Brewing up additional profits via coffee sales
Coffee profit centers can be a tasty way to attract new customers and more wash traffic.
For owners and operators obsessed with carwashing, additional profit center ideas often seem counterintuitive. Professional carwashers frequently spend years meticulously perfecting wash processes and policies to ensure exceptional results for every customer. If the employees are polite, the prices are attractive and the tunnel is functioning at an optimal level, why should they bother with other products? Yet, as many operators have learned, even the most perfect tunnels and wash bays sometimes sit empty.
There is no doubt that carwashes need to catch customer attention in today’s competitive market. What better way than by offering one of the world’s most popular drinks? Skip Fay, co-CEO of Dunn Bros. Coffee in Minnesota, said a business that adds a coffee profit center could conceivably make money off of coffee sales, and the wash could sell more carwashes due to the coffee as well.
This is especially true since a coffee profit center in a carwash is still unique enough to attract attention. In Minnesota, Fay said a carwash with coffee service would be a bit unusual, but welcoming. So much so that if a potential customer was deciding where to go for morning coffee, and if a wash was offering quality coffee, it would be a distinctive choice in the market. Thus, a customer may opt to get a carwash and coffee instead of opting for a coffee and no carwash.
Growing coffee trends
In a time when many segments of the U.S. economy have shrunk, retail coffee ventures have generally proven successful. In fact, a recent report put together by the Specialty Coffee Association of America showed growth in many coffee industry segments. The Sales Trend report for the fourth quarter of 2011 showed upward sales trends for drip coffee as well as espresso beverages in the retail setting. Also, national coffee chains reported that sales recovery within the specialty coffee industry has outpaced the rest of the foodservice industry. Overall, the coffee chains have seen a 4-6 percent growth rate in 2011.
Why has coffee proven so popular with today’s consumers? Fay stated that over the past 10 years retail coffee operations have become a place where customers go to sit and read or to meet friends. “It’s a response to some kind of a lack of community and wanting to be around people,” he explained. “A gathering spot that’s relatively inexpensive. You know, for a few bucks, you can meet your friends and be in a nice environment.”
The quality of the coffee is important as well. “I think the beverages themselves are more compelling because there’s more and more people that can make drinks that taste good to us,” Fay noted.
Getting the coffee
Two common service options for carwashes that want to sell coffee are food service suppliers and local coffee roasters. Fay said, “There are local roasters all over the U.S. in every town, small towns, big towns, and they can do a good job for the local carwash.”
Fay explained that his company is a roaster and retailer first and foremost. The company roasts coffee in the stores, and customers come in and purchase coffee beverages that run the gamut from frozen blended drinks to cappuccino. In addition, the company also has fresh roasted, packaged coffee.
Even though the company is primarily a roaster, they also have a food service and office line that they package. This coffee is sold through a coffee distributor and a food service company. Fay revealed that the food service company would go to a carwash or c-store and deliver the coffee product and the “sweet stuff” that the profit center would require.
Food service companies generally have a route employee that would service a carwash, and the company may also offer other drinks like sodas and juice. Here, having a dedicated service means a carwash owner can concentrate on washing cars while the beverage service can concentrate on helping the business sell additional products, Fay said.
Equipment and marketing
One area where suppliers can help a carwash owner with a coffee profit center is with the selection and purchase of the brewing equipment. Fay stated that local roasters will install great equipment so that the brewed coffee tastes good. The cost of the equipment would then be included in the cost of the coffee a carwash purchases.
The equipment chosen should be based on the volume that a carwash coffee center expects and the price point that an owner wants to hit, according to Fay. Instead of buying very cheap coffee and giving it away, the coffee supplier will have a quality product and better equipment to make the coffee an attractive purchase for visiting customers.
If an owner opts instead to purchase their own equipment, a simple coffee operation would cost several hundred dollars, Fay said. The advantage here would be the flexibility of owning the equipment outright. If a carwash owner decides to no longer work with a certain coffee supplier, he or she could change suppliers and their equipment would not be taken away.
Distributors also provide coffee marketing materials to carwashes because they are motivated for the business to sell more and more coffee. Fay said these materials can be cups, cup sleeves, counter displays and signs.
Since both the carwash and the distributor are paid on the product sold, it is no secret that both want the wash to sell dozens of cases a week, according to Fay. That is good for the carwash because it has generated profits on the cases of coffee. It is good for the distributor because the provided equipment will be paid off that much sooner.
What is needed?
Even though the equipment may be paid for in the cost of the coffee, the setup of a profit center will not be “no-cost” for an owner. Fay noted that the health department will probably have to be involved before opening, and a business will definitely need the right countertop space for the equipment. Also, good water is needed to make good coffee, so water filtration may be a consideration.
The need for additional employees to work the station will be based on the type of profit center an operator selects. Fay recommended consulting with the coffee supplier to find a system that best fits a carwash. If a carwash installs a “real-life coffee bar” that serves lattes, espressos and specialty drinks, it will need at least one dedicated employee. Training is also important with coffee bars because the employees have to know what they are doing. Otherwise, the product will be terrible, and today’s educated coffee drinkers will definitely notice.
The best carwash setup may be a simple brewed coffee station. “Tear open a bag, pour the coffee in the brewer, have it brew into an insulated pot so the coffee stays tasty,” Fay said. As long as a carwash maintains the equipment and has the proper water, the coffee will taste great.
Brew stations today also include machines that dispense milk as well as larger reservoirs that do not need to be attended to as often. With simpler brewing stations, an attendant can deal with the coffee every hour or so, brewing coffee every 45 minutes. Somebody can wipe up and keep the area clean. Then, the attendant could also be available to ring up carwash customers at the same time, depending on how busy a carwash is.