We look at the growing link between coffee sales and bakery items
It will come as no surprise that most coffee is drunk in the morning. Indeed, 64% of drinks consumed on-the-go at breakfast time are hot or cold coffees, compared to 44% consumed throughout the day (Lumina Intelligence).
Coffee-to-go is available in all of Shan Navaratnam’s four forecourts (Roade Service Station in Northampton, Paulserpury Service Station in Towcester, Bromham Service Station in Bedford and Priory Service Station in Dunstable). Three sites have Costa Express machines and one has Starbucks.
Cashier at Roade Service Station, Keith Shadbolt says Starbucks is the fastest selling coffee across all sites, but they all do well, selling 100-plus cups a day. “The machines all work well. We hardly ever have problems and if we do, engineers are quick to come out. We have two machines in each shop and in the morning it is really hectic; sometimes there are queues, especially if you get a group of builders getting out of one van.”
Key items with coffee first thing are sausage baps and croissants sourced from Country Choice. The shops open at 6am but they start baking at 5am to ensure they have products ready for when customers arrive.
Says Keith: “It’s all very much under control. We have specific bakery staff who know what they’re doing. They cook the products, label them and then get them out in the shops. We do lots of bakes, little and often, because we offer baps and croissants all day. Every four hours we check to see what else we need.”
Shan’s sites have tempting displays of cakes, croissants and doughnuts right by the coffee machines, which customers find hard to resist.
Goran Raven, from Raven’s Budgens in Abridge, Essex, confirms that pastries sell well with coffee: “Coffee sells bakery and bakery sells coffee – for us it’s all about positioning. You need to make sure the customer has the chance to pick up a bakery item while the coffee is being made. We stopped doing linked promotions as we saw no increase in sales because of them. And we have actually narrowed down our range to the top six sellers and move more volume of them, rather than offering a large variety and selling out constantly of the popular lines.”
Quality is key
“Croissants remain a top sweet bakery breakfast item, accounting for 15% of all breakfast occasions eaten out of home,” confirms Lantmännen Unibake marketing manager, Samantha Winsor.
“Quality is key – 44% of croissant buyers select this as a reason for their choice of establishment. Outlets should stock high-grade products made using real butter, with a light, open texture. Sweet bakery remains as important as ever as an on-the-go snack. Bakery ranks above chocolate and crisps in this sector when it comes to share of occasions.”
She adds: “The bakery and sweet treats category continues to be successful. Total bakery is in 1.2% growth over the past year (Priya). Brunch, lunch and snacks have increased share of bakery occasions, which highlights a clear consumer demand for quick, convenient and affordable sweet solutions when they are out and about.”
The lunch trade is hotting up
Lunchtime trade looks set to grow for retailers like Shan and Goran. “With the focus likely to be on value for at least the next 18 months, retailers are in a strong position,” says Phil Carratt, head of marketing and strategy at Country Choice, citing IGD analysis.
“If they can get their price, offer and format right, by 2027 retailers could more than regain share lost to foodservice operators during the pandemic to claim 23.7% of the food-to-go market (in 2019 that stood at 22.9% and in 2020/21 it was 20%).”
With a new survey by online food ordering app Foodhub declaring the Cheese Toastie as the UK’s favourite sandwich, there couldn’t be a better time for forecourts to start selling them. And that’s what Shan’s four forecourts have all been doing. Cashier Keith says: “We got the Ham & Cheese Toasties in from Country Choice two-to-three weeks ago and they are flying out. And the good thing is that they are so easy to prepare. They come frozen and you just put them in the oven for 20 minutes or so. Our customers love them.”
Four varieties are available: Ham & Cheese; Four Cheese & Onion; Tuna Melt; and BBQ Chicken. Once cooked, they can be displayed in a hot unit for up to four hours. They come in packs of 20 with an rrp of £3.95 per toastie.
Paying more for indulgence
With the economic outlook continuing to darken, the challenges as well as opportunities that retailers are facing continue to multiply. John Want, sales and marketing director at bakery supplier Rich’s, says that the average price of baked goods has increased by 26% over the past year (Rich’s research).
“Inflation is not going away,” he says. “We’re seeing a reset of pricing that will have lasting and permanent effects. This has allowed certain operators to review ranges, offers and pricing hierarchy – with many focusing on those key best sellers that they know will encourage repeat sales.”
Want expects this to drive greater demand for value propositions and trading down in terms of outlet choice. “Our insights show that consumers are happy to pay more for an indulgent treat, which is still seen as a permissible and affordable item,” he continues.
“Reducing or compromising quality to hit a price point in light of inflation is not necessarily what shoppers are looking for – they will pay more for the right indulgence. Looking ahead, out-of-home and convenience retailers need to be ready to meet all price points and indulgence requirements.”