By Frank Beard
ALEXANDRIA, Va. – The April 2017 Category Close-Up in NACS Magazine says that 79% of coffee purchasing decisions originate before the convenience store is in sight, per NACS Convenience Tracking Program data, which reinforces the importance of staying relevant in the minds of customers. Additionally, a recent GasBuddy foot traffic report found that stores with excellent coffee ratings in the app received 12.5% more traffic between 5:00 am and 10:00 am than those with below-average ratings.
But I’ve noticed something else as I’ve traveled to gas stations around the United States. Today’s leading brands and stores aren’t just selling a good cup of joe: they’re directly challenging the coffee shops. They offer amenities like indoor and outdoor seating, artisan drinks such as cold brew and espresso; and in a recent test of iced coffee by Business Insider, the winner wasn’t Starbucks or Dunkin’ Donuts—it was 7-Eleven.
This raises a question: Are convenience stores becoming the new coffee shops? Here are three reasons why I think they might be.
(1) Open and inviting atmosphere.
Although it’s been said that convenience stores are in the business of selling time, many customers want to stay and enjoy a sandwich or salad. Others are looking to meet friends for coffee.
Kum & Go’s new marketplace stores provide that experience. Customers who opt for the indoor seating will find an inviting atmosphere with large windows, polished concrete floors, modern decor, Wi-Fi and wall outlets to charge phones and laptops. For those who choose to sit outside, the roof is extended to provide plenty of shade. Built-in space heaters keep customers warm during cooler seasons.
QuikTrip’s marketplace concept in Midtown Atlanta has a similar approach. Full-service QT Kitchens provide numerous choices for meals and snacks, and customers can enjoy outdoor seating along scenic Peachtree Street.
And whether it’s sharply-dressed business people stopping in for an afternoon snack, a road crew getting their morning coffee, or a group of college students visiting for pizza, the atmosphere at convenience stores is often more lively and diverse than the local coffee shops.
(2) Better food and, yes, coffee options.
It’s no secret that leading convenience stores have made enormous investments in foodservice. From touchscreen-based ordering to fresh, made-to-order menus, customers have a wide variety of options that often exceed the quality and selection found at coffee shops and quick service restaurants.
Convenience stores have also evolved their coffee offerings. During a recent visit to a new Ricker’s location, I encountered self-serve Schaerer machines that grind the beans and deliver a pressure-brewed cup similar to a French press. Elsewhere in the store were Franke machines that produced espresso, lattes and cappuccinos. Both machines use reverse-osmosis.
Similar developments have occurred at other convenience stores across the United States. The Sheetz MTO Market at West Virginia University in Morgantown gives customers access to a dedicated espresso bar. 7-Eleven recently announced a plan to introduce sustainably-produced, single-origin Colombian coffee. Customers in Illinois and Wisconsin can also purchase high-quality Kona blends at Kelley’s Market, which was recently named the top-rated brand for coffee in GasBuddy’s Q2 2017 Report Card.
(3) Destinations for cold brew.
Cold brew coffee is becoming increasingly popular, and Bloomberg reports that sales increased 80% in the 12 months prior to February 2017.
Convenience stores are uniquely positioned to take advantage of this trend. Many of the most innovative cold brew products are produced by packaged beverage companies, and convenience stores have the cooler space to provide them alongside their existing hot and cold-dispensed products.
During a recent visit to the 36 Lyn Refuel Station in Minneapolis, for example, I sampled a can of cold brew from Big Watt Beverage Co., a premium brewer in the Twin Cities. And prior to speaking at Core-Mark’s New England Savings Expo, I was able to enjoy samples of nitrogen-infused cold brew from aptly-named Cold Brewtus, a company that created their own brewing process.
Frank Beard is a regular NACS Daily contributor who has traveled to more than 1,000 convenience stores in 24 states. He raised awareness of the industry's healthful food options with his "30 Days of Gas Station Food" experiment, and he's an analyst/evangelist for convenience store and retail trends at GasBuddy.