Carrot Cake or Marshmallow?

Tracking the flavor preferences and seasonal sways of the hot-beverage buyer

LAKE ZURICH, IL. -- A hot-beverage program is a crucial anchor to any c-store retailers’ foodservice program. It’s often the category that gets the first makeover when a chain decides to dive into prepared foods in a more dedicated way.

Creating a solid hot-beverage offering means balancing regular and limited-time offers in a way that keeps things fresh for daily customers with innovative flavors, tempered by the realities of just how much product you can move.

Insight Beverages, which works with retailers to develop custom beverage concepts, tracks hot-beverage flavor trends by watching consumer and restaurant menu data, following social media and even scouring the food-magazine sections at local bookstores. It also watches what Andrew Dun, vice president of marketing, calls “analogous categories,” such as ice cream and confectionary, that see similar purchase characteristics from consumers.

One example of a cross-category flavor trend Dun is tracking is the humble marshmallow, recently taken to new levels through artisanal varieties and unique flavors beyond the customary vanilla.

“You can’t go very far before you run into a marshmallow somewhere,” he told Convenience Store Products, which is why his company developed a s’mores-flavored cocoa. Salted caramel is another flavor gaining ubiquity across sweet-food categories, as well as anything denoting comfort, such as hazelnut, and seasonality, such as the popular wintertime onslaught of peppermint mocha items.   

When balancing limited-time offers (LTOs) with core offerings, Dun advises retailers to not lump the cappuccino/cocoa customer in with the coffee customer. “They are a different person; they have different motivations,” he said. “[Cappuccino/cocoa customers] are much more loyal to the c-store industry than any other shopper because this is the dominant channel to get cappuccino and cocoa. Playing off that variety-seeking, that’s why LTOs are important.”

While he points out that no two retailers are alike, Dun says most provide three to five LTOs per year—three in the peak months and two in the off-season.

But retailers must be conscious of their volumes lest they end up with a backroom full of unfinished LTOs. “There is such a thing as too much of a good thing. We’ve had customers who have said ‘These LTOs are great. I want to do one a month.’ And the c-store supply chain isn’t that robust to manage that appropriately,” says Dun.

Retailers also face new dynamics once the weather warms up. During the spring and summer months, consider pulling back on LTOs.

“You always have to have them available. It’s the level of activity and how you manage the supply chain to make sure it stays efficient that remains critical,” said Dun, who has experienced an increase in conversations with retailers interested in expanding their frozen-cocoa and cappuccino lines. 

And how do consumers’ flavor preferences shift once the weather starts warming? Are we still reaching for the salted caramel cappuccinos?

While the cocoa/cappuccino customer buys hot beverages year-round, they do have difference flavor demands. “Try to look at flavors that have a lighter perception to them,” advises Dun, such as carrot cake, chai tea, bananas Foster and chocolate almond biscotti.