Steve Roy, managing director of Denby Drinks Company, says retailers who are selling just 19 drinks each day are generating additional annual profits in the region of £10,000 and, importantly, retailers retain all of their profits.
With the Ciao Coffee Serving Station, customers enjoy a high-quality, premium bean-to-cup drink made from fresh coffee beans, chocolate powder and 100% freeze-dried milk. No fresh milk is required, making it an easy-to-maintain solution.
Customers can choose from an award-winning range of coffee blends, including Fair Trade and Organic. Roy says there is the opportunity to make 88% profit on return.
Retailers can lease the machine for £5.75 plus VAT a day. Roy says it pays for itself when you sell just four coffees a day. And selling 19 coffees each day will generate annual profits of £8,500-£10,000.
With the Mr Slush machine, there are 36 flavours ranging from traditional-style slush to sugar-free, 99% fruit and slush cocktails. And profit on return can be as much as 86%. You can lease this for as little as £2.71 a day and Roy says this pays for itself when you sell just three Slush drinks a day.
A towering success
Lauren Tyler, marketing manager at Expresso Plus, says that although her company recognises that having a coffee shop offer in a forecourt is a growing trend and is something they cater for by providing pop-up coffee shop bars or coffee corners, they also understand that this isn’t possible for all sites. "That’s when our coffee-to-go towers are ideal," she explains.
"Our range of coffee towers are under one metre square, taking up very little space, while still providing the coffee shop menu a customer would expect, from lattes and cappuccinos to fresh leaf tea. It allows forecourts to offer a facility to customers to enjoy on a break, but without taking up copious amounts of space."
The Lavazza Eleganza, for example, offers a coffee-shop experience with none of the hassle.
Ringing the changes at The Purdy Lodge
The Purdy Lodge in Belford has invested in a state-of-the art, bespoke coffee tower fitted with the latest La Cimbali bean-to-cup coffee machine. Specified and stocked by tea and coffee experts Ringtons, the machine has been installed to meet demand for top-quality coffees and teas on-the-go and to allow for sales growth. Since installation, The Purdy Lodge owners have seen an 18% year-on-year growth in their hot beverages sales, with a similar footfall to the previous year.
Paul Hodgson, service engineer at Ringtons, says: "When it became evident the forecourt’s existing coffee tower was not performing, we worked to design, specify, install and supply a purpose-built coffee tower featuring a high-tech bean-to-cup coffee machine. The tower’s machine grinds quality coffee beans to order and uses fresh milk to ensure a premium beverage the fact sales have increased by almost 20% since installation is testament to the fact the facility was worth investing in."