Retailers continue to roll out higher-quality coffee in increasingly sophisticated formats

Hip coffee culture is nothing new. Starbucks, Seattle's Best Coffee and Timothy's World Coffee, to mention just a few, have changed the way Americans and others drink the beverage. Convenience store operators recognized the sales and profit potential in a really good cup of joe, and responded with chic in-store coffee bars and high-quality hot beverages.

"People's perspective of service-station coffee has changed," said Dave Tooley, marketing manager of Sacramento, Calif.-based Tooley Oil Co., operator of nine Shell ETD Food Marts. "The demand for higher-quality, better coffee is out there."

Glen Cooper, director of foodservice sales with Eight O'Clock Coffee, agrees. "The bar has been raised in what is offered in c-stores," he said. "Quality has improved dramatically all across the level."

Convenience stores may still have a little work ahead of them in coffee merchandising and marketing, however, according to Conoco Inc.'s hot beverage category manager, David Moser, "The customer is still hesitant to trust the c-store on coffee quality." He continued, "With coffee, [c-stores] have been forced to have a good program." Houston-based Conoco, with 219 stores, works to change customers' preconceived notions about the quality of c-store coffee with its "breakplace" coffee-bar program, dubbed "coffeebreak," which features Folgers coffee and Folgers logoed cups. The coffee is brewed and presented in glass pots. "Because it is brewed every 30 minutes, regardless of whether they are full or not, airpots aren't necessary," said Moser.

Under a canopy featuring the "coffeebreak" logo stands a 48-inch-wide coffee bar, immediately adjacent to the front door, with brewing equipment on one side of the bar, and condiments on the other ? an important part of the "breakplace" coffee program. "If the consumer wants it, we have it," said Moser of all the good things the "breakplace" program offers that can be added to coffee, such as sugar, creamer and flavors. "We have people come to us because of our variety. They can fix their coffee any way they want it."

Refill cards allow customers to buy five cups and get the sixth free. Less popular, according to Moser, is a mug refill program, in which customers buy or bring in a mug and get coffee for 49 cents to 99 cents, depending on the size of the serving. Branded "breakplace" mugs cost from $2.29 to $2.99 depending on sizes, which are 12, 16 and 24 ounces.

In the morning, a store associate is designated to work the "coffeebreak" coffee bar to make sure everything the customers need is available, as well as greet customers and even help pour coffee.

Like Conoco, Alimentation Couche-Tard Inc., Canada's largest operator of convenience stores, is well aware of the power of a well-known name. Having never offered coffee in its central Canada c-stores, the Laval, Quebec-based company invested in the A.L. van Houtte brand ? a popular Quebec institution with some 80-odd cafés scattered throughout the province. The coffee is brewed from single-cup vending machines similar to those found in offices.

"Since we weren't known as a coffee retailer [in that region] we decided to pay a little more for the name," said Frederick Dyotte, foodservice director at the 1,300-plus-store chain. "Our sales have more than tripled in the first year alone since we introduced A.L. van Houtte coffee."

Alimentation Couche-Tard offers a proprietary brand, Sunshine Joe, in half its Toronto-area stores. The black, white and red Sunshine Joe logo appears on everything, including the cups, menu boards, napkins and even the airpots. "The customer is looking for a better cup of coffee," said Dyotte. "We have to offer them more than a regular cup of coffee."

Last September, Alimentation Couche-Tard offered a promotional scratch-and-win loyalty card in its Quebec stores. When a customer bought 10 cups of coffee, they not only got the 11th cup for free, but they gained the opportunity to win a Jeep.

"It was so successful that we are doing it again this year. And we are thinking of offering it in our other regions," said Dyotte.

As any retailer offering coffee knows, keeping it hot and fresh-tasting is an ongoing challenge. Alimentation Couche-Tard copes with the issue by serving the drink from Bunn-O-matic machines with glass pots in high-volume stores, and airpots in low-volume stores, or during low-volume dayparts. The busiest day-part is 6 a.m. to 10 a.m., when coffee is made regularly in glass pots. Once the rush is over, the coffee is moved to airpots, where it can sit for up to three hours. In the morning, the coffee bar is cleaned and stocked every half hour, and coffee is made every 10 minutes, since there are only 10 to 12 cups in a glass pot. Store managers order coffee twice a week.

The self-serve coffee bar features the Sunshine Joe house blend, decaf and flavored coffee, as well as hot chocolate, cappuccino and tea. The Sunshine Joe program has four cup sizes, small for 98 cents, medium for $1.12, large for $1.26 and the Super Joe for $1.40. Refills are available for 98 cents on a large cup. The coffee bars feature sinks for customers who want to clean their mugs for a refill.

The coffee bar is situated in the back of the store against the wall. Dyotte noted that the company tried to place the coffee bar in the center, but chain operators thought it took up too much space. In addition, he said merchandising pastries and muffins in the center of the store was more difficult. "From our point of view, [placement against the wall] is easier for the customers. It is also easier for the store," he said. "The equipment, the water, the menu board, the cups, these are all hard to situate physically in the middle of the store."

In western Canada, Alimentation Couche-Tard co-brands with Seattle's Best Coffee. Like the Sunshine Joe program, the Seattle's Best Coffee logo appears on everything. "We like the micro-market approach to our stores, because people's tastes are so different from coast to coast," said Dyotte.

For Alimentation Couche-Tard, it's the little things that matter. "In Quebec they prefer raw sugar, but we still have to offer regular sugar and substitute sugar as well," said Dyotte. "It is a new reality that we have to offer different things. Even wood stirrers don't cut it anymore. The customer wants the little straw. They sip the coffee through the little straw."

In the Business

Tooley Oil Co. offers Portland, Ore.-based Boyd Coffee Co.'s Coffee House Roaster branded line, which includes the gourmet house blend, decaffeinated and flavored coffees.

Tooley may be in the c-store/petroleum business and not the coffeehouse business, but he and his staff take the beverage very seriously. "With the coffee bar you always have to be prepared," he said. "During the graveyard shift everything must be stocked, cleaned, brewed and ready to go by the morning. And then we need someone to concentrate solely on the coffee bar between the 6 a.m. to 8 a.m. rush when 80 percent of our coffee is sold."

Each of the company's nine Shell ETD Food Marts sell an average of 100 cups a day. A 12-ounce cup costs 99 cents, a 16-ounce cup is $1.09 and a 20-ounce ? the most popular size, bringing in 40 percent of the sales ? costs $1.19. Coffee sales average $3,000 a month per store, accounting for 3 percent to 4 percent of total in-store sales.

The Boyd program includes logo accompaniments such as menu boards, canopies and paper-insulated cups, all with bold graphics. Tooley hesitated a bit over the upscale image presented by the program. "I was afraid that we might lose, say, the construction workers with our bold new graphics, but that hasn't happened at all," he said. The program features Boyd Coffee Co.'s line of Italia D'Oro flavored syrups. "We've been moving away from flavored creams and toward flavored syrups," said Tooley. "Customers prefer them and they seem more upscale, like in a coffeehouse."

Tooley Oil is currently working on expanding its coffee program to include an actual coffee bar with all future store construction. He wants to give 8 to 10 feet to the coffee bar, while currently there is only 5 feet of space for the coffee bar, which is usually placed near the fountain beverage.

In the continuing quest for freshness, the debate over airpots versus glass pots may never be settled. Tooley Oil is in the airpot camp. "With glass or with a large stainless steel urn, the coffee begins to burn and it loses its freshness," noted Tooley. "Airpots are cleaner, safer, with fewer spills and always offer a fresher taste."

Costa Mesa, Calif.-based One Stop Quick Mart's manager, Nemecio Bello, believes his Boyd program gives the store a real competitive edge. "We have been told that we have the best coffee around here ? and there is a Circle K across the street," he said.

One Stop Quick Mart, currently a one-store operation, will roll out the Boyd program into five new stores slated to be built by the end of this year. Bello added, "We have a good reputation. People think Boyd is a good-quality coffee."

The program comprises Boyd's Kona blend, decaf, teas and cappuccino. Boyd supplies equipment such as brewers with timers, and airpots. As part of the package, the roaster sends a delivery person to the store regularly not only to deliver products, but to ensure coffee equipment is calibrated and in good work condition.

The coffee bar for One Stop Quick Mart is situated in the middle of the store facing the front doors "[so that] the customers can smell the coffee as soon as they come in," noted Bello. Airpots are filled every half hour, and the coffee bar is stocked every hour-and-a-half to two hours.

The coffee rush takes place between 5 a.m. and 9:30 a.m. and store associates clean and refill the machines around 10:30 a.m. after the rush has died down. Though One Stop Quick Mart sells cappuccinos and tea, coffee is the most popular hot beverage in the store. This is obvious in the store's inventory. Every other week Bello orders 10 cases of the Kona coffee, but only once a month does he order tea. Cappuccino is ordered in a lesser quantity of four or five cases every other week.

A number of coffee suppliers recognize the potential of coffeehouse-style beverages in convenience stores and have rolled out programs that convey a high-quality, upscale image. For example, Malden, Mass.-based New England Coffee Co. has recently created a program solely for branded convenience store coffee ? Branded Coffee Solutions.

"As foodservice continues to develop, c-stores are realizing that coffee is one of the most profitable areas, and it has the highest loyalty ranking," said Michael Page, c-store division manager for New England Coffee Co.

With New England Coffee Co.'s program, c-stores can build and leverage their own coffee brand. The company helps stores create a custom blend, name the brand, design a logo and merchandise it. New England Coffee Co. also helps design training and support programs for quality control, brewing and customer service. If a store operator simply wants the New England coffee brand, all they have to do is choose from a large range of choices such as dark roasts and flavored blends.

"We don't offer a cookie-cutter deal and we won't quote prices until we go into their stores," explained Page.

Eight O'Clock Coffee, in its famous red bag, has been a part of Midwest and East Coast c-store coffee programs for more than 20 years. The 145-year-old-brand is sold in 4,000 individual stores and small to medium chains.

Eight O'Clock offers a turnkey package to customers including coffee, cups, condiments and, if needed, equipment. It also offers signage, menu boards, pump toppers and classroom training on brewing the perfect cup of coffee. Stores have the option to sell individual cups of coffee, as well as retail beans, and even, bulk coffee to be ground on site.

"In the past coffee was an afterthought, and now it's all about the coffee experience," Cooper said. "I see a trend in upscale c-stores becoming a regular destination for coffee." Over the past two years, the Montvale, N.J.-based company has built 120 upscale coffee cafés in A&P supermarkets nationwide.

The supermarket rollout gave Eight O'Clock Coffee valuable experience in store design, and with that, the company plans to bring the concept into c-stores, offering the same unique design package and the elements of a café to the industry. "Most people who want a branded program want the whole repertoire," said Cooper. "They're willing to pay more money to provide all these things."