Operators Increase Beverage Sales With The Right Product Mix

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Whether they come from the cooler, the fountain or the coffee bar, beverages make up a significant portion of travel plaza and truckstop sales. Stocking the right mix and the latest offerings not only keeps customers happy, it also increases sales. To ensure they have desirable products, operators can monitor traffic patterns, get to know their customers and stay current on the latest trends.

Understanding The Consumer
Darren Schulte, NATSO vice president of membership, said the key to determining any beverage offering is for operators to know exactly who is passing through the doors each day.

“You might have four truckstops on a corner and every single one of them might have different customers,” he said, adding that one location may skew more to owner operators while another attracts company drivers or a greater number of passenger vehicles. “Just because someone across the street is doing something different than you, it doesn’t mean it is the right thing for you.” 

To get to know their customers, operators can spend time on the floor talking with shoppers. “The obvious customer is the truck driver, but who are the non-obvious customers? Take time to ask them a question. You can get some feedback and start drawing some assumptions that can assist you in determining if you should expand a particular product, category or fixture, like your coolers,” Schulte said.

Perfecting The Coffee Bar
Coffee remains a staple for both the travel plaza community and the nation. The National Coffee Association reported that American coffee consumption continues to increase with 83 percent of the U.S. adult population now drinking it, a five-point uptick compared with last year. What’s more, a growing number of coffee consumers have sophisticated taste.

“The coffeehouse has taught a generation that there are better coffee choices and now with the preeminence of quick-service-restaurant coffee, that coffee has gotten really good and lower grade coffee is no longer acceptable,” said John Buckner, a spokesman for NATSO Chairman’s Circle member S&D Coffee

The National Coffee Association’s latest trend report showed that nearly one in three consumers drink gourmet coffee, and older Americans are drinking more coffee. The coffee association said daily consumption of coffee among those 60-plus rose to 76 percent, up from 71 percent in 2012, and daily consumption for those 40 to 59 rose to 69 percent, up from 65 percent last year. 

Ericka Schapekahm, director of human resources and special projects, Coffee Cup Fuel Stops and Convenience Stores, Inc., said she is seeing a demand for premium coffee, and the company’s addition of a Caribou Coffee self-serve kiosk to one location has created a coffeehouse experience for customers. “Caribou is strategically located at the front of the stores and the sound, smell and look of premium coffee is the first thing the guest experiences as they enter,” Schapekahm said. “The coffee and bean smell drifts outside as well and creates a great smell it/sell it moment at the gas islands.”

Even better, the coffee additions have resulted in regular guests. Schapekahm said their Vermillion, S.D., location is a 14-mile round trip for residents of the town, so the company wanted to find something to bring them out more regularly. “What we have found is that offering a premium coffee, and creating an area for them to sit and study or have a meeting, has made them change their coffee drinking habits—them coming all the way out here—and travel habits by making sure they get their coffee and gas on the way out of town,” she said.

Tricia Howell, store manager for Truck N Travel TA, Eugene, Ore., said her coffee area has grown and become more sophisticated. “Coffee is cool and there is a lot you can do with it now. You can get a better cup of coffee, better coffee brews and flavored creams,” she said.

Knowing who is drinking what can help operators determine the ideal offerings. “The important thing here is to get the assortment right,” Buckner said, adding that suppliers can help with category analysis. S&D Coffee provides analysis based on zip codes because people in different regions have different tastes.

Consumers, particularly women, are favoring flavored coffees, Buckner said, citing pumpkin, French vanilla, hazelnut and mochas as the top coffee flavors.

When it comes to younger consumers, iced coffee and iced-blended coffee drinks are popular. Buckner said, “People want to increasingly enjoy iced coffee not only in the morning but also as a pick-me-up at snack time in the afternoon.”

Buckner added that sometimes millenials start drinking iced coffees before becoming habitual, hot coffee drinkers in the morning. Offering iced drinks is easier than ever, he added. “You’ll see the iced dispensing equipment has gotten better so the quality is better and can be self-served by the customer,” he said.

The National Coffee Association reported that consumers age 18 to 39 consume more espresso-based beverages than other age groups, and Hispanic Americans exhibit stronger consumption habits than other groups.

Buckner recommends operators show an assortment in the coffee area. “You need to have a variety of coffees for different demographics and the different needs in a truckstop,” he said. “You may want to offer an assortment with as many as six coffees. Each of the items needs to have a purpose.”

For example, some people are looking for a functional coffee because they need to wake up. “They need an extra caffeinated coffee. We have one called Juva Roast, and the energy doesn’t come from extra caffeine, it comes from antioxidants and cellular availability,” he explained.

Mark Russell, director of operations at Russell’s Travel Center, Glen Rio, N.M., has a four-unit coffee dispenser and offers three varieties—an extreme caffeinated blend, a dark roast and the house blend. “Our house blend sells so well we have two of them that we have to keep going all the time,” he said, adding that he plans to add a self-serve cappuccino machine.

A multi-nozzle cappuccino machine can offer a variety of flavor options. “Those seem to be very, very successful,” Schulte said, adding that the newer machines don’t seem to require a tremendous amount of labor for upkeep as long as manufactures’ cleaning instructions are followed.

Eco Travel Plaza, Crossville, Tenn., has had success with its self-serve Concordia machine that allows customers to make coffeehouse-style espressos, lattes, cappuccinos and mochas, said Chris Smith, general manager of the location.

Russell offers bulk cream and half-and-half and has installed a bulk dispenser with eight different sweeteners and powdered creamers. The dispenser offers a wide variety of options while also cutting costs. “We did that because customers, especially drivers, would come by and grab a handful of the packets. It gets expensive,” he said. 

Schulte said, “The locations that carry a wide variety of coffees that meet their customer’s needs in a very small but shopper friendly area seem to be the ones that are very successful.”

Locations that add a premium coffee should take time to train their team so they learn to love and sell the drinks, Schapekahm said. “With this emphasis, we’ve even converted our most hardened ‘cup of mud’ loving professional drivers who swore they’d never drink a premium coffee beverage,” she said. 

Maximizing The Cooler 
The cold vault is an important area in travel plazas and the product mix inside the coolers is changing.

“In the past, as an example, you may have had three to four doors for soda and now you have two doors or one door based on need, and two to three doors of energy drinks and one complete door of tea,” Schulte said. 

As with coffee, knowing the customer will help operators determine what products to carry. “Truck drivers traditionally will drink a lot of Mountain Dew. That may not be the case for a passenger driver. If you have a particular ethnic community visiting your store, you may want something unique for them,” Schulte said.

Looking at customer counts and sales can help operators with product selection. “If you have a lot of customers and significant cooler space, having a broad product se- lection is probably helpful, but I think the reverse is when you have a smaller customer count and smaller available cooler space, you can’t give too many choices or you give the ability to trade down,” Schulte said, adding that the labor required to keep the best sellers stocked can be significant.

Russell is evaluating his cooler offerings and is preparing to make some changes to improve profits and customers’ shopping experience.

“Instead of branding doors, we’re going to integrate our doors, so Coke and Pepsi might be on the same shelf,” he said. “All the orange juice, no matter who makes it, will be in one door instead of being spread out.”

In the past, Russell has assigned four doors to Coke and three to Pepsi. “Whatever they carry is on there,” he explained, adding that he anticipates some pushback from beverage manufacturers. “I talked to some people that have made the change and they said at first the companies didn’t give them special pricing, so they raised the retail price to make the same margin. Once that company lost sales to another brand, they came back with a lower retail price.”

Schulte said operators often have to determine their own needs rather than letting the beverage vendor select the product mix. He suggests operators work with their vendors to find out what they’re seeing and what the local market is doing, then combine that data with their customer knowledge and sales data.

Energy drinks continue to increase in number, and manufacturers are adding more options and flavors. “Red Bull has added two flavors. Monster has added at least five new offerings and Five-Hour Energy has at least three,” Smith said. 

Howell said energy drinks are taking up more space in her coolers and some of the soda companies are resistant to giving up space. “It turns into a big negotiation, but everybody has to compromise a little bit,” she said. 

Howell has found that some companies are willing to pay for shelf space to get more exposure for their energy drinks. “It is usually the heavy hitters that will pay,” she said.

She is also seeing more fruit drinks from local manufacturers. “Some of those are starting to take off and I’d like to give them space,” she said, adding that she is trying to pull the slow sellers within her coolers to make more space. “You really have to be on top of your numbers to figure that one out.”

Russell is also looking at his sales to determine which products to carry and plans to cull some of the slower selling products, even within the growing energy segment. “The top energy drinks out there are Red Bull and Monster, but we’re carrying the other energy drinks and they’re really not where the big sales are,” he said.

Maximizing Cooler Space
In an effort to increase cooler space, Howell agreed to position reach-in coolers throughout her location, but she is fazing them out. “Before you know it you get all of these things on the floor and it starts to look junky and is just too much. I have eight doors and would love to have more, but that’s what I have and it can work,” she said.

Eco Travel Plaza has also added coconut waters, higher-end fruit juices and protein drinks, such as Muscle Milk and Core Power.

Smith said he’s found success by changing the actual cooler. “The best thing we did is go with LED lighting and black shelves when we upgraded our coolers. This really makes the drinks standout and they almost look wet,” he said.

Schapekahm said their soda coolers recently received a facelift, which included creative signage that spreads the message ‘cool down,’ and new lighting designed to grab customers as they enter the location.

Coffee Cup Fuel Stops has even taken their beverage offerings further and added a wide selection of wines. “It appears that our premium coffee drinkers also love wine. We’ve built a great business as a ‘last minute gift shop’ with our coffee and wine section,” Schapekahm said.

“We create gift baskets or wine and coffee bean pairings.”

Focusing On The Fountain
Fountain offerings have remained fairly consistent over the years, Schulte said. However, some operators are finding success with Coca-Cola’s Freestyle machine, which provides a wide variety of options and lets customers add flavorings to their drinks.

Schulte said some operators are opting to go with either Coke or Pepsi fountains instead of offering both. However, he said operators run the risk of losing sales when going this route.

“I think the smarter decision is to go with a major contract with one of them and carry Diet Coke and Coke if you go with Pepsi, or Pepsi, Mountain Dew and Diet Pepsi if you go with Coke,” he said. “If anything you want to drive business to your fountain because the fountain is your most profitable area of your store.”

Schulte said he is seeing expanded tea programs with a variety of flavored sweet teas. “In the old days they may have had an urn of iced tea, but now some have a tea fountain and there are four to six flavor choices. It is all bag in a box but gives an impression of fresh-brewed tea,” he said. 

Frank Paci, president of McAlister’s Deli, said iced tea, sweet tea and lemonade make up 70 percent of their beverage sales even though they also offer a variety of Coca-Cola products.

“We’ve added green tea to some of our restaurants looking to increase sales, and we’ve created specials,” Paci said.

McAlister’s Deli offered a peach tea with pure peach puree and a slice of peach on the glass and is experimenting with tea bars in some stores where customers can add flavorings, such as strawberry or peach, to their tea to suit their tastes. Paci has found customers also like to mix tea and lemonade.

“The guests love to personalize their drink. We have guests that will do one-third lemonade and two-thirds iced tea,” he said.

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This article originally ran in Stop Watch magazineStop Watch provides in-depth content to assist NATSO members in improving their travel plaza business operations.

The magazine is mailed to NATSO members bimonthly. If you are a member and not receiving Stop Watchsubmit a request to be added to the mailing list. Not a memberJoin today or submit a request to receive additional information.

Mindy Long's photo

Mindy Long

Before launching a full-time freelance career, Long edited NATSO's Stop Watch magazine. Prior to that Long worked as a staff reporter for Transport Topics, a weekly trade newspaper, covering freight transportation, fuel and environmental issues. In addition to covering the transportation sector, Long has written, reported and edited for a variety of media outlets. She was the Washington correspondent for WCAX-TV (CBS) in Burlington, Vt., a criminal court reporter in Chicago and a freelance copy editor for Kiplinger’s Personal Finance magazine in Washington D.C. Long hold a master’s degree from Northwestern University’s Medill School of Journalism in Evanston, Ill., and a bachelor’s degree in Communications from Westminster College in Salt Lake City.More
Source:
Stop Watch Magazine
Supplier Focus:
Coca-ColaMcAlister’s DeliS&D Coffee & Tea
Retailer Featured:
Coffee Cup Fuel StopsEco Travel PlazaRussell’s Truck and Travel Center 2Truck 'N Travel

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