Michael Eskew’s job requires him to travel around the Southeastern U.S. An ardent coffee lover and self-confessed “caffeine freak,” Eskew enjoys several cups every day.

On occasions when Eskew craved a special cup of java, he’d visit an upscale coffee shop where he loved the menu items but loathed the prices. Earlier this year, several c-stores along his travel route began offering cups of coffee that rival those produced in boutique coffee shops.

“A couple of c-stores have fancy, new equipment that lets me make coffee myself—the same drinks I used to buy at a coffee house,” he said. “They’re premium drinks, taste great, and the price is right.”

New Brew

The beverage market is constantly changing—in the cooler and at the coffee bar. The proliferation of upscale coffee shops has compelled coffee retailers of all types to up their game. Thankfully, the advanced technology available in today’s coffee equipment makes superior beverages possible, including effervescent nitro coffee.

If you have a good hot coffee product, you have permission to offer a ready-to-drink coffee product.

“Today’s nitro coffee equipment uses compressed air,” said Bob Pierce, senior vice president, North America for Bunn, the equipment manufacturer. “Bunn has developed an air filtration process that takes surrounding air, cleans it by removing particulates and moisture and adds it to the drink at the point of dispense. This results in a creamier drink with a rich head and cascading micro bubbles within the beverage.”

“There is a bit of a capital investment involved, but from an operational standpoint, it’s easy to execute once you make that investment,” said Mark DiDomenico, director of customer solutions for Datassential. “And from the consumers’ perspective, [nitro coffee] is a better tasting product. It has a pleasant mouth feel. It’s higher in caffeine, but it’s lower in acidity, so it’s better for your stomach. Think about the specialty coffee beverages that came before. You needed a barista on staff to create those. This one requires no added labor or time. It’s kind of a magic product.”

Today’s tech-savvy equipment also can create a more pleasant cup of cold brew, which most coffee aficionados prefer to traditional iced coffee, Pierce said.

When is the best time to upgrade existing coffee equipment, perhaps replacing it with improved technology? “When your service costs begin to exceed the cost of a new piece of equipment that can appreciate over time, it’s time to change,” Pierce said. “And be sure only certified maintenance technicians work on your equipment, or you could unintentionally void the manufacturer’s warranty.”

Flavors and Sweeteners

Flavored coffee has been around “since the ’70s and ’80s,” said Spencer Turer, vice president of Coffee Enterprises, a provider of consulting and technical services to the coffee and tea industry. “I remember when almond coffee was slivered almonds mixed with whole bean coffee, and cinnamon coffee was powdered cinnamon on top of the whole bean.”

Today the coffee industry relies on natural and artificial ingredients to flavor coffee beans before they’re brewed. Or, customers can enhance their own beverages with a wide range of flavor shots or syrups.

“I look at coffee through a culinary lens,” Turer said. “We combine foods and flavors that complement each other and say, ‘this is new and unique because maybe you haven’t seen it before.’ Any time you put a flavor into coffee, it’s guaranteed it has been done before, but maybe not with same quality or with the same marketing and merchandising.”

Consumers like sweet products. But at the same time, they’re demanding drinks with less sugar, less sweetener and less artificial sweetener, according to Glenn Hodess, manager of national sales/export development for Zavida Coffee, a global coffee roaster and flavor house based in Toronto.

Zavida produces a flavor shot program featuring 34 flavors with natural or organic sweeteners for hot and cold beverages. The shots come in small bottles that fit on racks that are either six inches or eight inches wide to save space on the coffee bar.

“People say this is a fad, but consumers old and young are into new trends and taste profiles,” said Hodess. “And it’s going to get bigger. Everything’s flavored, from carbonated water right up to Red Bull. And everyone wants their own taste profile. Consumers are bored with regular products, and they want to enhance them with flavors.”

Flavored coffee is one way of recruiting new coffee drinkers, said Turer. “Today we know flavored coffee is a market segment unto itself. The quality of the flavor, the trueness of the taste and the aroma attributes have to be there for the consumer to say, ‘this tastes really good, and I want to keep drinking it.’ And that’s the ultimate goal. To get the customer to enjoy it and come back and purchase it a second, third and fourth time,” he said.

Ready to Drink

Ready-to-drink coffees are gaining a following. According to Nielsen’s September 2019 Insights on the U.S. grocery market, 158 new RTD coffees had rolled out in the past year, and more than half of those were cold brew.

In February, Starbucks and PepsiCo launched Starbucks Nitro Cold Brew, an RTD developed by the North American Coffee Partnership (NACP), an organization the two companies founded in 1994. While RTD nitro cold brew isn’t a new product, Starbucks is one of the few companies to bring it to scale.

From the consumers’ perspective, [nitro coffee] is a better tasting product.

“If you have a good hot coffee product, you have permission to offer an RTD coffee product,” said Turer. “The quality and brand image can validate everything else you’re selling.”

RTD coffee innovation also includes a few alcohol offerings. Last year, Pabst Blue Ribbon introduced a hard coffee with “no beer taste” that’s made from a malt beverage, sugar, milk and vanilla. In January, Jägermeister launched a cold brew RTD that blends Arabica coffee and cacao with the flavor of Jägermeister, the German digestif made with 56 herbs and spices. More liqueur than coffee, each shot provides about 10% of the caffeine found in an average cup of joe. Other manufacturers say more alcohol-plus-java products are in the pipeline.

Sign Me Up

Every retailer wants to move more coffee and increase store traffic. Fast-casual Panera Bread in February announced that for $8.99 monthly, loyalty members can participate in a coffee subscription plan that provides them with unlimited hot or iced coffee—or tea—in any size cup at any Panera location.

Before rolling out the offer, Panera tested the program at 150 stores in four markets during a three-month period. The response was a 200% jump in frequency of visits and a 70% increase in customers ordering food with coffee. Plus, the trial generated a 90% to 95% renewal rate for subscription members.

“This is marketing genius,” said Turer. “Everyone is talking about this, and it’s all over social media. But we’ve been doing things like this in the coffee industry for generations. It’s just an extension of the old travel mug program. The first four fills you pay for, and the fifth fill is free. How is this different from a company selling you a gift card? They get the money up front, and the gift card may or may not be redeemed.”

Despite Panera’s initial success, a coffee subscription service is not a guaranteed win. Last year, Burger King tried a similar service that cost patrons $5 a month and provided one small, hot coffee per day. But the chain dropped the service a few months after it launched.

Coffee drinkers love their coffee. No matter what is on the coffee bar, they want to know that their preferred retailer takes their coffee as seriously as they do.

“When you’re at home, you’d never cook soup in a dirty pot,” said Turer. “When you’re at a store, you want to make sure they’re making your coffee in a clean pot. You want to be sure they measure out everything correctly. The equipment must be clean and well-maintained, and the store must be in stock in everything and ready to go. Coffee must be done in the right way. It’s not a beverage of chance.”