Chilled coffee and tea
A hot coffee isn’t the only way people are getting caffeinated on the go, with a range of chilled coffee drinks now also available. With summer on the way, it is likely that demand for a colder caffeinated drink will be on the rise, so retailers need to think about how they can build a strong chilled coffee offer.
“Part of the category’s popularity can be attributed to the fact it meets more than one consumer need – taste, hydration, an energy boost and satiety. It therefore naturally attracts a wider number of shoppers to the category as consumption is driven by different need states, at different times of day,” says Adam Hacking, head of beverages at Arla Foods.
Pricewatch: Chilled coffee price comparison
Amy Burgess, senior trade communications manager at Coca-Cola Europacific Partners (CCEP), says the ready-to-drink (RTD) coffee sector is worth more than £227m and has had a value growth of 37.5%
“We know RTD coffee is particularly appealing when the sun is shining as people look for a refreshing pick-me-up on the move or at home, and we expect this to be an even bigger opportunity this summer,” she says. “RTD coffee can provide a little energy boost to increasingly busy consumers.”
Positioning and promoting coffee to go
Retailers need to consider the customer journey when it comes to coffee to go. For those stores with a large food-to-go offer, creating a dedicated area featuring all their ‘on the go’ machines and products can make it something of a destination for customers. However, other retailers might want to pursue the impulse opportunities of coffee and position their machine in a high visibility and high-footfall area, such as by the door or at the till.
“Coffee quality is seen as the quality of the retailer and represents hospitality,” says Tjerry Sanders, group category leader at Selecta. “You want to show off your brand to the consumer. Therefore, you should position the coffee machine at the main points of sight or interaction for consumers. These are positions that receive the highest footfall – for example, entrances and exits.”
Starbucks launches RTD Multiserve format
Given that many customers will make purchasing a coffee to go something of a morning or lunchtime habit, having a quality product makes return visits far more likely, presenting the chance for further sales. Retailers can also use free samples to get the word out there, and offer loyalty cards to encourage people to return again and again.
“The most useful activity to consider when promoting coffee are linked deals. Linked deals should be the first thing retailers consider as they ensure the coffee offering is relevant throughout the day,” says Paul Dugdale, channel manager, coffee to go, at Lavazza.
“For example, at breakfast time, retailers can create a deal whereby customers can purchase a coffee with a breakfast item for a discounted price. Loyalty cards also incentivise repeat customers. “For example, at Lavazza, we offer loyalty cards specifically for coffee sales – helping to reward customer loyalty and drive repeat custom with a ‘buy eight, get one free’ mechanism.”
New chilled tea and coffee products
Starbucks has launched two of its products in multiserve formats. Starbucks Multiserve Caffè Latte and Starbucks Multiserve Caramel Macchiato are made from 100% Arabica coffee beans and are available in convenient, fully recyclable and ethically sourced 750ml packs.
Selecta’s SBUS Re-Imagine
A new full self-service coffee corner with fresh milk, vegan milk, syrups, ice coffees and original coffee has been launched by Selecta. Coffees can be ordered from a digital screen and branded with the customer’s own signature.
Absolute Drinks Tea Machines
Absolute Drinks has recently branched out into instant tea machines which serve Karak chai and Kashmiri pink tea with the Chaimaster range. These include the Chaimatic 4, Chaimatic 5 and Chaimatic bean to cup.
Positioning chilled coffee
However, regardless of the products they stock, retailers need to make sure they are prominently positioned in their fridges to provide a product people can buy and consume immediately.
With Costa Coffee RTD almost doubling in value in the past 12 months and Starbucks chilled coffee adding more than £26m in incremental sales in 2021, retailers should consider focusing on big brands with their chilled coffee range.
“We would recommend stocking cold coffees such as Barista in the chiller, alongside soft drinks and other flavoured milks. With its competitive price, Barista really stands out on shelf and we’d suggest merchandising alongside other brands to give choice to customers and help the cold coffee section stand out,” says Gabriella Sudall, marketing manager for NPD at FrieslandCampina UK.
Pret to introduce self-serve coffee machines into convenience stores
This summer, retailers might also want to consider moving beyond single-serve packs of chilled coffee and offering larger pack sizes as customers look for regular hydration and caffeination.
“With the appetite for the category thriving, there is an opportunity for RTD coffee to further evolve to reflect the wider variety of formats seen in the broader soft drinks category. For example, take-home, sharing and multipack formats,” says Arla Foods’ Adam Hacking.
Retailers shouldn’t just be looking for sales of coffee from their machines.
As people are increasingly back on the move, accompanying food options should be stocked next to the machine and promoted to attract incremental sales, particularly at breakfast and lunchtime.
Deals connecting sandwiches, cake or pastries with your coffee can generate more sales and extra profit. Offer options in the morning that will capture the breakfast-on-the move crowd, before moving to lunchtime deals later in the day.
“Stocking complementary categories alongside hot-beverages- to-go fixtures offers retailers the chance to increase spend by encouraging impulse purchases. Popular categories that work well together with hot drinks include morning goods and bakery items, both of which are in growth,” says St Pierre’s commercial director, Chris McLaughlin. “Food to go – and therefore the hot drinks fixture – has become a key part of leisure activities over the past 18 months. Journeys of all kinds are accompanied with a trip to the hot drinks fixture – not just the morning commute.”
Costa to trial hot and cold Express machines in convenience
The opportunity to generate incremental sales need not only apply to hot coffee to go. Particularly in the summer, people look for products to accompany their chilled coffee as part of breakfast, lunch or a pick-me-up snack.
“We see Barista sell well when placed near other food-to-go products, such as chilled sandwiches, as it’s the ideal after-lunch pick-me-up. We’ve also seen it perform strongly when placed in retailer meal deals,” says FrieslandCampina’s Gabriella Sudall.
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