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Feature: RTD Hot Coffee

Urbanista Cafe and Convenience store Condell Park, Bankstown

The Ready-to-drink (RTD) category within the convenience market has always been a popular one, though its popularity varies from store to store. According to the Australasian Association of Convenience Stores (ACCS) 2017 State of the Industry Report (SOI), the RTD category is the second biggest, generating sales of $1.7 billion in 2017.

The SOI Report stated there was an actual growth of +$40 million, with a margin of 47.9%.

“Hot drinks was the largest growth driving product segment beyond tobacco, having broken into the industry’s top 10 sellers in 2017,” the report said.

“RTD growth, and hot drinks especially, is not being realised equally across retailers with variable performance ranging from mid-single digit declines to double-digit growth.”

“IRI MarketEdge captured a 26% spike in new hot drink SKUs in the last 2 years across scan market accounts, but the YOY acceleration in 2017 was slower (+6%).”

Coffee, as a beverage has seen a boom in recent times, especially in convenience stores where barista-made coffees are becoming less of a rarity and more of a necessity.

According to Convenience Measures Australia (CMA) ,the hot coffee shopper visits 30% more than the average shopper however items purchased percentage is 15% below the average.

“20% of hot coffee shoppers purchase a food-on-the-go item with a bakery snack being the number 1 item,” CMA said.

“The number one reason for purchasing hot coffee from convenience stores is good quality, followed by price.”

Daily Grind

Franke Coffee is a family owned business that has many years of experience within the convenience industry.

Franke Coffee Sales Director Oceania David Downing said the family owned business has: “a very simple philosophy, we thrive on innovative engineering and outstanding design. Not only do we deliver excellent products, but also tailor-made solutions for the complex needs of our customers”.

“We evolve with our clients businesses; everything we do should be and is unique – from the products we develop to the way we deal with our customers, partners, and employees,” Mr Downing said.

Franke offers any variations in fully automatic coffee systems, as well as a semi-automatic system and modular system.

Mr Downing said: “Our key differences aren’t solely based on our range of equipment options, configurations, technology, innovation, but in our ability to immerse ourselves into our clients businesses allowing us to fully understand what makes them tick, the pinch points which impede growth and development of strong coffee programs”.

“We work closely with clients in the development and deployment of workable solutions, for example focusing on either menu development, beverage development, technology to support ‘on the go’ product range etc,” he said.

Within the convenience market, Mr Downing said in Australia, the company has developed various products and systems including under-counter milk bar fridges and deliver systems, tap&go with QR readers which offer expansion of loyalty programs.

“Telemetry is important, it’s the future, we’ve taken our time to get it right, our platform can now download commercial and technical information but importantly we can upload software, profile changes, individual drink profiles and promotional material both imagery and video,” Mr Downing said.

“Our National ‘After Sales’ technical support structure is National, this enables Franke to propose a 100% closed loop solution across any convenience network, we deliver what we say.”

Franke has some exciting innovations including the iQFlow™ and Telemetry.

“iQFlow™ is a disruptive Franke technology that revolutionizes the traditional espresso extraction concept,” said Mr Downing.

“It extracts more flavour under constant pressure throughout the entire extraction time than previous systems. It enables our customers to design their individual taste profile. Each pre-set taste profile is ensured in real time. iQFlow™ opens up the space to create an entirely new coffee experience.

“Telemetry: Developed for fleets across multiple regions, Franke Digital Services provide control and a clear view of all activity and information crucial to profit, in-cup quality and machine uptime.

“There is also the ability to update and configure remotely, reducing the need for on-site visits. This makes your business more agile and responsive, for example when running promotions.”

The Head of Coffee ANZ at Suntory Coffee Steve Wrightson spoke of the brand Mocopan Coffee with C&I: “Mocopan Coffee is a humble brand that’s built its success on developing quality and consistent blends and connecting with its customers”.

Mr Wrightson said he loved working at Mocopan, and the business that was established in 1953 has evolved into one of the industries greatest sleeping giants, quietly fuelling cafés, restaurants, and homes with its traditional range of espresso-based blends.

We are most proud of our customer partnerships we’ve developed, and the team culture we’ve built as a company where an individual can really make a difference.

“We’re proud of what we’ve achieved. The convenience market has exploded in the past five years with customers realising that convenient coffee doesn’t have to equate to a reduced quality,” Mr Wrightson said.

“We’ve tried to create great coffee for our corporate contracts and coffee-on-the-go customers by using our specialty smarts and bringing that into scaled businesses.”

Retailers and their coffee

In April of 2018, 7-Eleven CEO Angus McKay spoke to C&I about the company’s goal to sell 500 coffees per store, per day. Mr McKay said the company sold a lot of coffee, “it is good coffee and it is a good offer”, and the key is to get ahead of demand.

“The core issue for us is actually making sure that stores can cope with that kind of volume. We have some stores that have still only got one machine, and we know the math of what a machine is capable of doing, we know what the customer wants in terms of service expectation which is how long they wait for a cup of coffee,” Mr McKay said.

“Coffee is our religion” is the main sentiment from Eddy Nader, owner of Urbanista.

“At Urbanista, we live and breathe coffee, it’s our religion! Our beliefs were validated when we opened our first Urbanista store in Smeaton Grange back in 2015 and coffee quickly became the core of our offer. Ever since then it has been our core focus and a key driver of our customer service values.

“You see coffee is personal and we need to cater for our customers personal choices. To do this we embarked on a journey of learning with our coffee roaster, Suntory Coffee. A plan was developed to make sure that our offer was not “just” another coffee offer, but an offer that kept customers wanting to come back for more. This meant offering our customers choice, like alternatives to dairy and adopting a menu that would be at home in any high street café. Speaking of milk, we actually offer ten different milk types, the latest being oat milk, which is currently the biggest selling non-dairy coffee milk in the USA and on the rise in Australian cafes.

“Always looking for something new, we launched High Protein Coffee by using The Complete Dairy (Lion) High Protein Milk and it’s been a huge success. We use Parmalat’s Café Crema as our main milk for Coffee and even though it is slightly more expensive than regular white milk, it actually makes the coffee taste smoother and creamier. Having these types of choices for our customers has helped us become recognised as a coffee destination, not just another convenience store that sells coffee.

“We also have the one thing that many regular coffee shop owners don’t, and that is onsite parking, and that is why coffee, moving forward will be a category in convenience that will continue to grow. Years ago, coffee was just a small part of our offer, but now it drives our total offer. I remember when we were worried about what would replace cigarette sales as the category declined… well at Urbanista, we just found another addictive product to sell.”

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Ready to drink (RTD) coffee isn’t just limited to hot beverages; there are plenty of cold coffee offers in the fridges at convenience stores that are also RTD and differ from the average iced coffee beverage.

Luxe Brew offer a 200ml Premium Cold Brew Coffee that is brewed over 24 hours, creating a cold brew coffee that is bright, crisp and bold in flavour in aroma.

Moccona also have a new coffee cold coffee product on offer, Moccona Ice Brew which is a light and refreshing coffee, low in calories with nothing artificial.

The Food Revolution Group has just released a Coffee Kombucha that is produced with a traditional brewing method using real tea. It uses real coffee extract to give the Kombucha the real coffee taste. There are no artificical flavours or preservatives and it is naturally low in sugar.

 

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