Coffee Sales Soar Down Under

At Australia c-stores, the hot beverage is the fastest-growing category for the third consecutive year.

July 06, 2020

MORNINGTON, Victoria, Australia—Coffee continues to heat up at Australia convenience stores, according to the 2019 State of the Industry report from the Australasian Association of Convenience Stores (AACS), Convenience & Impulse Retailing reports. Overall, the hot beverage category, led by coffee, is the fastest-growing category for the third year in a row.

Hot beverages has grown into a more than $300 million category, with purchases in the category represented in more than 70% of all transactions. A well-executed coffee program spurs sales in other categories as well, such as bakery items, fresh food and snacks. The AACS research indicates hot beverage buyers usually stop by 3.7 times per week, with those who like to grab coffee from a c-store doing so every other day.

The morning daypart has the most coffee sales—up to 70% happen prior to 11 a.m. at c-stores. The afternoon also sees a modest boost in sales, too. But convenience stores who do more than simply brew coffee can grow sales even higher. “There is a common misconception that simply putting in a coffee offer will lead to sales,” said Steve O’Shea, Suntory Coffee’s group customer manager. “A lot of investment, hard work and passion is involved to make it a truly successful and sustainable offer.”

One way convenience stores with limited manpower can provide high-quality coffee is through fully automated machines. “Fully automatic self-service coffee machines are highly desired by our convenience store customers due to their high quality, consistency and ease of use: not only for the consumer but also the staff,” said Justin Rejske, managing director of Melitta Professional Coffee Solutions Australia.

Merchandising the coffee area to capture impulse sales of ancillary items also ups basket size. “Don’t overcrowd the area but focus on the real co-purchase opportunities,” Rejske said. “Also think about the travel path from the coffee machine to the cash register, every step along the way presents a sales opportunity.”

To see how coffee sales stacks up in the U.S., read “The Daily Grind Is Good” Category Close-Up in the April 2020 NACS Magazine. And explore what’s new in flavors and equipment in the category in “Not Your Average Joe” in the May 2020 magazine.