Convenience stores are increasingly transitioning their hot dispensed beverage systems to bean-to-cup programs. Reports of double-digit gains in coffee sales and improved margins are commonplace, and some operators say the benefits of the shift to the all-in-one coffee machines outweigh the risks.
“We converted all of our locations to bean-to-cup last year, and our coffee sales are up between 15-17%,” said John Koch, manager and CEO of Rusty Lantern Market, with 26 stores in New England. Hot coffee sales at the chain have increased 15% in the last year, Koch explained, while iced coffee is up 25% or more. Similarly, at TXB stores in Texas, which began transitioning to a bean-to-cup program four years ago, coffee sales have grown at double-digit rates year over year, according to Ben Hoffmeyer, vice president, marketing and merchandising. Moreover, “profitability has also increased as a result of lower coffee waste and repeat customer visits due to improved consistency and freshness,” he said. About a third of TXB’s stores now offer bean-to-cup, with plans to expand the program as the retailer continues to remodel stores.
We’ve received a great response to our bean-to-cup coffee offer.”
At Pilot Travel Centers, the results continue to impress. Pilot began experimenting with the concept of what Jamie King, senior director, food and beverage, describes as “a kind of coffee so fresh, guests saw it brew from start to finish,” a decade ago. “Today, nearly half of total company coffee sales is through our bean-to-cup program,” King reported, “and we see those numbers continue to rise.”
Indeed, bean-to-cup coffee is driving much of the growth in coffee sales today, and it’s gaining share over more traditional systems. “Bean-to-cup coffee programs are on trend,” remarked Brittany Tresemer, marketing director at Franke Coffee Systems Americas, a supplier of automated coffee and espresso machines for foodservice accounts. Bean-to-cup coffee is particularly popular with consumers 40 and younger who, she noted, “drive consumption of the espresso-based beverage category.” The trendy coffee program is seeing even stronger penetration among the under-40 subgroup of those aged 25 to 39.
Customer response to c-store bean-to-cup coffee programs has been positive, retailers reported. While several operators conceded that guests initially encountered a learning curve using the machines, they said adoption is generally quick.
Ryan Fasel, director of marketing at Indiana-based Family Express, which rolled out its bean-to-cup program nearly three years ago, said, “the on-demand availability of additional flavors and added options for iced coffee, combined with the quality and freshness, was well received.” In partnership with Franke, the chain features three brewers at each location that offer 12 hot and 12 iced flavors, along with a fourth machine for Family Express’ proprietary Java Wave European Café espresso program.
The coffee station at a Rusty Lantern Market.
“We’ve received a great response to our bean-to-cup coffee offer,” said Hellyaachwehay Quisquis, owner of Pit Stop Market in Valley Center, California, which installed two Bunn machines upon opening a few years ago. Before the store’s launch, the convenience retailer researched trends for coffee and found that bean-to-cup fit in with its overall offerings. The Bunn machines’ “big touchscreens,” for example, reflect the payment pads featured on the store’s fuel tanks, he noted. “We’re the only ones offering bean-to-cup coffee in town,” Quisquis said. “Customers love how fresh it is.” In fact, the store is considering adding machines to keep up with morning traffic.
Onvo, a 36-unit convenience retailer in Pennsylvania, also researched the emerging dispensed coffee system before testing in 2019. By 2021, the service had been rolled out to all stores, Harman Aulakh, marketing manager, reported. Today, each store features between three to six brewers, with each machine offering three blends. This year, the c-store added a limited-time-only bimonthly flavor, such as Vermont Maple Nut, as well as a bean-to-cup iced coffee program.
“There was a short learning curve when the machines were first introduced, and, admittedly, a handful of customers grumbled about the change,” Rusty Lantern’s Koch said. “But overall, customer response has been very positive.” Each Rusty Lantern store typically offers a combination of seven blends and flavors, all available either hot or iced.
An Increase in Quality
Convenience retailers that offer bean-to-cup programs point to numerous benefits, first and foremost of which is the superior quality of the coffee. “Bean-to-cup provides high quality and unmatched freshness, along with an extensive assortment of flavors,” Fasel said. “We have an offering that can match or exceed any specialty coffee chain, all offered in one-third of the footprint that the same assortment would require in a traditional drip coffee program.” Tresemer adds that consistency in quality can’t be overstated. “Bean-to-cup machines provide c-store operators with high-quality coffee, customization and consistency both in-cup and cup-to-cup at every location,” she said.
Retailers say the self-serve bean-to-cup programs provide great labor savings, which is a huge benefit to the bottom line. “Depending on the time of day, team members could spend a lot of time brewing coffee,” remarked Aulakh. “But with bean-to-cup, that’s largely eliminated, and the only labor that’s needed is daily cleaning and the filling of the bean hoppers.” The systems also aid in reducing waste at each state of preparation, from grinding to brewing, Tresemer noted.
It’s imperative to drive awareness of bean-to-cup programs.
Still, bean-to-cup coffee isn’t free of challenges. Staff and customer training must be factored into the adoption of a system. “Getting coffee from a decanter or glass pot has been institutionalized in the industry for decades,” Family Express’ Fasel said, “so getting the customer acclimated to using the new technology is the biggest challenge, especially when the more traditional options are still available in the market.”
Cost is another issue. “There are steep barriers to entry, such as machine cost and having enough coffee sales to hit financial payback,” remarked TXB’s Hoffman. Rusty Lantern’s Koch agrees. “Total costs for multiple machines at multiple sites, plus the electrical and plumbing considerations, can be expensive,” he said. “But the long-term benefits in increased sales, lower waste and ease of operations provide a payback over time.” Tresemer estimates that the standard investment ranges from $12,000 to $14,000 per machine, but “the benefits of an elevated coffee program far outweigh the initial investment. Our customers have a tremendous upside to their investment in terms of labor savings, better customer experience, increased customer foot traffic and more coffee purchases.”
It’s imperative to drive awareness of bean-to-cup programs to quickly start earning back that steep investment. Onvo, TXB and Family Express place an emphasis on incorporating the service into their loyalty programs. “Bean-to-cup is a major component of our loyalty program,” Fasel reported, with members earning one cent in F.E. Perks fuel rewards for each cup purchased and a free seventh cup after buying six. The convenience retailer also is considering integrating a subscription program for its Java Wave brand into its loyalty program, the executive revealed. Additional examples of bean-to-cup support include Family Express’ billboard program, Rusty Lantern’s price promotions and TXB’s point-of-sale merchandising tactics.
At Family Express, the bean-to-cup options include the retailer’s proprietary Java Wave espresso.
Tresemer advises c-stores to offer discounts, promotions and sampling programs to draw in value-conscious consumers. “Research shows that 57% of consumers believe purchasing coffee from a foodservice location is only a value when they get drinks they can’t make in their own homes,” she remarked. With the demand for fresh bean-to-cup coffee expected to grow, c-stores are excited about the opportunity ahead. Said Aulakh, “When you have a coffee associated with freshness and quality, it helps drive the notion that your store is a quality coffee destination.”